·
Pre-Workshop Press Release
p.
2
·
Workshop Purpose
p.
2
·
Workshop Programme
p.
2
·
The MIA Project within the Global, Regional and
National Development Context
p.
3
·
Opening Address
pp. 3-4
·
Draft Document Overview
p.
4
·
Concept approved by the Central Task Team
p. 5
·
Management Structure
p.
5
·
Commissions:
p.
6
·
Findings and Resolutions
p.
6
·
Summary
p.
6
·
Commission A – Privatisation
pp. 7-9
·
Commission B – Protocol and Legislation
pp. 9-10
·
Commission C – Customs and Free Trade Zone
p.
10
·
Commission D – Commodities
pp. 10-11
·
Commission E – Agriculture pp. 11-13
·
Commission F – Airport Development & Financial Planning
p 13
·
Evaluation
p.
14
·
Closing Address
pp. 14-15
·
Annexure A-D
HOSTS:
The
Ministry of Public Works & Transport
The Ministry of Industry, Trade & Marketing
Tuesday 11th July saw a press notice issued stating the need,
identified earlier by the two Ministries, for the establishment of a Task Team
to investigate the development, upgrade and re-vitalization of the Moshoeshoe 1
International Airport. Using a
holistic coordinated approach along with other related projects; this involves
airport economic viability enhancement together with the impact that related
projects will have on improvement of Lesotho’s socio-economic position.
A
full copy of the Press Release is attached to this Report.
Starting
Wednesday morning, all present were welcomed by the Chairperson, Ms M Nchapi.
Then followed introduction of Mrs Cornel Hart (Facilitator), Messrs Bryan
de Robeck and Louis Lausberg (Co-Facilitators) and Ms Miranda Stuurman
(Administrator) – all from Maxim Development Consultants;
Mrs Libuseng Malephane (Coordinator) was present from the Department of
Civil Aviation.
Participants
invited to the Workshop then heard a paper from Mr T Tlelima of The Central Bank
of Lesotho (CBL) Research Department - followed by the opening address from The
Honourable Minister of Industry Trade & Marketing Mr Mpho Malie; then came
an overview of the concept draft document from Mr Lausberg. In the afternoon
Participants joined in one of six Commissions considering the different subject
areas of the proposed re-vitalization programme. Day 2 saw Participants
reconvening for an interim findings plenary report back before returning to
their individual Commissions;
Day 3
produced final resolutions, followed by a closing appreciation and an address by
The Honourable Minister of Public Works & Transport, Mr Mofelehetsi Moerane.
The
MIA Project within the Global, Regional & National Development Context
Mr
Tlelima set out the underlying financial framework of Lesotho’s economy within
which the airport re-vitalization programme will need to operate.
Mr Tlelima stressed that world economies are increasingly part of a
global village – and Lesotho is also a member of this global village. He went
on to identify Lesotho’s position in the village and the benefits which should
be achieved by participation, as well as the threats which need consideration
– particularly for small countries such as Lesotho. Then followed an
appreciation of recent economic performance, indicating a growth pattern which,
whilst showing some recovery, followed a 1998 significant downturn after closure
of Phase 1A of the Lesotho Highlands Water Project (LHWP); contraction of South
African mining activities has also had an adverse effect on employment and
foreign exchange earnings. Sector bias trends both indicate a need to build up
primary sector production (agriculture, mining and quarrying) – and provide a
challenge to extend financial intermediation to low income earners.
A copy of Mr Tlelima’s paper is attached.
Opening
Address
Minister
Malie spelt out clearly the objectives and framework for the Workshop, the
origins of the Task Team, the strategic importance of the Airport – and the
mandate required from the Workshop. Minister Malie tasked the Workshop delegates
with:
·
investigating the
draft concept document with resolutions in order for it to be adopted by Cabinet
·
setting a Task
Team policy framework and way forward through which to optimise limited
resources.
Minister
Malie spoke of the need for a Task Team to activate, coordinate, focus and
accelerate development processes for a better life for Lesotho’s people; MIA
conformity with international standards and re-vitalization are essential to
such progress.
Minister
Malie emphasised that Lesotho is a small player in the global context; he
stressed that the Task Team’s mission is to develop coordinated projects on a
holistic basis for Lesotho to enter the global environment effectively on a
stable platform. In developing streamlined, effective methods and systems the
Task Team, with Government, will:
1.
demonstrate long
term commitment – focusing on job creation, joint participation ventures and
technological advancement;
2.
provide recent
technology training and capacity building – to empower Lesotho’s people as
proud role-players in the global village;
3.
develop the
tourism industry – to attract valuable resources and international interest in
Lesotho;
4.
establish a Free
Trade Zone – to attract investment and technology through project enhancement
and promote common purpose;
5.
utilise and
develop privatisation of non-strategic assets for both funds raising and profit
growth;
6.
develop and
exercise protocol, both locally and internationally;
7.
meet the
legislation challenges which will be encountered;
8.
expand the scope
of beneficiating raw materials and semi-finished products;
9.
launch
agricultural initiatives – including development of remote and currently
unproductive land, turn aqua-culture into a significant contributor and enhance
the National Herd;
10. maximise
MIA’s national strategic gateway role – through dramatic growth in cargo
carrying and passenger traffic;
11. develop
and implement innovative financial strategies.
Minister
Malie concluded with the need for the Workshop to mandate a clear way forward
and for the Task Team to be armed with all necessary authority to pursue
objectives with vigour.
The
Honourable Minister complimented the Task Team on their hard work and
considerable progress to date – and wished all present at the Workshop a
successful outcome to their deliberations; he expressed the hope that the
proposed concept would provide much needed answers for Lesotho and its people.
A
full copy of the Honourable Minister’s speech is attached.
Draft
Document Overview
Mr
Lausberg set out the framework within which the Task Team has operated – and
the fundamental factors, identified by the Ministers, upon which the Team’s
initial work has been based:
·
MIA is a
strategic project of national importance;
·
MIA is under-utilised
due to low production of high value goods warranting air transport, as well as
low volumes of tourist and other passenger traffic;
·
export patterns
are seasonal;
·
the production
base for processed products is small;
·
an action plan is
needed to provide high value airfreight cargo and MIA profitability.
The
Minister established the Task Team to “kick-start” the process.
Concepts
approved by the Task Team are:
·
the Lesotho
economy depends on a prudent strategy ensuring sustainable growth;
·
strategic
direction must meet the needs of Lesotho’s citizens;
·
people skills and
capacities must equate with continuous advancement and
empowerment;
·
development must
be realistic, achievable and match available resources;
·
strategy must be
implemented through clearly defined plans driven by dedicated people;
·
MIA development
must be approached holistically with inter-dependent development areas such as
agriculture, industry and tourism;
·
clearly defined
projects need practical viability studies to achieve success.
The
Task Team requested Maxim Development Consultants to provide the concept plan
presented at the Workshop. This plan is based on:
·
firm directional
guidelines for economic development within the global village;
·
constructive
political, legislative and economic policy development interacting within the
framework of capacity building and people empowerment;
·
Well-defined
budgets and time frames providing for organised, integrated implementation
within approved strategy.
Management
Structure
The
concept model is structured around a policy and budget coordinating Central Task
Team (CTT) operating through eight Focus Groups, each dealing a specific action
area (see below). Staffing policy will involve a minimal permanent secretariat
backed by local and expatriate staff on secondment from Government and the
private sector, together with specialist consultants.
The
Commissions
Following
the opening addresses Participants joined, by choice, one of six Commissions to
examine the draft concept report; by discussion they were asked to reach
consensus on whether to adopt the draft model and, if so, what amendments (if
any) should be made to it before submission to Cabinet. Based on the proposed
management structure (see above) the six Workshop Commissions and the CTT
related eight Focus Groups which they encompassed were:
A.
Privatisation
FG 2: Privatisation
B.
Protocol & Legislation
FG 3: Protocol
E.
Agriculture
FG
6: Agriculture
F.
Airport
Development & Financial Planning
FG 7: Airport Development
FG 8: Financial Planning
Having debated the draft plan’s proposed targets, responsibilities and
action areas of the eight Focus Groups – and with an interim plenary report
back on Day 2 - the six Commissions provided a range of findings and resolutions
for consideration in finalising the Concept Plan document for submission to the
Cabinet; a CTT meeting at Workshop end proposed a 15 August date for Cabinet
response:
The Commissions endorsed the draft plan concepts for the MIA development
and the pursuit of the interrelated projects, with the amendments set out below
under each Commission. In summary, these amending resolutions are for the CTT,
backed by Government, to:
·
develop user friendly infrastructures and enabling
legislation;
·
establish a Free Trade & Export Processing Zone (FT
& EP Zone) attractive to investors;
·
reduce and, where possible, eliminate bureaucracy;
·
create public awareness and participation;
·
build up people skills and capabilities;
·
broaden information interchange and knowledge horizons;
·
coordinate the efforts of all sectors;
·
utilise existing assets to full potential and develop
new assets;
·
develop international involvement;
·
conduct feasibility studies in line with business and
implementation plans.
Commission A:
Privatisation
This Commission sees a new partnership developing through the growth,
development and revitalisation of MIA
through the establishment of the CTT and its FGs:
·
Government
– as the facilitative partner, through the CTT as its operational
mechanism;
·
Private Sector
– as the entrepreneurial partner; and
·
Labour
– as the productive resource partner.
The Government backed CTT role will be:
a)
provision of an environment conducive to private sector
development, which in turn will
create political stability;
b)
ensuring the security of assets and investments;
c)
providing a basic infrastructure for the proposed
projects – including:
i)
good and accessible roads;
ii)
a telecommunications network;
iii)
an airport terminal;
iv)
a railway network.
d)
developing laws and regulations to provide:
i)
an efficient legal system
ii)
capable of smooth dispute settlement – and
iii)
efficient (and effective) employer/employee labour
relations.
e)
creation of an attractive investment climate with:
i)
concessions packets;
ii)
land tenure for project owners;
iii)
land reform where required and available;
iv)
licenses for investors and foreign participants;
v)
work and residence permits for investors.
The present legal framework for privatisation is controlled by the
Privatisation Act of 1995 and the Privatisation Regulations of 1997. The Act and
Regulations are bureaucratic, with a requirement to continuously refer to
Cabinet at each stage of a privatisation process of an entity.
Commission A recommends:
1.
Review of the Act and Regulations with the aim of:
a)
empowering CTT to make operational and technical
decisions without frequent referrals to highest
b)
authority – and a clear mandate to reduce the number
of referrals;
c)
introducing a Cabinet Sub-Committee to deal efficiently
with privatisation issues as presented by the CTT, instead of involving the full
Cabinet each time a matter needs to be discussed.
2.
Government to facilitate the establishment of venture
capital through the CTT via:
-
merchant banks
-
mechanisms to allow the CBL to influence commercial
banks to focus on new lending policies which are customer friendly
-
sourcing of funds through World Bank grants, IMF
grants, USAID, the British Development Fund, European Union and similar
organisations
-
sourcing of special concessionary loans which would be
disbursed and managed by commercial banks.
3.
A private sector role to:
a)
develop small, micro and medium size enterprises (SMMEs)
and facilitate their
funding through the CTT and the banks;
b)
revitalise current SMMEs so that they can act as
support institutions in development and financing – eg. BEDCO/BAPS;
c)
mandate the CTT to negotiate with the CBL to review its policy towards
performance of local banks, especially in their role as lending institutions;
d)
support CTT encouragement of local banks to act as investment and capital
injection vehicles in development projects so that they will review the
following issues:
- project appraisals – transparency based on clearly
set criteria given to clients;
-
lending rates in line with competitors and neighbouring country (e.g. SA) banks;
- closing the gap between deposits/savings and lending
rates which currently make
banking with them
unattractive;
- provision of standards and services
through an improved range of products on
offer – eg. Visa Cards,
American Express Cards and smart cards;
- access for local citizens into FT & EP Zones as investors and
providers of
services.
1.
Addressing lack of expertise through the CTT by:
a)
provision of entrepreneurial training and development;
b)
provision of capacity building skills transfer to
ensure local citizen understanding and participation in the privatisation
process;
c)
encouraging joint ventures, partnerships, share
purchases and similar processes;
d)
Government to Government initiatives and exchange
programmes – eg. Attachments and assignments of personnel for exposure;
e)
incentives to industry and the private sector for staff
training – eg. a rebates system (Lesotho
Education & Development Fund via Manpower Development);
f)
encouraging people to learn more from expatriates –
eg. Counterpart Programme – to be documented and monitored.
2.
Public awareness creation through the CTT:
a)
creating and publishing a list of companies earmarked
for privatisation;
b)
introducing a public awareness scheme on:
i)
how to buy shares; and
ii)
how to access the CTT and the projects developed by the
CTT and the FGs;
c)
advertising and promoting the privatisation process.
3.
Anti-foreigner bias elimination through a CTT programme to:
a)
encourage a positive attitude change, thereby creating
an investor friendly atmosphere;
b)
develop a positive work ethic and culture – eg.
through issue of work and residence permits, trading licenses, passport and
immigration control;
c)
introduce a “one stop shop” within the CTT to deal
with the problems of bureaucracy;
d)
monitor bureaucracy and develop a benchmark for
measurement of Lesotho’s performance against that of other countries;
4.
removal of co-operation unwillingness (individualism)
through the CTT:
a)
building trust – through development of cooperation
agreements with Government and the Ministries;
b)
having a business-minded approach, together with its
FGs;
c)
developing proper legal procedures and documentation in
all aspects of projects;
d)
having accountable and transparent management, backed
by the systems to ensure this;
e)
consolidating individual and company resources – eg.
transporters, farmers.
Recognising the importance of international market linkages,
Commission
B recommended:
1)
examination of existing protocols for negative impact
on the MIA development;
2)
heavy involvement of diplomacy in interaction with
development partners, as Lesotho is a “least developed” country;
3)
adoption of the Workshop draft document for Focus Group
3 – Protocol, as amended;
4)
a review of laws as determined by the other Commissions
– taking in the Workshop draft document for Focus Group 4 – Legislation;
5)
the mandates of Focus Groups 3 & 4 should be
undertaken by permanent staff;
6)
an increase in retraining programmes should be
solicited with Anglo-American and Goldfields, with focus on animal husbandry,
agricultural products processes and practical business management.
The Commission acknowledged a possible need for legislation changes
depending on the resolutions of other Commissions.
With the caveat that Export Processing Zones could be more appropriate in
both name and application, this Commission recommended, through CTT
mandate:
1)
Government commitment through proactive policies (eg.
commitment of funds);
2)
Government creation of political and economic stability
through dialogue – and without impositions;
3)
establishment of a clear legislative framework no legal
conflicts;
4)
creation of a reliable infrastructure, including good
transportation and communications (eg. email, Internet for eCommerce);
5)
markets access through aggressive promotional efforts
– eg. through attaches (and lobbyists) who can promote the country and what it
has to offer, investment promotion missions, breakfast meetings;
6)
development of ability to attract sustainable investors
through partnerships and joint ventures with Basotho;
7)
provision of good support services – eg. banking,
insurance, freight forwarding, sub-contracting (Basotho);
8)
amicable treatment of investors encompassing
transparency and fair dealing;
9)
promotion of a good physical environment which is
pollution and toxicity free;
10)
preparedness to spend money to make money for the
country – Basotho initiated;
11)
research visits to other countries with successful
Export Processing Zones.
Participants were recommended to look into the WEPZA website for useful
information on the Export Processing and Free Trade Zones of other countries.
With
note taken of comments by Participants in the (Wednesday) interim plenary report
back meeting – and with addition of the following items to the suggested list
of commodities suitable for air freight cargo transport, the recommendations
of this Commission are:
1.
additions to the list of commodities proposed in the draft plan for Focus
Group 5:
·
fruits: wild berries, prickly pear, wild rose;
·
industrial products: mohair, wool, dolls, wood, pottery, gallery items,
grass products, leather, clothing and textiles;
2.
construction of a cold storage facility at M1A for horticultural crops
and cut flowers awaiting transit – to prevent quality deterioration (liaison
with FG 6: Agriculture);
3.
Department of Standards location in or near the FT & EP Zone – for
point of entry/exit grading – together with appropriate standards legislation
(liaison with FG 1: FT Zone & FG 4: Customs & Legislation);
4.
reopening of the cannery – for processing fruits and vegetables –
together with investor attraction, especially from South Africa, through
organisation of a facilitating mission (liaison with FG 2: Privatisation);
5.
organic farming development into niche markets, backed by protective
legislation (liaison with FG 3: Protocol & FG 4: Legislation &
Customs);
6.
production and marketing of dagga (medicinal) under strict control (liaison
with FG 4: Legislation & Customs & FG 6: Agriculture);
7.
wool and mohair processing – located near the FT & EP Zone – for
cosmetics oil extraction (liaison with FG 1: FT Zone); an existing mohair
processing plant, now used for wholesale operations, could be converted back to
its original use;
8.
processing and packaging operations for all products, including fruits,
disaster & poverty relief packets, honey (liaison with FG 1: FT Zone);
9.
enhance and expand honey production by assisting existing producers and
attracting new farmers through raised production levels (liaison with FG 6:
Agriculture);
10.
installation
of an effective – and essential - communications network linking consumers and
producers to facilitate marketing; cellular phones and radio transmitters can be
used to extend the network into rural areas (liaison with FG 2: Privatisation,
FG 3: Protocol & FG 6: Agriculture);
11.
extension
of the roads infrastructure, especially into rural areas and to open up roadless
areas where potentially useable land exists (liaison with the Ministry of
Public Works & Transport);
12.
establishment
of an international show ground – in or near the FT & EP Zone for easy
bulk goods and visitor access and international trade involvement (liaison with
FG 1: FT Zone & FG 4: Customs & Legislation).
The following resolutions are proposed:
1.
introduce a FT & EP Zone, with inclusion of tax concessions on
production inputs;
2.
international marketing through Lesotho Diplomatic Missions abroad;
3.
introduce a Portfolio of Lesotho publication, “beefed up” for
international marketing – in conjunction with the Ministry of Trade, Industry
& Marketing and other stakeholders;
4.
completion of a business plan through a follow-up programme of meetings
and workshops involving the chairpersons of the Commissions (and the FGs) under
Commission F: Financial Planning (see Workshop document page 9);
5.
mandate stakeholders to form public companies to manage the various
enterprises in the MIA Programme – and to position themselves to take the lead
in the purchase of privatised state assets;
6.
the PU to give priority to public companies in the sale of
privatised state assets – with encouragement to private companies,
close corporations and individuals to hold shares in public companies;
7.
commodities beneficiation by stakeholders at all stages;
8.
establishment of operational units for each FG to facilitate further
development of business plans, feasibility studies and implementation programmes;
9.
group together all infrastructures in public, corporate and private hands
as national assets for use in implementing the MIA Programme, backed by an
inventory of such assets;
10.
establish
– through FG 8: Financial Planning – a loan/revolving credit fund to support
operational inputs of enterprises in the MIA Programme;
11.
under
central control and co-ordination of funds and budgets, with full disclosure
input into a central database,
12.
empower
all FGs to negotiate internationally, nationally and locally for funds, joint
ventures and partnerships;
13.
establish
a principle of all stakeholders and role-players engaging efficient and
competent managers in all enterprises and processes;
14.
extend
the LNDC and BEDCO enabling legislation to all public companies, with amendments
where necessary;
15.
Department
of Civil Aviation to be assisted in running a pilot air freight cargo system,
starting with existing systems and facilities.
The
Commission appointed the following to start work on public companies:
·
broilers
- Mr Matlosa
·
layers
- Mrs Mpai/Mokouane
·
agricultural mechanisation
- to be nominate
·
horticulture – including bees
- Mr Khechane
·
aquatic birds
- Mr Damane
·
red meat
- Mr Mafoso
·
piggery
- Mr Segoete
·
rabbits
- Mrs Ramonaheng
·
dairy
- Mr Letsie
·
customs
- Miss Rantselli
·
marketing
- Miss Liphaphang
·
food processing
- Mr Mota
A
Commission request for availability of a list of Workshop Participants, for
networking purposes, was agreed.
This
Commission’s resolutions are:
·
adoption of page # 1 of the Financial Planning section of the Workshop
document (Introduction & Objectives);
·
amendment of the funding procurement structure by:
a)
insertion of CABINET between PARLIAMENT and MINISTRIES & DEPARTMENTS;
b)
replacement of CENTRAL TASK TEAM by PROJECT MANAGEMENT TEAM;
c)
insertion of FGs 1 – 8 under PROJECT MANAGEMENT TEAM.
·
identification of funding sources as:
a)
internal: local banks, Government, credit unions;
b)
external: World Bank, ADB, EU, BADEA and similar
organisations.
·
redesignation of the CTT as the Project Management Team
(PMT);
·
PMT to draw up its own tendering procedures and
guidelines;
·
Government sourced funding to be administered through
normal Government procedures;
·
externally sourced funding to be administered through
PMT’s own financial control mechanisms;
·
development of budgets to be adopted as set out in the
Workshop document;
·
FG 8, consulting with other relevant FGs, to recommend
to PMT appointment of consultants and specialists;
·
payment approvals systems, budgets and variance reports
mechanisms, to be as for Government and externally sourced funding;
·
a feasibility study as a prerequisite for the physical
development of the project;
·
proper financial control mechanisms in place –
towards assisting in funding negotiations;
·
integrated time frames for all projects;
·
commitment from ALL role-players direly necessary for a
successful Programme;
·
time frame requirement for Programme implementation.
This Commission is talking about money; accountability and transparency
are the key issues in creating a trust environment for investors.
1.
Participants requested the Chairperson to give the
Minister a Workshop synopsis before close, in accordance with normal practice.
2.
Government delegates and representatives sitting in
Focus Groups are requested to show commitment and continuity of presence, as
well as encouraging progress. When delegates do not attend regularly and/or
where individuals change, time is lost in updating such people and integrating
them fully in the process.
3.
On the Workshop administration and organisation:
a)
some +/- 30 delegates were seen to be absent –
invitations should be sent out earlier, with extensive follow up on responses;
b) Commissions’ report backs were well and confidently presented