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PhD Work-in-Progress Report Presented at

“The 8th ‘New Frontiers’ in African Economic History Workshop: Inequality and economic development in Africa in historical perspectives”, Lund University, Sweden, 6th -7th

December 2013

Thesis Working Title

Basotho Business Owners’ Opportunities and Constraints in Lesotho’s Economy: The Case Study of the Lesotho Chamber of

Commerce and Industry, 1976-Present

By

Sean Maliehe1

PhD Student Human Economy Programme

University of Pretoria, Department of Historical and Heritage Studies,

South Africa [email protected]

Supervisor by

Professor Alois Mlambo

University of Pretoria Department of Historical and Heritage Studies

University of Pretoria South Africa

1 Sean Maliehe is an Economic Historian and Ethnographer of Commerce in Lesotho.

mailto:[email protected]


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Abstract

The majority of Basotho business owners have historical occupied a marginal position in Lesotho’s economy throughout the colonial period into the post-colonial period. They have faced various internal and external problems in the local economy, and many, have failed. Due to this, partial observers, government, and their advisors have popularly described Basotho as a society with no entrepreneurial spirit and business culture. The assertion is particularly made in comparison with European and Asian foreign investors who have, historically, demonstrated better performance through a number of opportunities and protection from the government. Despite this, Basotho business owners have persisted in business, albeit, in businesses defined as micro, small and medium enterprises. A few have exceeded such levels. Using historical and anthropological research methods, and the case study of Lesotho Chamber of Commerce, this study has been an attempt to explore ways in which Basotho business owners have attempted to better their conditions and fortunes in the country’s economy, individually and collectively, in the post-colonial period. The argument of this study is that, the narrative of what Basotho business owners have been doing for themselves has been hidden at the detriment of fully understanding their potential and socio-economic and political formations that have led to their persistence. Results of the study show that Basotho business owners have persisted through ‘improvisation’, ‘economisation’ and ‘adaptation’, against difficult odds. Some Basotho business owners have been able to get certain benefits that came with the role of government and various international institutions and organisations in attempts to develop the country’s entrepreneurship and business environment. However, benefits that they got have only been ‘incidental’ and ‘episodal’ – short term, instead of being long-term in a manner that would change the economic conditions for the majority of the business owners so that they could fully benefit, and have a meaningful participation and say. Rather, only a few elitist business owners benefit. They have created exclusive elitist business circles, which have close relations with top government officials. These elitist circles consist of business tycoons, fellow politicians, party members, friends and family members, who covert public funds into private pockets under the veil of private-public partnership, particularly, more profoundly, after the country adopted neo-liberal policies in the post-1990s.

Introduction

Since independence in 1966, Lesotho has faced challenges of economic development, poverty, unemployment and income distribution.2 For a very long time into the post-colonial period, Basotho depended on wage labour in South African mines for house-holds income and also, to a large extent, on subsistence agriculture.3 Foreign aid has also been one of the pillars of the country’s economy in the post-colonial period,4 as “[c]ombined, aid monies exceeded locally raised revenue” 5 in the 1970s and 1980s. Despite this, indigenously-owned business has also been playing an important role for the ordinary people of Lesotho. However, little is known about how Basotho business owners have attempted to play an increasing role in the country’s economy, individually and collectively. This is because literature on Basotho’s entrepreneurial initiatives and local business activities is still in its infancy.

2 Lesotho National Strategic Development Plan, 2012-2017; Lesotho Poverty Reduction Strategy 2004/2005 – 2006/2007 and 2012; Lesotho Vision 2020. 3 James Ferguson, The Anti-Politics Machine: “Development”, Depoliticisation, and Bureaucratic Power in Lesotho (London: University of Minnesota Press, 1994), p. 3; Collin Murray, Families Divided: The Impact of Migrant Labour in Lesotho (Cambridge: Cambridge, 1981). 4 Ferguson, The Anti-Politics Machine, p. 3. 5 Neville W. Pule, “Lesotho in Southern Africa” in Neville W. Pule and Motlatsi Thabane (eds), Essays on Aspects of the Political Economy of Lesotho, 1500-2000 (Roma: Department of History, National University of Lesotho, 2002), p. 217.


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Not much has yet been published about Basotho business owners’ participation in the country’s economy, and on the history and role of Basotho’s business associations. With the exception of two biographies of European traders’ activities through their company, Frasers Limited6, entrepreneurship and business history of Lesotho has been treated secondary to major themes of Lesotho’s history, especially the political, social and economic history of the country.7 With the adoption of neo-liberal policies in the post-1990s period in Lesotho, there have been a few studies published about Lesotho local entrepreneurship; its status; challenges; and how it could be developed. Some studies particularly focused their attention on women.8 The aim of this study is to fill this literature lacuna by documenting the history of local business in post-colonial Lesotho with a view to explore Basotho business owners’ attempts to play an increasing role in the country’s economy; how the state and economy worked for, or against, their interests of self-realisation; as well as to evaluate what Basotho business owners have been doing for themselves, and how that can bring about greater economic democracy in Lesotho, using the case study of Lesotho Chamber of Commerce and Industry (LCCI). Formed in 1976, ten years after Lesotho gained independence in 1966, LCCI is the oldest business association in Lesotho. It was registered under Societies Act of 1966. It has wide membership of business owners (men, women and youth) coming from various political and religious affiliations in the categories of small and micro to medium enterprises. These are called Ordinary Members. They join LCCI in the districts. There are ten districts in Lesotho, thus, ten district chambers. They are guided by the constitution of LCCI – the central body. They join their district chambers by paying a subscription fee of R250 (ZAR). Historically, Ordinary Members were mostly retailers. However, in recent years, the leadership of LCCI has been attempting to diversify this membership category. Currently, there are members from various business sectors such as manufacturing, media, tourism, hospitality, consultancies, energy and others. 6 James Walton, Father of Kindness and Father of Horses - Ramosa le Ralipere: A History of Frasers Limited (Morija: Morija Printing Works, 1958); Christopher Danziger, A Traders’ Century – The Fortunes of Frasers (Cape Town: Purnell, 1979). 7 For example see: David Ambrose, Maseru: An Illustrated History (Morija: Morija Museum and Archives, 1993); Stephen J. Gill, A Short History of Lesotho: From the Late Stone Age Until the 1993 Elections (Morija: Morija Museum and Archives, 1993); Timothy Keegan, “Trade, Accumulation and Impoverishment: Mercantile Capital and the Economic Transformation of Lesotho and the Conquered Territory, 1870-1920”, Journal of Southern African Studies, Vol. 12, No. 2 (Apr., 1986), pp. 196-216; Motlatsi Thabane, “Aspects of Colonial Economy and Society, 1868 – 1866”, in in Neville W. Pule and Motlatsi Thabane (eds), Essays on Aspects of the Political Economy of Lesotho, 1500-2000 (Roma: Department of History, National University of Lesotho, 2002). 8 Léo Paul Dana, “Basuto Culture and Entrepreneurship” in Léo Paul Dana and Robert B. Anderson (eds), International Handbook of Research on indigenous Entrepreneurship (Cheltenham: Edward Elgar Publishing Limited, 2007); The State of Small Enterprises in Lesotho (Maseru: Ministry of Trade, Co-operatives, Marketing and Industry, 2008); Maxine Langwena, Barbara Mabuza and Doris Tshabalala, “An Assessment of the Enabling Environment for Women’s Enterprises in Lesotho”, http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---ifp_seed/documents/publication/wcms_184776.pdf, [18th October 2012, 07: 42]. Stéphan P van der Merwe and Mampoi Lebakeng, “An Empirical Investigation of Women Entrepreneurship in Lesotho”, http://www.documbase.com/STEPHAN-M.doc, [22nd October 2012, 10:06].

http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---ifp_seed/documents/publication/wcms_184776.pdf

http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---ifp_seed/documents/publication/wcms_184776.pdf

http://www.documbase.com/STEPHAN-M.doc


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There are also various sectoral business associations, such as associations of farmers, street traders, transport operators, bulk buying co-operatives, women exporters’ associations, youth associations, associations of private security companies and others. These are called Affiliate Members. They have their constitutions that guide their activities. They liaise with LCCI in cross-cutting issues that affect the business community. They join straight at the head office. Their annual subscription fee is R1000 (ZAR). There are also big companies, or co-operations that are members of LCCI. They are called Associate Members. All commercial banks of Lesotho are associates of LCCI, together with brewing companies and some construction companies, as well as, big saving and credit co-operatives, and others. Their membership is R5000 (ZAR) a year. They also join LCCI at the head office. These are institutions that have economic ties with other members of LCCI. For example, Ordinary and Affiliate members of LCCI, save their moneys with commercial banks. LCCI attempts to harmonise relations and operations between these groups. It intervenes when there are problems that they cannot solve on their own. LCCI provides an ideal opportunity to explore the nature and scope of Basotho business owners’ attempts to play an increasing role in Lesotho’s economy since independence. It provides an important platform to, historically and anthropologically, study their constraints and opportunities in local business. These range from individual, collective, cultural, social, technocratic, bureaucratic and political economic constraints and opportunities. The purpose of this progress report is to share my research idea; fieldwork experiences; as well as to offer a simplified version and summary of my findings, thus far. This study has been motivated and fully funded by the Human Economy Programme. The Human Economy is based in South Africa at the University of Pretoria. The programme was started by, and is under the directorship of, two world renowned Anthropologists – Professor John Sharp and Professor Keith Hart. The programme started in 2011. It has 18 post-doctoral fellows, past and present, from around the world, and the African continent. In 2012, the programme extended to include eight PhD students mainly from Africa, south of the Sahara – the group that I am part of.9

The Human Economy: Rationale/ Motivation for the Study

The notion of the human economy has provided motivation to carry out the current research. The human economy refers to an economy where focus is placed “... both on what people do for themselves and on the need to find ways forward that must involve all humanity somehow.”10 It came out of the global social movement which began at the World Social Forum a decade ago. The movement composed of activists and intellectuals who “...questioned the dominant free market and command models of twentieth-century

9 To read more about the programme visit our website at: http://web.up.ac.za/default.asp?ipkCategoryID=15157&language=0; and Prof. Hart’s website, http://thememorybank.co.uk. 10 Keith Hart, Jean-Louis Lavelle and Antonio David Cattani, “Building the Human Economy Together” in Keith Hart, Jean-Louis Lavelle and Antonio David Cattani (eds), The Human Economy: A Citizen’s Guide (Cambridge: Polity Press, 2010), p. 2.

http://web.up.ac.za/default.asp?ipkCategoryID=15157&language=0

http://thememorybank.co.uk/


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economy.” These two ideologies of production were “...based on abstract and impersonal models of human behaviour, remote from the concerns of people on the ground.” Adversely, “...they left the vast majority of the world’s inhabitants – particularly in the global South – in acute poverty and without meaningful freedom.” In contrast, a “...human economy would be one that gives priority to what people really do and think, while addressing the needs of humanity as a whole.”11 Evaluating the world history that has marginalised ordinary people and left the world highly unequal, Keith Hart, Jean-Louis Lavelle and David Cattani argue that “it is time for the people to have their say in economic matters”.12 They emphasise that the human economy is “already everywhere”. They support this by demonstrating that: “People always insert themselves practically into the economic life on their own account.” However, they observe that: “What they do there is often obscured, marginalised or repressed by dominant economic institutions and ideologies.” As a result, the human economy attempts primarily to “... [built] on what is there already and seeks only to gain recognition and legitimacy for what people do for themselves,” individually and collectively, as they express themselves “in domestic life and [organise themselves] informally in the cracks of the economic system; [and as they make] associations for their own protection, better and recreation.”13 It is important to emphasise that the human economy is a vision which is not only limited to the ‘small’ things that the majority of the people do for themselves on the ground. What the people do for themselves is embedded in the larger society and economy. Society is complexly organised, and is characterised by big and impersonal institutions and bureaucracies – states, markets and others. In this sense, the human economy is a “dialectic of small-scale humanism and large-scale impersonal institutions.”14 The human economy was also conceived as a critique to the world economy designed around neo-liberal economic policies. These are economic policies adopted since the 1980s the world over. In the case of Lesotho, the country adopted neo-liberal policies in the mid-1990s. Following the 2008 global crunch, Hart, Laville and Catani argue that conditions are now “...ripe to consider other possible ways forward”15 that are inclusive. Neo-liberalism, at its core, is anchored on the narrow individualistic notion of homo economicus where an individual (economic man) supposedly acts to maximise their utility through rational choice in the context of economic scarcity.16 In this way, this economic system only privileges a few people, while the majority of the people are left marginal in the society. Thus, the human economy attempts to find ways in which the majority of the people can have a meaningful say and participation in economic matters that affects their lives. It is not just within the human economy that neo-liberalism is critiqued. In recent years, neo-liberalism has also been under serious scrutiny by a number of scholars and activists the 11 http://web.up.ac.za/default.asp?ipkCategoryID=15157&language=0, [05th February 2013, 10:45]. 12 Hart, Lavelle and Cattani, “Building the Human Economy Together”, p. 2. 13 Hart, Lavelle and Cattani, “Building the Human Economy Together”, pp. 5-6. 14 “The Human Economy Manifesto”, http://thememorybank.co.uk/2013/01/20/object-methods-and-principles-of-human-economy/, [22nd October 2013]. 15 Hart, Lavelle and Cattani, “Building the Human Economy Together”, p. 1. 16 To read more about the concept of homo economicus see: Hann, Chris and Keith Hart, Economic Anthropology: History, Ethnography, Critique (Cambridge: Polity Press, 2011).

http://web.up.ac.za/default.asp?ipkCategoryID=15157&language=0

http://thememorybank.co.uk/2013/01/20/object-methods-and-principles-of-human-economy/

http://thememorybank.co.uk/2013/01/20/object-methods-and-principles-of-human-economy/


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world over.17 Three examples will suffice in support of this case. Firstly, neoliberalism has been under such increased scrutiny that some scholars have even revisited the academic intensions of its very own founding father, Adam Smith. Amartya Sen, a Noble-Price winning economist and Indian philosopher, based at Harvard University, argues that Smith was not a free-market fundamentalist as he is purported to have been. Sen advances his position by arguing that:

...[T]he ideas presented in The Wealth of Nations have been interpreted largely without reference to the framework already developed in Moral Sentiments (on which Smith draws substantially in the later book), the typical understanding of The Wealth of Nations has been constrained, to the detriment of economics as a subject. The neglect applies, among other issues, to the appreciation of the demands of rationality, the need for recognising the plurality of human motivations, the connections between ethics and economics, and the codependent [sic] rather than free-standing role of institutions in general, and free markets in particular, in the functioning of the economy.18

Secondly, a volume – Market and Society: The Great Transformation Today – based on contributions from various scholars considering the relevance of Karl Polanyi’s theories in the contemporary world was published in 2009. It was compiled and published under the editorship of Chris Hann and Keith Hart. Evaluating Polanyi’s thesis advanced in his magnum opus, The Great Transformation: Political and Economic Origins of Our Times, which was published during the Second World War, in 1944, Hann and Hart observe that this work of Polanyi: “[R]emains the most powerful indictment of what he considered to be the utopian and ultimately destructive attempt to build society on the basis of self-regulating markets.”19 Polanyi (1886-1964) highly opposed market fundamentalism. Polanyi argued that the time between 1815 and 1914 was a period of relative peace and prosperity for most countries of European. During this time, the economic system was designed around self-regulating markets, the gold standard, the liberal state and the balance of power. However, this was utopian and misleading since it was not natural, but artificially created. Thus, it collapsed with ruins effects. He held it that society was naturally designed to provide the material sustenance for the people.20 After the war, Polanyi believed that the market as the engine of societal organisation had run its course. The survival of the liberal economy under the stewardship of the United States, and its results of the post-war economic boom of the 1950s and 60s, rebutted his academic prophecy. The post-war boom was archived through a Keynesian combination of world markets and political control of the economy by leading industrial nations.21 As a result, for

17 See also: Alter-Globalisation Movement; Occupy Wall Street Movement; SADC Neo-liberal Alternatives; and others. 18 Amartya Sen, “The economist manifesto: The 18th-century philosopher Adam Smith wasn’t the free-market fundamentalist he is thought to have”, Newstatesman, http://www.newstatesman.com/ideas/2010/04/smith-market-essay-sentiments, [05th February 2013, 15:00]. 19 Keith Hart and Chris Hann, “Introduction: Learning form Polanyi 1”, in Chris Hann and Keith Hart (eds), Market and Society: The Great Transformation Today (Cambridge: Cambridge University Press, 2009), p.1 20 Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Times (Boston: MA: Beacon Press, [1944]2001); Keith Hart and Chris Hann, “Introduction: Learning from Polanyi 1”, pp. 4-5. 21 Keith Hart and Chris Hann, “Introduction: Learning from Polanyi 1”, pp. 4 and 8.

http://www.newstatesman.com/ideas/2010/04/smith-market-essay-sentiments

http://www.newstatesman.com/ideas/2010/04/smith-market-essay-sentiments


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some time, Polanyi was left marginal in academia. However, according to Hart and Hann, “... the revival of market capitalism and dismantling of state provision since 1980s furnished plentiful material for Polanyi’s thesis that the neglect of social interests must eventually generate a political backlash and a retreat from market fundamentalism.”22 To this day, attention continues to be placed on the free market as the main creator and distributor of wealth. Also, the entrepreneurial behaviour of an individual as an economic man in the market economy continues to be placed at the centre of development policies. Historically, the popular assessment of what entrepreneurs are, or what entrepreneurship is, has largely centred on identifying certain in-born qualities which were to be attributed to individuals who demonstrated high and outstanding levels of business interest, or spirit and motivation. Such individuals were considered to be a ‘rare breed’. These were individuals who risked their lives and resources to procure rare commodities from distant and sometimes dangerous places.23 These individuals further demonstrated their high business motivation and spirit by establishing firms to exploit business opportunities and transform economies.24 In their efforts, entrepreneurs also had to demonstrate high innovation propensities, creativity, and high motivation for achievement, business optimism and leadership against overwhelming odds.25 However, Weber demonstrated that the spirit of capitalism was supplied by social factors. Weber argued that Protestants facilitated rationalisation of religion by dissolving the powers of magic. These were seen as irrational and, thus, had to be weeded out for a rational economic ethic to develop. This was a key issue of modern capitalism. This gave rise to the role of an individual as a rational economic thinker. Weber argued that Calvinism achieved this by its underpinning philosophy which appreciated that “... man was only an administrator of what God has given him.” He argued that: “Out of this system of thought came our word “calling”.” He pointed out that “[i]t expressed the value placed upon rational

22 Keith Hart and Chris Hann, “Introduction: Learning from Polanyi 1”, p. 8. 23 Björn Bjerke, Understanding Entrepreneurship (Cheltenham: Edward Elgar Publishing Inc., 2007), pp. 70-72; Karl H. Vesper, “Unfinished Business (Entrepreneurship) of the Twentieth Century”, in Harold P. Welsch (ed.), Entrepreneurship: The Way Ahead (London: Routledge, 2004), pp. 15-16. 24 Peter F. Druker, Innovation and Entrepreneurship: Practice and Principles (London: William Heinemann Ltd, 1985), pp. 15-16; Bjerke, Understanding Entrepreneurship, pp. 70-71; Gick Wolfgang, “Schumpeter’s and Kirzner’s Entrepreneurs Reconsidered: Corporate Entrepreneurship, Subjectivism and the Need for a Theory of the Firm,” in Nicolai J. Foss and Peter G. Klein (eds), Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (New York: Edward Elgar, 2002), p. 95. 25 Joseph A. Schumpeter, Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process (London: McGraw-Hill Book Company, 1939), p.77; Bjerke, Understanding Entrepreneurship, pp. 70-71; Joseph A. Schumpeter, “The Process of Creative-Destruction” in Scott Shane (ed.), Foundations of Entrepreneurship: Volume I (New York: Edward Elgar Publishing, 2002), pp. 499-598; Wolfgang, “Schumpeter’s and Kirzner’s Entrepreneurs Reconsidered: Corporate Entrepreneurship, Subjectivism and the Need for a Theory of the Firm”, p. 95; Howard H. Stevenson, “Intellectual Foundations of Entrepreneurship” in Harold P. Welsch (ed.), Entrepreneurship, p. 3; David C. McClelland, “Entrepreneurial Behaviour and Characteristics of Entrepreneurs”, in Scott Shane (ed.), Foundations of Entrepreneurship, pp. 179-184.


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activity carried on according to the rational capitalistic principle, as the fulfilment of a God-given task.” The conception of calling gave rise to the modern entrepreneur.26 Hart has also demonstrated that entrepreneurs, a term associated with economic leadership, or what he terms the ‘human face of capitalism’, are not purely driven by rational economic choice when engaging in exchange with others. Writing about a translocal ethnic group in Ghana, the Frafras of Nima slumps, Hart demonstrates the Frafras’ pursuit individual gain, while simultaneously maintaining their various social obligations without contradictions. In their exchanges, the Frafras demonstrated mutual trust, reciprocity, loyalty, gift giving, solidarity, concern for others and goodwill.27 Writing about minority elite entrepreneurs in post-colonial Botswana, Richard Werbner explored trust and mutuality among the Kalanga ethnic group. Instead of focusing on competition and rivalry in business, he focused on how the Kalanga elites created businesses that complemented each other. He also showed how they were able to maintain their cultural heritage and navigate between their village ties and urban life. In complex socio-economic and political relations, the Kalangas, rose from being an insignificant ethnic group to being one of the richest, influential and admired groups in Botswana. Their exchanges were not only anchored on economic thinking but also on trust and mutuality.28 The above debates demonstrate that people’s decisions are not only driven by rational economic thinking. There are other elements as well that drive people’s actions and decisions in business. In light of this, Keith Hart, Jean-Louis Laville and Antonio David Cattani affirm that they “... reject an over-determined view of our society as being merely ‘capitalistic’ in nature.”29 Weber puts it even more bluntly that: “The notion that our rationality and capitalistic age is characterised by a stronger economic interest than other periods is childish”.30 Lastly, in the context of Lesotho, Motlatsi Thabane, a Professor of History at the National University of Lesotho, recently delivered a seminar paper on liberal democratic pursuits in Lesotho, and the liberal economic organisation of the country since the 1990s. Amongst others, he argues that the adoption of neo-liberal economic policies has left the majority of the people in poverty and without any meaningful say and participation in economic matter that affect their lives. He argues that the adoption of liberal democracy has only been a “middle class dictatorship,” which has benefited only a few at the top. He concludes that, historically in the modern world, there have never been any major economic and political forms that have attempted to meaningfully place the interests of the majority as priority.31

26 Weber, General Economic History, p. 269. 27 http://thememorybank.co.uk/book/chapter-3/, [07 October 2012, 06:21]. 28 Richard Werbner, “Cosmopolitan Ethnicity, Entrepreneurship and the Nation: Minority Elites in Botswana”, Journal of Southern African Studies, vol. 28, no. 4, 2002, pp. 731-753. 29 Keith Hart, Jean-Louis Lavelle and Antonio David Cattani, “Building the Human Economy Together” in Keith Hart, Jean-Louis Lavelle and Antonio David Cattani (eds), The Human Economy: A Citizen’s Guide (Cambridge: Polity Press, 2010), p. 10. 30 Marx Weber, General Economic History (New York: Collier, 1961), p. 261. 31 Motlatsi Thabane, “Liberal Democracy: a Vehicle for popular participation and socio-economic delivery to the poor? Some local lessons”, Seminar paper presented at the National University of Lesotho, 17th October 2013, Roma, Lesotho.

http://thememorybank.co.uk/book/chapter-3/


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Furthermore, another important aspect to explore in the case of this study is the human economy-commerce (money and markets) nexus. This is because the study is about entrepreneurship in businesses classified as Micro to Small and Medium Enterprises in Lesotho. These are businesses which indigenous Basotho mostly operate. They typically employ between one and fifty people. They are in the following areas: informal businesses, retailing, service, manufacturing, agro-processing, tourism, professional, financial and commercial farming sectors. Excluding informal businesses, these businesses comprise 85% of Lesotho’s local business. There is an estimated 100 000 Small and Medium Enterprises (SMEs) in Lesotho. They employ about 300 000 people.32 When the country implemented the International Monetary Fund’s (IMF) Poverty Reduction Strategies in 2004, SMEs were identified as one of the central pillars of developing the economy.33 There is always confusion between money and markets when used ‘for’ the people and when used ‘against’ the people. The function of money and markets is often confused with tendencies of multinational co-operations that use money against the people. These two should be carefully distinguished. This distinction is observed in the study. The Human Economy advances that existing conditions and economic formations should be examined more carefully to select those that better facilitate the inclusion and advancement of all the people. Money and markets are indispensable to this process. Keith Hart suggests that money and markets perform the role of bringing people together in both personal and impersonal ways, and have historically offered means of escape from systems of oppression. He argues that money and markets are intrinsic to the human potential. As such, they are not anti-human as they often purported to be.34 It is within this context of the Human Economy that this study is conducted in Lesotho. The study will also be a contribution to on-going debates about the marginal position of the majority of the people; and suggest ways in which what people are already doing for themselves can be given meaningful recognition by offering lessons from Lesotho’s local economy. This will be done by studying what Basotho business owners have been doing for themselves, individually and collectively, as well as, their opportunities and constraints in the economy, using the case study of LCCI. Research focused on what Africans have been doing for themselves will be helpful to evaluate the potential of Africa; its people; and the role it could play in the development of inclusive economic policies and approaches that are informed by real life conditions and collective interests. This approach will also serve as a rebuttal to the pessimistic perception that Africa is a hopeless and doomed continent, to the one where policy-makers and developers can see the real potential of Africa’s development in the 21st century for the majority of the people.

32 Lesotho Poverty Reduction Strategies 2012, pp. 107-110; The State of Small Enterprise in Lesotho (Maseru: Ministry of Trade and Industry, Cooperative and Market, 2009), pp. 1-2; Lesotho White Paper on the Development and Promotion of Small Business, 2002. 33 Poverty Reduction Strategies, 2004. 34 http://thememorybank.co.uk; Keith Hart, “Heads or Tale: Money is always personal and impersonal”, Anthropology Today, 23: 5 (2007), pp. 12-16.



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The study will also cover non-members of LCCI – individual business owners and business associations. When I got to Lesotho for fieldwork, LCCI had certain limitations that necessitated me to go beyond its membership. For example, LCCI does not have a large number of manufacturers. Most critically, this is because LCCI has its origins in retail. The origins of modern business in Lesotho are in retail and wholesale businesses. As it will be seen later, it was formed in 1976 as an amalgam of two racially separated business associations. These were the Europeans’ only-Chamber of Commerce of Lesotho (formed in 1890) and Basotho Traders’ Association (formed in 1968). LCCI also faced a number of internal and external political economic factors had killed its membership around the country.

Research Methods and Fieldwork Experiences In order to learn what Basotho business owners have been doing for themselves in the economy, since independence, the study has been designed in an interdisciplinary manner by using historical methods (oral and documentary sources), ethnography and a case study method. Historical and anthological research approaches have been appropriate to bring the researcher close to what Basotho business owners have been doing on the grassroots from the past to the present. Again, case studies are useful for “...understanding the uniqueness and idiosyncrasy of a particular case in all its complexity.” The purpose of the case study is to explore the dynamics of some kind of a “single bounded system ... such as a family, group, community...” and so on.35 The study is both qualitative and quantitative. It is the former in the sense that it uses both historical and anthropological narratives. It is the latter in the sense that descriptive statistics are used for illustrative purposes. Historical research is a chronological and systematic inquiry and analysis of events that happened in the past. This is achieved through the use of historical records and oral histories.36 The historical research approach is complemented by ethnographic research. The term ethnography comes from the Greek words, ethnos, meaning ‘people’ and graphein, meaning ‘to write’. Thus, it is writing about people, and in this particular case, Basotho business owners. It entails observation and participation in people’s daily activities.37 The use of ethnography and oral histories has been helpful because certain archival sources have not yet been availed for public use in Lesotho. In accordance with Lesotho’s Archives Act No. 42 of 1967 and Archives Regulations of 1972 (Section 19) “... no archives that are 30 years shall be made available to the public.”38 As a result, the study has relied on historical records, oral histories, ethnography and secondary sources. In terms of primary sources, the study has relied on: archival sources, LCCI minutes, reports and other documents, diaries of LCCI members and non-members, 35 Welman, Kruger and Mitchell, Research Methodology (Cape Town: Oxford University Press Southern Africa, 2005), p. 25. 36 Tosh, John, The Pursuit of History: Aims, Methods and New Directions in the Study of Modern History (Longman, Cape Town, 2000). 37 Jan Nieuwenhuis, “Qualitative Research Designs and Data Techniques” in Kobus Maree (ed.) First Steps in Research (Pretoria: Van Schaik, 2007), pp. 76-77; Yvonne Darlington and Dorothy Scott, Qualitative Research in Practice: Stories from the Field (Crow’s Nest: Allen & Unwin, 2002), p. 74. 38 Archives Act No. 42 of 1967 and Archives Regulations 1972, Lesotho National Archives.


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memos, business profiles, local business development policies and programmes, local business public institutions’ documents, development plans (which usually took the form of Five-Year Development Plans), newspapers, magazines, radio and television talk shows and news, government circulars, reports, dissertations, court cases (at the Lesotho High Court Library), seminar papers, commissioned studies, court judgements, legal documents, conference proceedings and occasional papers. Many of these documents I got from the Lesotho National Archives, National University of Lesotho Archives, Morija Museum and Archives, LCCI Headquarters, House9 Collection and Publications in Ladybrand (Owned by Prof. David Ambrose), Ministry of Planning and Development, Bureau of Statistics, Central Bank, Lesotho National Development Corporation (LNDC), Basotho Enterprises Development Corporation (BEDCO), the Ministry of Finance Library and the Ministry of Trade, Co-operative and Marketing Library. However, the Ministry of Trade could not allow me to use documents other than those which are not published on their website. I had wanted to use their primary sources since the role of the Ministry is central in business. Since April, I have been making formal attempts to access the Ministry of Trade’s records, but to no avail. The Deputy Principal Secretary informally allowed me access to their records. He informed me to write a formal letter requesting such records. I was informed by the legal office that they had records dating as far back as 1986 to 2006, and I could be given access to such records. However, when I was to start going through the documents, I was informed that the Ministry had withdrawn its decision. But, I could only interview civil servants in the Ministry. I have been trying to secure appointments with a number of them until now. Likewise, my attempts have not been successful. The study also benefited a lot from digitalisation of information in Lesotho. Many documents and newspaper articles from various organisations, ministries, high court, NGOs, international project, and other institutions can be found on the internet. The study was also aided a lot by getting certain documents from various people who had collected certain documents and shared them with me. Suffice to mention, these are some of the ways in which I was able to overcome certain challenges regarding data collection such as lack of access to certain records; lack of consistent statistics; poor record keeping; as well as limitations of historical research in the post-colonial period. In terms of oral sources, interviews with some founding members of LCCI, committee members and general members of LCCI around the country, since its establishment in 1976, has been taking place since August 2013. These are people who have first-hand information about the activities of the organisation. A digital voice recorder was used to capture informants’ data. In-depth face-to-face interviews have also been used to gather information from senior government officials, civil servants (and ex-civil servants) and other people who were involved in designing post-colonial local business infrastructure. So far, interviews have conducted in five districts of Lesotho using purposive and snowballing sampling research techniques. District Chamber committees, other business associations and business owners coming from various business sectors and backgrounds have been interviewed, and will also be interviewed in the remaining five districts of the country.


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It is important to cover all the districts of Lesotho because the country is divided into two major ecological zones, which have influenced the development of the country economically. These are the Lowlands and the Highlands. Conditions in these two regions are different. The Lowlands are characterised by better business services, infrastructure, transport, communication, government services, information, etc, while the Highlands are peripheral, mountainous and characterised by poor roads, telecommunication, infrastructure, scattered settlements, and so on. Lastly, in the period between March and August, I was based full time at the LCCI head office to observe and participate in its activities. These activities largely centred on attending meetings, conferences, workshops and participating in, and listening to, informal office discussions. Not only was I able to gather insights regarding the operations of LCCI, but, I was also able to study entrepreneurship development initiatives being implemented by the government of Lesotho. I was also able to network with the business community. Through this, I was able to gather more insights about Lesotho’s business as well as identify people I could interview. Minutes and notes of my participation and observations from these activities will also be used for the study. I was also able engage in informal discussion, or interviews with members of LCCI, its leadership and the business community and various civil servants and NGO workers. It was vital in building rapport and trust, which are also important aspects of gathering data. In essence, despite various fieldwork challenges, the research methods adopted for the study have provided a holistic and interdisciplinary approach which has be effective towards gathering information on the history of entrepreneurship and business in post-colonial Lesotho. This is also one of the approaches recommended by various members of the African Economic History academic community in their attempts of reviving the discipline to address contemporary societal economic challenges. The work of our host, Erik Green, and other founding members of The African Economic History Network, in this instance, can be cited.39

African Business and Entrepreneurship Development: Debates and Practices in the Post-colonial Period – Situating Lesotho

Entrepreneurship and business ideas and developments in Lesotho took place within the wider context of practices and debates on African entrepreneurship and economic development in the post-colonial period. Many African countries gained independence in the 1960s during the Cold War period. Consequently, newly independent countries had to choose between following the United States’ (US) capitalist economy, or Union of Soviet Socialist Republic’s (USSR) socialist/communist economy. Those that opted for capitalism had to create a vibrant economy to develop, as prescribed by the modernisation development model. As Keith Hart states,

39 Morten Jerven, Gareth Austin, Erik Green, Chibuike Uche, Ewout Frankema, Johan Fourie Joseph E. Inikori, Alexander Moradi, and Ellen Hillbom, “ Moving Forward in African Economic History: Bridging the Gap Between Methods and Sources” - African Economic History working paper series no. 1/2012, http://www.aehnetwork.org/wp-content/uploads/2012/05/AEHN-WP-1.pdf, [15th November 2013, 14:34].

http://www.aehnetwork.org/wp-content/uploads/2012/05/AEHN-WP-1.pdf


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Supporters of American “free enterprise” held that modernisation of the former colonial peoples would come if a cluster of institutions, what I call “the middle class package”, could be successfully transplanted from the West: cities, education, science and technology, the rule of law, democracy and, of course, capitalist enterprise personified as a type, the entrepreneur.40

The government of newly independent Lesotho also followed this economic route. To that end, it set up modern public institutions and infrastructure aimed at developing the country’s free market economy with the help of international organisations and donors.41 One of the first institutions that were formed by the government was the Lesotho National Development Corporation (LNDC). The parastatal was formed in 1967, a year after Lesotho gained independence in 1966. It was mandated to attract foreign investment and to assist the government in designing policy and cultivating a favourable business environment for foreign investment in post-colonial Lesotho. LNDC has erected numerous building in selected parts of Lesotho. These premises are used as business offices, warehouses and industrial shells meant for the creation of a vibrant capitalist economy. These buildings are used by investors, who are given numerous investment incentives. Governments of Lesotho have highly followed this economic strategy instead of developing local businesses because investors employ more people than local businesses. One of the necessary requirements for creation of a capitalist economy, in the post-colonial period, was the existence of a vibrant local business in the hands of local “modern businessmen”. However, according to the government and its advisors, these prerequisites were non-existent. They described Basotho business owners as traditional and lacking an adequate entrepreneurial spirit and entrepreneurial skills. This view existed in Lesotho throughout the colonial period. Against the background of the world-wide recession of the 1930s, the Basutoland colonial government commissioned Sir Alan Pim to conduct a survey of the country’s economic and financial position in 1935. In assessing the state of local trade and performance of local traders, the Commission asserted that Basotho traders lacked business skills and methods.42 The Commission’s observations were an endorsement of a view long-held by European traders and colonial officials, namely that Basotho lacked entrepreneurial initiative, and that Basotho traders lacked adequate business skills, business ethics and business interest. 43 With Pim’s endorsement, this view was referred to in official and other attempts to explain the undeveloped state of local business in Lesotho, which was characterised by the low quality and level of Basotho’s participation, lack of growth and failure of Basotho-owned

40 http://thememorybank.co.uk/book/chapter-3/, [07 October 2012, 06:21]. 41 Motlatsi Thabane, “Financial Institutions in the Destruction of the Natural Economy and Attempts at Capitalist Developments in Lesotho”, paper presented in the Nordic Africa Institute Conference on Financial Institutions in the Political Economy: Cases Studies from Pre-colonial, Colonial and Post-Colonial Africa, Rosendal, Norway, 11-14 June 1998; Motlatsi Thabane, “Indigenous Entrepreneurial Initiative and Attempts to solve Problems of access to Credit in Lesotho, 1868-1975”, pp. 9-10. 42 Financial and Economic Position of Basutoland, Report of the Commission Appointed by the Secretary of State for Dominion Affairs (London: His Majesty’s Stationery Office, 1935), p. 62. 43 Trade, National University of Lesotho Archives (NULA), Leribe Collection (LC) 23/1-12, 25/2, 26/1-4, 3/5; Trade, Lesotho National Archives (LNA), S3/26/1/1-11.



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businesses. This view has been inherited by post-colonial governments and their advisors in their attempts to develop local entrepreneurship and explain poor performance by Basotho business owners. To remedy the poor state of local entrepreneurship in post-colonial Lesotho, the government established Basotho Enterprises Development Corporation (BEDCO) in 1975. It was created as a subsidiary of LNDC. In 1980, an act of parliament was passed to make it an independent institution. BEDCO was meant to develop Basotho enterprises through training of entrepreneurial skills, provision of small-scale credit so as to cultivate the spirit of entrepreneurship, or build a society with a business culture, or build a business minded society. It was established as an incubator of Basotho businesses. Apart from subvention fund from the government, BEDCO largely relied on aid to carry out its activities. BEDCO erected small business incubation shells in selected parts of the country. These buildings were rented out to Basotho business owners with the aim that they would graduate to bigger businesses where they would then be assisted by LNDC. However, many businesses never graduated and passed the incubation process. Due to financial constraints, BEDCO was forced it to resort to extracting rent from these incubation shells, instead of carrying out is developmentalist mandate. Throughout the post-colonial period, LNDC and BEDCO have operated as two separate arms of the Ministry of Trade and Industry. This generally demonstrates the bifurcated nature of Lesotho’s post-colonial economy, with LNDC as the most respected and prestigious institution over BEDCO. Mandates and functions of these two institutions have historically conflicted instead of synchronising. In all these, LNDC has always been given better preference and treatment over BEDCO. Furthermore, in 1978, Business Training Centre (BTC) was launched as a joint initiative between the Institute of Extra-Mural Studies (IEMS) and the Ministry of Finance, Commerce and Industry. Its main duty was to offer business training “to accelerate active participation of the local business community…”44 BTC formed local links with BEDCO, LCCI, Lesotho Opportunity Industrialisation Centre (LOIC) and the IEMS’ Students Internship Programme.45 The Students Internship Programme was a United States Agency for International Development (USAID) funded project established, among others, “...to nurture and develop a spirit of entrepreneurship among the students.”46 However, the programme was closed down in the early 1990s having training many Basotho who aspired to be in business as well as those who were already in business. The government, with the assistance of international institutions and organisations, also implemented a number of projects which were meant to industrialise and modernise

44 Business Training Centre, “Report of the International Conference on Strategies for Small Business Survival and Growth in BLS Countries”, p. 5; Institute of Extra-Mural Studies, Annual Report of the Year 1978/79 (Mazenod Printing Works, Mazenod, 1979), p. 9. 45 S. W. Rembe, “Evaluation of Business Training Division”, pp. 31-36; Institute of Extra-Mural Studies, Annual Report for the Year 1984/85 (Mazenod Printing Works, Mazenod, 1986), p. 12. 46 S. W. Rembe, “Evaluation of Business Training Division (BTD)”, p. 36.


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agricultural production in Lesotho.47 To finance agricultural development in the post-colonial period, the government established an agricultural bank, Lesotho Agri-Bank, in the late 1980s. The bank collapsed in the mid-1990s under complex political economic factors and mismanagement of funds, which were never disclosed to the public. Modernisation of agriculture in Lesotho also meant modernisation of Lesotho’s traditional land tenure arrangement. The justification for this was traditional land tenure did not encourage investment, and land could not be pledged as collateral when borrowing money from commercial banks. One example will be provided to support this. In the immediate post-colonial period, John Williams wrote about Lesotho’s land tenure and economic development. He argued that customary land tenure held the country’s economy backward. He alleged that, as opposed to private ownership of land, customary land tenure did not give landholders security, since there was no assurance that land allocated would not be appropriated due to discretionary powers held by the land allocating authorities, the chiefs. He pointed out further that, because of customary allocation of land, land holders were not motivated to invest in it.48 These allegations persist in the post-colonial period. They are used as means to justify reform land tenure for the benefit of urban based business elites, who seek to venture into agro-business. However, this assertion was not accurate. It was not backed by evidence relating to Lesotho’s history of land allocation and politics. It was an assessment based on modernisation stereotypes. Studying rural communities in the districts of Maseru and Mafeteng in the 1990s, Neville Pule and Motlatsi Thabane support that the rationale behind the view that traditional land tenure system in Lesotho does not give the land holder security of tenure is not accurate. They argued that agricultural failure in Lesotho should be attributed to other factors such as lack of capital to secure farm inputs, lack of equipment, land shortage, historical factors and environmental factors.49 Suffice to emphasise, into the post-colonial period, business development debates were focused on the perceived limitations that African cultures and other traditional forms impose on individuals’ entrepreneurial behaviour in preparation for industrial take-off. The argument was that African cultures and traditions hindered and discouraged individual private accumulation. African entrepreneurial initiatives and skills were consequently questioned and judged as inadequate.50 Modernisation-inspired scholars argued that African business owners lacked economic rationality; they did not perform well in business

47 One of the projects, the Thaba-Tseka Development Project, was studied in depth by James Ferguson in the late 1980s. The results of his anthropological study were first published in 1990 as his famous book, The Anti-politics Machine: : “Development”, Depoliticisation, and Bureaucratic Power in Lesotho (London: University of Minnesota Press, [1990] 1994). 48 John C. Williams, Lesotho: Land tenure and Economic Development (Pretoria: Africa Institute of South Africa, 1972), pp. 6-12. 49 Neville Pule and Motlatsi Thabane, “Lesotho’s Land Tenure Regimes: Experiences of Rural Communities and the Calls for Land Reforms”, Journal of Modern African Studies, 42: 2 (2004). See also, Motlatsi Thabane, “Antecedents of Opposition to Foreigners’ Acquisition of Land Rights in Lesotho: The Case of Prospecting and Mining, 1870-1955”, seminar paper presented at the National University of Lesotho, Roma, 05th February, 2010. 50 Volker Wild, Profit not for Profit’s Sake: History and Business Culture of African Entrepreneurs in Zimbabwe (Harare: Baobab Books, 1997); Bruce Dinwiddy, Promoting African Enterprise (London: Croom Helm, 1974).


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because they supported huge extended families and they also pleased family members with business resources. They also argued that African business owners pursued economically imprudent ‘hand-to-mouth’ management practices, which hindered them from saving, reinvesting and expanding their businesses. Finally, these scholars also maintained that African business owners participated in business for prestige and status inflation, rather than to maximise accumulation.51 Scholars who disagreed with these modernisation views emphasised, instead, the difficult and complex political-economic conditions in which African business owners had to operate in the colonial and post-colonial period.52 For example, in Zimbabwe, M. J. M Sibanda used the case study of bus operators in the rural periphery of Salisbury (now Harare, the capital of Zimbabwe) to challenge colonial stereotypes and modernisation perceptions of the development of African business and also to demonstrate that, in cases where colonial institutional constrains were less developed, African business owners demonstrated better economic performance.53 In his study of the rise of middle-classes in Zimbabwe, Michael O. West demonstrated that African business owners, as part of the middle-classes, experienced difficulties because of the colonial economic setup and hostility which prevented them from emerging as a defined class.54 In the specific case of Lesotho, Motlatsi Thabane’s chapter on “Aspects of the Colonial Economy and Society, 1868-1966” in Essays on Aspects of the Political Economy of Lesotho, 1500-2000, argues that Lesotho’s commerce was dominated by European traders who strategically excluded Basotho from commerce by restricting them with trading licences. Basotho attempted to seize opportunities brought by European commerce but their efforts were in vain. Owing to this, Thabane argues that Basotho traders established Thekommoho to buy stock in bulk from South African manufacturers and wholesalers together. However, it collapsed under complex political economic factors, together with many Basotho’s businesses.55 In the 1970s, the global economic boom of the post-WWII reconstruction years came to an end with ruinous effects on African economies. Until then, guided by Keynesian economic

51 Volker Wild, Profit not for Profit’s Sake, Theodore Geiger and Winifred Armstrong, Development of African Private Enterprises (Washington: National Planning Association, 1964); Peter Marris and Anthony Somerset, African Businessmen: A Study of Entrepreneurship and Development in Kenya (Nairobi: Routledge, 1971), pp. 13-19; Bruce Dinwiddy, Promoting African Enterprise (London: Croom Helm, 1974). 52 John Iliffe, The Emergence of Capitalism in African (London: Macmillan Press Ltd, 1983); Alois Mlambo, “Cultural Obstacles or Colonial Barriers? A Review of Profit not for Profit’s Sake: History and Business Culture of African Entrepreneurs in Zimbabwe by Volker Wild”, The Zimbabwean Review, January 1993), pp. 12-13. 53 M. J. M. Sibanda, “Internal Dependency and African Economic Performance in Colonial Rhodesia: The Case of Bus Operators in the Rural Periphery of Salisbury, 1938-1970”, Mohlomi, Journal of Southern African Historical Studies, iii: iv (1981), pp, 1-11. 54 Michael O. West, The Rise of an African Middle Class: Colonial Zimbabwe, 1898-1965 (Bloomington: Indiana University Press, 2002). 55 Motlatsi Thabane, “Aspects of Colonial Economy and Society” in Neville W. Pule and Motlatsi Thabane (eds), Essays on Aspects of the Political Economy of Lesotho, 1500-2000 (Roma: Department of History, National University of Lesotho, 2002). I provide a more detailed history of this co-operative in my M.A. Dissertation; “Basotho Traders’ Attempts to Gain Access to, and Control Over, Local Trader in Colonial and Immediate Post-colonial Period, 1970-1970”, Department of Historical Studies, National University of Lesotho, May 2011.


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theory, countries around the world had placed the state at the centre of economic development. Now the focus shifted to individual entrepreneurship, as the state was increasingly regarded as inefficient. Focus was placed more on rolling back the state in order to allow for a greater role to free enterprise. As many African countries were experiencing severe poverty in the 1980s, interest in business and role of individuals as the engine for development was also renewed world-wide.56 In an attempt to address poverty, unemployment, inequality and the poor performance of many African economies, international financial institutions promoted the entrepreneurial role of individuals in the economy. As in the immediate post-WWII period, the understanding continued to be that the economies and people needed to be innovative. Efforts by governments, non-governmental organisations (NGOs) and international institutions were then geared towards propagating the spirit of entrepreneurship.57 Not surprisingly, therefore, the International Monetary Fund (IMF) and the World Bank introduced Structural Adjustment Programmes (SAPs) in Africa from the 1980s onwards. SAPs worsened the poverty ordeal in Africa.58 With business and entrepreneurship seen as the driving engine of economies, studies were then focused on identifying constraints that hindered individuals’ entrepreneurial flair to flourish. Constraints were seen as poor business infrastructure, lack of funding and marketing opportunities, poor governance and corruption, poor business networks, and cultural barriers, among other challenges.59 Solutions from scholars coming from various academic disciplines in the quest of solving inequality and poverty also emphasised the

56 http://thememorybank.co.uk/book/chapter-3/, [07 October 2012, 06:21]. 57 Irma Booyens, “Are Small, Medium- and Micro-sized Enterprises Engines of Innovation? The Reality in South Africa”, Science and Public Policy, 38: 1 (2011), pp. 67-78; Moses N. Kiggundu, “Entrepreneurs and Entrepreneurship in Africa: What is Known and What needs to be Done”, Journal of Developmental Entrepreneurship, 7: 3 (2002), pp. 239-258; Marie Gad, “A Better Future for Africa”, Organisation of Economic Co-operation and Development Yearbook, 2012; Peter J. Boettke, “Editorial: Entrepreneurial Responses to Poverty and Social Conflict – The Enterprise Africa Project!” Economic Affairs, 27: 2 (2007), pp.2-5; Daniel N. Dalohoun, Andy Hall and Paul Van Mele, “Entrepreneurship as a Driver of a ‘Self-organising System of Innovation”, The Case of NERICA in Benin”, International Journal of Technology and Sustainable Development, 8: 2 (2009), pp. 87-101.

58 For more information and impact of SAPs see; A. S. Mlambo, “Towards an Analysis of IMF Structural Adjustment Programmes in Sub-Saharan Africa (SSA): The Case of Zimbabwe”, African Development, XX: 2 (1995), pp. 77-98; Joseph Kipkemboi Rono, “The Impact of the Structural Adjustment Programmes on Kenyan Society”, Journal of Sociological Development in Africa, 17: 1 (2002), pp, 81-98; A. S. Mlambo, E. S. Pangeti and I. Phimister, Zimbabwe: A History of Manufacturing, 1890-1995 (Harare: University of Zimbabwe Press, 2000), pp. 110-122. 59 Gideon Nieman, Thea Visser and René van Wyk, “Constraints Facing Tourism Entrepreneurs in South Africa: A Study of the Gauteng and Mpumalanga”, Development Southern African, 25: 3 (2008), pp. 283-296; E. B. J. Iheriohanma, “Capacity Building, Leadership Question and Drains of Corruption in Africa: A Theoretical Discourse”, Asian Social Science, 7: 3 (2011), pp. 131-138; Peter Koveos, Pierre Yourougou and Ben Amoaku-Adu, “Entrepreneurship in Africa: Editors’ Note”, Journal of Developmental Entrepreneurship, 16: 1 (2011), pp. 1-7; Boris Urban, “Entrepreneurship in the Rainbow Nation: Effect of Cultural Values and ESE on Intentions”, Journal of Development Entrepreneurship, 11: 3 (2006), pp. 171-186.



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inclusion of marginalised groups such as women, youth and people with disabilities through entrepreneurship.60 In Lesotho, from the 1990, throughout the 2000s, to the present, the role of the government as the main engine of economic development was also rolled back as the government adopted neo-liberal policies. These policies were mainly driven with assistance and guidance of the World Bank. The process started when the country adopted the IMF and World Bank Structural Adjustments in the early to mid-1990s. There was privatisation of many public industries, as well as provision of services. Interest in entrepreneurship and business as the drivers of the economy in Lesotho intensified. Many programmes and policies were formulated and implemented. A number of studies were also commissioned. These are used as references in study. Like in the immediate post-colonial period, the main approach was to modernise the local economy in order to create a ‘business friendly’ environment by reforming laws, infrastructure and services, land tenure and so on, for the benefit of local Basotho business owners. The post-1990s period has been labelled a ‘private sector-led development’ era. It is driven by the spirit of a fashionable term; private-public sector partnership (PPP). Through this ‘private sector-led development’, the government of Lesotho received massive financial, technical and human resource support from international governments, institutions, and organisations such as the World Bank (which is leading), United Nations, and many others. For example, in 2001, the government created Small, Micro and Medium Enterprises Network (SMME Network) to develop local business, and connect Basotho’s with government. In 2005, the government launched the Smart-partnership Hub with the rationale to ‘create dialogue’ between the business community and government. Through the Hub, and assistance from the World Bank, the government created a body called the Business Council. The Council consisted of representatives of business community and government. It was then chaired by the Prime Minister. In 2007, the World Bank further assisted the government of Lesotho to establish a business and entrepreneurship development programme know as Private Sector Competitiveness Project. The project provides small business grants, technical and advisory support to business owners and business associations. The Ministry of Trade, Co-operatives, Marketing and Industry also launched Entrepreneurship Support Programme. There were also special programme directed at women and youth in business for poverty alleviation and employment creation. In the period between 2007 and 2011, the Ministry of Gender, Sports, Youth and Recreation with the assistance of United Nations Development Programme (UNDP), International Labour Organisation (ILO) and the World Bank (through Millennium Challenges Account – MCA) established a number of business and entrepreneurship programmes directed at developing women and youth aspiring to be in business, as well as, those already in business. These projects were: Women’s Enterprise

60 Linda Scott, Catherine Dolan, Mary Johnstone-Louis, Kimberly Sugden and Maryalice Wu, “Enterprise and Inequality: A Study of Avon in South Africa”, Entrepreneurship: Theory and Practice, 36: 3 (2012), pp. 543-568; Been H. Becka and Mike Rimmingto, “Entrepreneurship as a Career Option for Youth”, Journal of Developmental Entrepreneurship, 16: 1 (2011), pp. 145-164; Fred Ahwireng-Obeng, “Gender, Entrepreneurship and Socio-economic Reparation in South Africa”, Review of Black Political Economy, 22: 2 (1993.), pp. 151-165.


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Development and Gender Equality Southern Africa (WEDGE - SA), Know Your Business – Youth Employment Creation Project, and Gender and Economic Rights Projects. In 2007, a business micro financing project was launched along-side these women and youth projects. This micro financing project is called Molika-liko Micro Financing. After being trained, women and youth are pooled into groups of ten to form either co-operatives, or enterprises. Subsequent to forming and registering their co-operatives, or enterprises, they then apply for small loans from the micro finance. Those that qualify, are given business loans. These are small loans which range between R3000.00 and R6000.00 (ZAR). A number of women and youth have benefited from the project. Women groups have demonstrated more continuity and better repayment of loans than youth. This is a very small amount of money, which at best, can only sustain small business ventures. In the post 1990s period, NGOs have also been increasingly involved in the development of local entrepreneurship and business. Some NGOs are directly involved in entrepreneurship development by offering trainings and assisting people to create businesses. These are NGOs such as Hand-in-Hand Enterprise southern Africa, Mineworkers Development Agency, and others. Other NGOs are involved in local entrepreneurship development through advocacy and research. One of the active one in this regard is the Lesotho Council of Non-governmental Organisations. In the post-1990s period, apart from various programmes and policies designed and implemented by various local and international organisations, institutions and the government, the period has also seen a proliferation of business associations, small and a few big ones. Government and its advisors (especially, the World Bank), argued that Lesotho’s private sector is fragments, and by that token, weak. With the influence of the government, a group of urban-based business elites formed a business association called Mohloli Chamber of Business. It collapsed shortly after it was formed. It was then succeeded by Private Sector Foundation of Lesotho (PSFL) in 2008. PSFL is a World Bank founded business association, which was meant to be an ‘umbrella’, or ‘mother’ business association in the country. Like Mohloli Chamber of Commerce, PSFL membership is concentrated in Maseru, the capital city. Its membership consists of urban-based business elites who have close relations with the government and various individual government officials. Members of these associations benefited from government tenders, which were circulated around their members, few politicians, friends and family members. In their efforts, the majority of the business owners were marginalised. The phenomenon degenerated into an economic moral crisis as some elites and civil servants and top government offices that had businesses, or stakes in some businesses, were so publicly arrogant about converting public funds into private pockets. This locally came to assume a sarcastic name in the public space, ‘tenderpreneurship’. There were so many newspaper reports and gossips spreading around about illegal awarding of tenders; favouritism; over costing; or over pricing of services and products provided; bribery of tender awarders; and non tax compliance. The situation hit a moral crisis to a point where, even within their business elitist circles, people fought for tenders.


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Currently, there is a number of pending court cases against many of these business elites, as well as, convictions. The fortunes of these business elites further deteriorated when a new government composed of three parties was formed after 2012 elections. The new government, led by the All Basotho Convention (ABC), has devoted its efforts towards uprooting corruption and reducing economic monopoly of the a few individual business elites who benefited. To that end, a number of people are under investigation, while some have already been convicted. With regards to some entrepreneurship projects run under some Ministries, as seen above, the plundering of public resources extended to a point where some international partners pulled out. There was misuse of funds and mismanagement of project funds, as well as, poor accountability. On top of that, various projects were used to pursue political agendas, instead of developing local entrepreneurship. More profoundly, projects were used to advance the monopoly of the ruling party, and membership recruitment. People who did not supports efforts of the ruling party, Lesotho Congress for Democratic (LCD), were side-lined, while those who complied were rewarded by being included in various projects. This is not meant to discredit the fact that there were many people who participated in, and benefited from, these projects. Some people were simply oblivious of the political economic implications that were taking place. Benefits that they got were only incidental and episodal. In 2011, another business association was formed by the Lesotho Revenue Authority (LRA). This was called LRA – Partnership Business Forum. When it was initially proposed, it was only meant to be a ‘forum’ where various business associations, and not individuals, would meet to democratically discuss and deal with common business problems and share opportunities. However, when it was formed, this was abandoned. It was then formed, literally, as a replica of other business associations, except that it has a secretariat based at LRA headquarters. LCCI withdrew its participation due to this. As a tax collector, the Authority was interested in forming the association in order to create a wider tax base. Opportunities and benefits that the majority of the business owners got in the post-1990s, through developments in local entrepreneurship and business, have only been incidental and episodal. People who massively benefited were a few individual business elites who had close relations with top government officials, few politicians, party members, friends and family. Despite this, the majority of the people in various business sectors grouped themselves in attempts to advance and protect their interests in the economy. Since independence, it emerges that policies, programmes and institutions meant to develop local business and entrepreneurship by governments of Lesotho, have been imported from international organisation and institutions such as the World Bank, International Monetary Fund, United Nations’ Organs, and others. Governments do not develop their own policies. They follow the dictates of these institutions continuously. These institutions bring money, which is often misused by top government officials. This has led duplication of programmes and lack of synchronised attempts. Government change in Lesotho does not significantly affect business policies. Governments of Lesotho consistently


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advertise the country as poor, impoverished, and in need of assistance. Many international organisations have responded to this call.61

Origins of the Formation of LCCI: Historical Overview of the Political Economy of

Colonial and Immediate Post-colonial Local Trade62 Basotho, people of Lesotho, are descendants of Iron Age Bantu communities that settled in southern African from the 16th century. Particularly, these were communities that settled in an area which was known as the Highveld, and all the way down to the Mohokare Valley. These are areas that form part of the modern-day Free State Province of South Africa and Lesotho. They were organised into small independent chiefdoms. They used clan totems (liboko) to express their autonomy and identity. Economically, they depended on crop production and pastoralism. They supplemented that with gathering of wild vegetables and hunting.63 Largely, these southern African communities engaged in reciprocal economic exchanges within and between their groups. Though evidence about economic exchanges in the region before the 1820s is sparse, Elizabeth Eldredge puts it forth that available evidence suggests that these communities “...were linked by a loose but extensive trading network [which] rested on “...a rely pattern in which articles of trade were passed from group to group...”64 Southern African communities also participated in trade with more distant communities in the region. There was trade in household utensils made from iron and copper, iron hoes, animal skins, cattle, tobacco and others. Beads were used as mediums of exchange for long distance trade. Beads were “...to be employed only as medium of trade with distant tribes, and for the purchase of more expensive articles....”65 This was because beads were “...fungible, could not easily be obtained, and could be given different values according to their size and colors...”66 In the early nineteenth century southern African, a series of prolonged and severe droughts were experienced. Combined with political, social and economic factors, droughts of the early nineteenth century contributed to the wholesale destruction of the region. These cataclysmic upheavals came to be known as the mfecane, east of the Drakensburg

61 To support this even more, look the Anti-Politics Machine by James Ferguson. 62 Unless specified, this section will be based on: Sean Maliehe, “Basotho Traders Attempts to Gain Access to, and Control Over, Local Trade in the Colonial and Immediate Post-colonial Period”, MA Dissertation, Department of Historical Studies, National University of Lesotho, May 2011. 63 For a more detailed history of pre-colonial Basotho communities, see: Tefetso Mothibe, “Early Communities of the Southern Highveld, 1500-1800”, in Neville W. Pule and Motlatsi Thabane, (eds), Essays on Aspects of the Political Economy of Lesotho 1500-2000, (Department of History, National University of Lesotho, Roma, 2002); Steven Gill, “Introduction Essay”, in D. F. Ellenberger, History of the Basuto: Ancient and Modern (Morija: Morija Museum and Archives, [1912] 1992). 64 Elizabeth A. Eldredge, A South Africa Kingdom: The Pursuit of Security in Nineteenth Century Lesotho (Cambridge: Cambridge University Press, 1993), p. 19. 65 William J. Burchell, as quoted in Elizabeth A. Eldredge, A South Africa Kingdom, p. 21. 66 Alan Smith as quoted in Elizabeth A. Eldredge, A South Africa Kingdom, p.21.


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Mountains and lifaqane, west of the Drakensburg Mountains. These wars provided conditions under which a young son of a junior Mokoteli chief of the Kuena clan, Moshoeshoe I, emerged as a provider of shelter, food and security for his emerging chiefdom, as well as, war refugees. From his home village of Menkhoane, he moved to the Butha-Buthe Mountain in search for a better fortress. However, the Butha-Buthe Mountain could not provide a secure fortress. As a result, in 1824, Moshoeshoe I moved with his people to the Thaba-Bosiu Mountain, further south into the interior. The mountain became a better fortress. It could provide security, and support people and their animals during the wars and other attacks. It was at this mountain that Moshoeshoe I started building a dominant chiefdom, which has popularly been taken to be the origins of the modern Lesotho state in the historiography of the country.67 When building his chiefdom, Moshoeshoe distributed resources to his people through socio-economic and political systems known as mafisa and bohlanka. These are systems that had existed amongst Bantu communities. Mafisa was a patronage system of cattle loaning where the recipient took care of animals loaned to them, and enjoyed usufruct. Bohlanka was also a patronage system wherein a chief assisted young men to marry by providing lobola for them. Their children and labour belonged to the chief. Lobola provided when marrying girls from such arrangements was given to the chief, not the biological parents. For production, people also engaged in communal work parties known as matsema. Matsema were mainly used to produce food for chiefs’ senior wives, orphans and refugees. These systems promoted dependence of the people on the chiefs. In 1833, Missionaries arrived in Lesotho upon Moshoeshoe’s request. These were the Paris Evangelical Missionary Society (PEMS). The PEMS missionaries came to Africa to assist the London Missionary Society (LMS) in a mission to ‘civilise’ Africans through evangelising, establishing churches and spreading Christian norms and principles. Their role also included sharing their knowledge of literacy, diplomacy, architectural techniques, agricultural developments and introduction of free trade.68 The missionaries promoted private property rights of individual Basotho producers so that they could exclusively benefit from the product of their labour and facilitated commoditisation of production. They encouraged Basotho to produce exclusively for the market. They tied the spreading of the ‘gospel’ with commerce. They highly opposed traditional socio-economic and political formations of matsema, mafisa and bohlanka and others. There is romanticisation of Lesotho’s nineteenth century social relations by Liberal and Africanist Historians. The popular narrative goes that through these traditional systems of matsema, mafisa and bohlanka, ordinary people largely benefited. However, Revisionist and Marxist historians of Lesotho have argued that if there was anything, such systems were 67 For more information on the Lifaqane wars and formation of the Basotho chiefdom under Moshoeshoe I, see; Tefetso Mothibe, “State and Society, 1824-1833”, in Neville W. Pule and Motlatsi Thabane, (eds), Essays on Aspects of the Political Economy of Lesotho 1500-2000; E. A. Eldredge, “Sources of Conflict in Southern Africa, c 1800-1830”, in C. Hamilton, (ed), The Mfecane Aftermath: Reconstructive Debates in Southern African History, (University of Natal Press, Pietermaritzburg, 1995), pp. 123-154; Peter Sanders, Moshoeshoe: Chief of the Sotho, (London: Heinemann, 1975); Leonard Thompson, Survival in Two Worlds: Moshoeshoe, 1786-1870, (Oxford: Clarendon Press, 1975). 68 Gill, A Short History of Lesotho, pp. 75-77.


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exploitative. People were obliged to participate in long and strenuous production activities, which meaningfully benefited on the chiefs, solely. Instead, perceived benefits were only incidental and episodal. What was worse for the people, there was proliferation of chiefs who acquired more and more land, which was worked by the people. Again, instead of matsema being used for social and chiefly use, as was traditionally done, the chiefs exchange produce from matsema in the markets. There were even episodes in which some people refused to participate in matsema. Some were brutally punished by some chiefs.69 The chiefs highly opposed changes that were introduced by the missionaries. Taking the nature of social relations in the nineteenth century Lesotho, we see that the missionaries’ promotion of commerce offered a means of emancipation from these oppressive systems to some people. As a result of missionary activities, some Basotho groups of individual producers emerged in, and around, mission stations. In support of this, Tefetso Mothibe and Maria Ntabeni argue that the first two decades after the arrival of missionaries was a transformational period. The period marked the beginning of a transition from traditional forms of domestic economic organisation, which were anchored on reciprocal and personal kinship relations, to those that were more individualistic and impersonal. Better trading opportunities for individual Basotho producers also came with the arrival of the Boers from the Cape in the 1840s. The Boers moved into the interior of the southern African region in a migration, popularly known in southern African historiography, as the Boer, or Great Trek. Basotho exchanged grain with them. When they arrived in the territory that belonged to Moshoeshoe I, they also opened trading stations. From that point on, to the 1880s, a number of European traders opened more trading stations in Lesotho. By the end of the nineteenth century, they had emerged as local trading giants. To strengthen their grip on local commerce, they formed Basutoland Chamber of Commerce in 1890 to collectively advance and protect their interests. Significant economic fortunes for individual Basotho producers came with industrial developments brought by the discovery of diamonds and gold in South Africa in the last half of the nineteenth century. Basotho producers intensively applied themselves to the production of grain with the sole purpose of exchanging it in South African mines and industries. It is in this context that Collin Murray called Lesotho the granary of certain parts of South Africa.70 Their success became so huge that it even worried the missionaries. They were scared that the perceived love of returns would turn Basotho away from their religious obligations and beliefs. Basotho’s fortunes came to end when demands for cheap labour in South African mines and industries increased. Basotho, who had participated in wage labour in such industries and mines, had done so discretionarily because they were self-sufficient. They could dictate terms of employment from one employer to the next. Amongst other, they demanded to be paid with guns, since the nineteenth century Lesotho was characterised by constant militant

69 For a more insightful account of the nature of social relations in nineteenth century Lesotho see; Motlatsi Thabane, “Nature of Social Relations in the Nineteenth Century Lesotho”, in 70 Collin Murray, “From Granary to Labour Reserve: An Economic History of Lesotho”, South African Labour Bulletin, 6: 4 (1980).


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conflicts. The status of Basotho being a self-sufficient and a well armed society became a problem for South African demands for cheap labour. As a result, colonial authorities took steps towards undermining Basotho’s position. Basotho resisted in a war that came to be known as the Gun War (1880-1881) in southern African historiography.71 The period after the discovery of the minerals to the early twentieth century, was a period in which colonial authorities successfully created Lesotho into a labour reserve for the emerging South African industrial economy. In their attempts, they strategically undermined Basotho’s self-sufficiency. They designed and introduced Colonial Laws in the period between 1872 and 1884. These were meant to undermine Basotho’s pre-colonial socio-economic and political formations. The colonial authorities also introduced hut tax in 1870. They insisted that tax should be paid in money, and not in-kind, as it was widely done. They insisted on that in order to create money economy, where Basotho would be forced to depend on wages from mines and industries in South Africa. In South Africa, colonial authorities introduced tariffs on Basotho’s produce in the 1890s. When the railway networks into the interior of the region were completed in 1910, they imported cheaper grain from abroad. They also officially ended sharecropping between Basotho and the Dutch settlers in 1913 by passing the Native Land Act.72 By the beginning of the twentieth, many Basotho depended on low wages that they got as cheap labourers for South African mines and industries. Some of the Basotho, who stayed in Lesotho, attempted to gain access to local trade. Their efforts failed because the colonial government in Lesotho, together with European traders, through Basutoland Chamber of Commerce, restricted Basotho license applicants by not issuing them with traders’ licences. After the introduction of Colonial Laws in 1884, in order to participate in trade, traders’ licences were required. In the first three decades of the twentieth century, only about eleven Basotho had been issued with trading licences to participate in local trade. Basotho were restricted from operating in business and government centres around the country. They were allowed to operate in the peripheries and in the remote mountain areas where business opportunities and infrastructure were less developed. In the mid-1930s, Sir Alan Pim was commission to survey the financial and economic position of the country. The Commission found that only three Basotho traders were still in operation.73 Others had failed due to financial difficulties caused by the recession of the first three decades of the twentieth century. On top of that, colonial banks refused to issue business loans to Basotho traders. Basotho traders made arrangements with European traders to solve their problems of lack of access to credit and supply of stock. In these arrangements, European traders would

71 See Basotho’s resistance in R. O. K. Ajulu, particular the Moorosi Rebellion (1879) and the Gun War (1880-84). 72 For a more insightful account, see Collin Murray’s work on the rise and fall of Lesotho’s peasant economy; “From Granary to Labour Reserve: An Economic History of Lesotho”, South African Labour Bulletin, 6: 4 (1980); Collin Murray, Families Divided: The Impact of Migrant Labour in Lesotho (Cambridge: Cambridge, 1981). 73 Financial and Economic Position of Basutoland, Report of the Commission Appointed by the Secretary of State for Dominion Affairs (London: His Majesty’s Stationery Office, 1935).


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provide them with small loans, or would give them stock on credit. Stock provided was to be repaid within a period of about seven, or fifteen days, depending on the agreement. However, due to the recession of the early twentieth century, many Basotho traders, including customers, who would be given items on credit, could not repay their debts. They earned themselves as reputation of being bad debt payers. In 1937, the colonial government officially ended these arrangements between Europeans and Basotho through the passing of the Credit Restriction Proclamation. Marginalised in colonial trade, Basotho responded through their political organisations. These were political organisations that they had formed in the early twentieth century. These were Basutoland Progressive Association (BPA), which was formed in 1907, and Lekhotla la Bafo, (LLB), literally, League, or Council of Commoners, which had been formed in 1919. With their respective approaches, these two political organisations attempted to better the conditions and fortunes of Basotho in local trade. At the beginning of the 1940s, Basotho traders formed an association of their own to advance and protect their interests. This was the Basotho Traders’ Association (BTA). Against colonial conditions and odds, efforts of BTA also had minimal impact. Towards independence, it had become moribund. Optimistic of economic opportunities that would come along with Lesotho’s political independence in 1966, Basotho traders resuscitated Basotho Traders’ Association in 1968 to organise themselves and pursue their interests. In 1969, they formed a bulk buying cooperative (known in Sesotho as Thekommoho) to buy stock directly from South African firms in order to counter European traders’ monopoly of local trade, and to finally put an end to their problems of lack of access to credit and supply of stock. The cooperative became so successful, and made such a huge impact in local trade, that it immediately threatened to throw European traders out of business. Thekommoho did not survive long. It collapsed in 1970 under complex political and economic factors. On the one hand, the newly independent government of Lesotho, which was led by the Basutoland National Party, aligned with European traders because it perceived Basotho traders as a political threat. This was because the majority of Basotho traders happened also to be members of the major opposition party, the Basutoland Congress Party. Also, some leaders of the Basotho Traders’ Association were active and influential members of the Basutoland Congress Party. On the other hand, anxious of the implications of Lesotho’s independence, European traders perceived Basotho traders as a threat to their economic dominance. As a result, the government and European traders collaborated and managed to successfully undermine Basotho traders’ organisation and other entrepreneurial initiatives.74 Consequently, into the post-colonial period, tension between Basotho traders, on the one side, and European traders and government, on the other side, persisted. The formation of LCCI brought this tension to an end. Thus, the formation of LCCI in 1976, ten years after Lesotho gained independence, has its roots in the political economy of local trade in the colonial and immediate post-colonial period. 74 Sean Maliehe, “Basotho Traders’ Struggle for Access to, and Control Over, Local Trade in Colonial and Immediate Post-colonial Lesotho, 1870-1970”, MA Dissertation, National University of Lesotho, Roma, May 2011, pp. 129-133.


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Formation of LCCI: Conflict Resolution, Unity, Transition and

Economic Development in Post-colonial Lesotho Lesotho Chamber of Commerce and Industry (LCCI) was formed in 1976, ten years after Lesotho gained political independence from Britain in 1966. It was formed in the period between February and May. It was formed as an amalgam of two major rivals, and racially separated, business associations in Lesotho. These were the Basotho Traders’ Association, which represented Basotho traders; and Lesotho Chamber of Commerce, which represented European traders. The formation of LCCI was proposed and funded by European traders, and supported by the government, as an ideal structure that would facilitate economic development in the post-colonial period. Basotho traders also responded positively, and together with European traders, took a lead in its formation. At independence, the business community consisted of Basotho traders, represented by their association called Basotho Traders’ Association; European trader who were represented by the Lesotho Chamber of Commerce; Indian traders who were represented by the Basutoland Indian Community, or what they called the Indian Mahommedan Community; and the Portuguese traders, who did not have any association of their own. These two latter groups never joined LCCI. Justifications provided in support of the formation of LCCI were that: Firstly, LCCI would be an umbrella association meant to bring all business and professional associations in Lesotho together. For developmental purposes, this would facilitate effective communication and engagement between the government and the business community, instead of these associations approaching government individually. Secondly, and linked to the first, its formation would be a panacea to the rivalry between European and Basotho traders, which had existed in the colonial and immediate post-colonial period. In its initial stages, there were minimal conflicts in the leadership of LCCI. There was a progressive spirit amongst various leaders, and in the business community, in general. However, the status of European traders as powerful business members inevitably came into conflict with that of Basotho traders. Their interests were not always aligned. On top of that, interests of European traders prevailed over those of Basotho traders. European traders continued to monopolise local business without regard to whether Basotho traders survived. For example, in the mid-1980, European traders in the Berea districts, opened more retail stores while still operating a wholesale. This was done in spite of agreements that European traders should only operate in bigger wholesale businesses. This would allow Basotho to take control of the retail business, and grow. As a result of continuing European monopoly of local trade, a group of Basotho traders within LCCI formed an alternative business association. The name of the association was the Lesotho Small Traders Association (LESTA). They formed the association with the idea of advancing their own interests, which they felt were different from those of European traders. They engaged in a bulk buying arrangement where they would buy stock together from manufacturers and wholesalers in Lesotho and South Africa. They would then share stock amongst themselves to sell at cheaper prices in their businesses. However, it did not


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survive long. It gradually collapsed when its influential leaders rolled back their roles due to other work commitments. Towards the end of the 1980s, the role of European traders steadily decreased in LCCI. There were a variety of factors to this. There were constant minor conflicts between Basotho and European traders. Those contributed to the retreat of European traders. Again, only a few European traders were left in the country after independence. Some started moving to South Africa. This came when the post-colonial government pursuit the policy of localisation after independence. The government demanded that European traders should train and employ Basotho in top positions. This did not seat well with many European traders. Thus, they took their business outside the country. Again, throughout the colonial period, and in the post-colonial period, European traders monopolised the wool and mohair, and skins and hides industry in Lesotho. In fact, in an interview with a son of one the few European families who stayed behind, he informed me that, more than anything, their parents made the bulk of their money from this industry, and not by wholesaling and retailing. After independence, the government nationalised this industry. Therefore, European traders were pushed out. As a result, others left Lesotho when the goose that laid golden eggs for them was taken away. In some case, business was taken over by their children. In such cases, these were heirs who had been educated outside the country and did not have close connections with the country and LCCI, as compared to their parents. In other cases, they totally abandoned commerce and ventured into other businesses. By the 1990s, all the way to the present, LCCI was run by Basotho business owners.

Activities and Constraints of LCCI in the Post-1990s ‘Neo-liberal’ Era

LCCI played a significant role in the design of laws, programmes, policies, national plans and consultations related to the development of local business and the general economy of the country since its formation, and, more profoundly, in the post-1990s. It also has representation in various local advisory boards. When the country adopted neo-liberal policies in the mid-1990, as seen above, LCCI was seen as an organisation that would assist in the development of local entrepreneurship. In fact, it was taken as an organ of a tripartite that consisted of LNDC and BEDCO in the development of entrepreneurship in Lesotho. Indeed, it played a critical role to that end. Though LCCI fought for it, it was even given a subvention fund to run its office and develop local business. The subvention was 20% of the license fee that were paid to the government. In the mid-1990s, LCCI, together with Women in Business Association, was tasked to administer the United Nations Industrialisation Development Organisation (UNIDO) fund meant to assist small business owners. Through the fund, business owners applied for small loans that amounted to the maximum of R6000 (ZAR). Furthermore, LCCI was given a leading role in the formation of the 1999 Trading Enterprises Regulations. They were designed in such a way that Basotho would have a better platform


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to express their entrepreneurial competencies. To this day, the 1999 Trading Enterprises Regulations have never been meaningfully implemented in such a way that Basotho business owners would benefit meaningfully. LCCI persistently advocated for the implementation of the regulations, but their efforts were blocked by the government. At the centre of their demands, they wanted Basotho to be protected against Chinese monopoly of Lesotho’s local business, which emerged in the late 1990s. They wanted Chinese business operations to be limited to big businesses. However, within a very short space of time, they had taken over the country’s local economy in urban and rural places, alike. They also run all types of businesses, including street trading wherein they secretly employ Basotho to sell certain items for them on the streets. These are items such as cell phone airtime, fruits and small clothing articles. Instead of protecting the interests of Basotho business owners, the government protected Chinese business owners, and never took any serious measures to control their activities as the law dictated. It was difficult for the government to do so because it had developed very close relations with the government of the People’s Republic of China under the South-South Co-operation and China-Africa relations. The government of Lesotho has benefited a lot from this relationship. The government of China has contributed in the development of local infrastructure, and other developments. Thus, the government of Lesotho was never in any position to meaningfully protect and support Basotho business owners’ interests. Infiltration of Chinese traders in the local economy became even more difficult for the government because many Basotho gave Chinese traders their licences and premises to operate with. Relations between the government and LCCI started getting sour. Members of LCCI went as far as petitioning and protesting against this, still their efforts were futile. Relations between LCCI and the government worsened more in the 2000s when the government attempted to tone down LCCI and control it to its advantage. Leaders of LCCI would be instructed and lured to implement demands of the government. Many of these demands were not in-line with the interests of LCCI. Interests of LCCI were rather with the majority of the struggling Basotho business owners around the country. Some leaders aligned with government’s demands, and attempted to implement them. But, other leaders blatantly refused to pursue such top-down agendas. These were only aimed at benefiting only a few business owners. The position of LCCI was that there should be a clear policy which regulates the role of government in business. In this regard, LCCI saw the role of government in business as the one where the government would work together with the business community to make the business environment more conducive for the majority of Basotho business owners though policy. Despite the way the government attempted to marginalise it, it continued to play an advisory role when various policies, studies and programmes were designed by government. The government rather attempted to support a few high ranking individual business owners. It is this sense that the ideology of LCCI differed with that of the government. The government responded by initiating and supporting the formation of an alternative business association in 2005. This was called Mohloli Business Chamber. It was formed with the aim to replace LCCI by a “bunch of progressive business people”, as one of its founding


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members, Mr Thuso Green, described its membership.75 These were mainly rich and more successful urban business owners. Mohloli crew so popular within a short space of time that many people who wanted to be rich, within a short space of time, became its members. LCCI members were marginalised in the awarding of tenders, while Mohloli’s members distributed tenders around themselves. Members and leaders of Mohloli also happened to be active members of the Lesotho Congress for Democracy (LCD), the ruling party. In social circles, it was common to hear that the ticket to individual business success was membership of both Mohloli and LCD.76 It was gossiped that possession of their membership cards would open any business doors. Mohloli did not survive long. It collapsed under serious political and economic factors, which are still not disclosed to the public. Small insights into some of their problems show that its members fought over tenders. When I got home for fieldwork, I learned that some it of its former members are demanding refunds of exorbitant membership fees that they had paid. They also want their money to be accounted for. Despite tension between LCCI, on the one hand, and Mohloli and government, on the other, LCCI continued to be engaged by government to participate in selected entrepreneurship and business related activities. This was because it was never easy for Mohloli to immediately replace LCCI. This was because LCCI had gained wide reputation of being the ‘mother’ business organisation, regionally, continently and internationally. As a result, in some initiatives under-taken in connection with other international and regional Chambers of Commerce and Industry77, the government strategically invited LCCI. When LCCI had opened certain doors for them, they dropped it along the way and continued with the project without them. There are numerous examples to support this. One can describe this phenomenon as some kind of the political economy of “engagement and disengagement”. After the collapse of Mohloli, the government, this time, with the assistance of the World Bank, established Private Sector Foundation of Lesotho (PSFL) in November 2008. To justify this, the government and the bank, alleged that private sector was fragmented, and thus, weak to drive the economy forward. As a result, an umbrella business association was required, which would be apolitical. LCCI, together with some associations, explicitly questioned the governments’ actions and intensions. Like Mohloli, PSFL came as an organisation to replace LCCI. Worse, the subvention which LCCI was receiving from the government was withdrawn with the aim to be given to PSFL. PSFL was a replica of Mohloli.

75 http://www.psc.org.ls/news/LEAP-Mohloli.php, [20 November 2013, 15: 40]. 76 Apart from insights I got from my current research work, I also know this because these were events that took place when I was in business, as a consultant. In fact, observation of this elitist and pursuit of narrow individualistic economic interests, and the consequent marginalisation of the majority of Basotho business owners, frustrated me and motivated me to abandon business and study the political economy of local business entrepreneurship. On top of that, I had got into business already as a very suspicious young man. This was because I had done my Development Studies undergraduate research project on a topic on the emergence of Chinese business owners’ monopoly of the local business in Lesotho. I had seen how the government of Lesotho protected Chinese business owners because the government benefited from China-Lesotho relations. 77 LCCI is the founding member of the Southern African Chamber of Commerce, Pan-African Chamber of Commerce and Industry, and it had pending membership with the International Chamber of Commerce. It also has connections with many other organisations.

http://www.psc.org.ls/news/LEAP-Mohloli.php


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The bulk of Mohloli’s membership transferred to PSFL. Like its predecessor, members of PSFL have been fighting about the allocation of tenders, to a point, where there are many pending cases in the high court of Lesotho against some of them. Their members have also been charged with a variety of economic crimes that range from tax non-compliance, counted in millions, bribery, corruption and others. The government, led by LCD, attempted to gain a strong control over local business because various top government officials had direct vested interests in business. Many of them were also business owners, or in partnership with some top members of the business community. Their economic and political interests feed into each other. Examples of top government officials in bed with business community members, or themselves in business, are wide spread in Lesotho. In fact, some are currently facing serious charges of corruption and embezzlement of public funds. The situation can be described as plutocratism, where establishment of business initiatives, and privatisation of former national enterprises, is only an equivalent of money laundering schemes used to covert public funds into private pockets. In describing a plutocratic system, adopted in describing the situation in Lesotho, Eugene L. Mendonsa argues that: “Persons with political power are usually either wealthy or in bed with the rich; and those with lots of money almost always try to influence those with political power”, while “[t]he majority of citizens stand on the sidelines.” As a result, he affirms that the world economies are not democratic but plutocratic, meaning “… [only] the wealthy rule.”78 In the context of the above described marginalisation, LCCI made attempts to better the fortunes of Basotho business owners. Since LCCI membership consisted mostly of retail business owners, the head office formed Quality Groupings. These were groups of ten people who pooled resources to buy together in bulk from wholesalers. Quality Groupings became successful. Their success led to secession of various members of LCCI. These were people who felt that, instead of LCCI, the groups held more future for them. As a result, tension and a gap developed between the groups and LCCI. However, they operated for a while only to collapse. In the early 2000s, members of LCCI proposed to form a bulk buying cooperative called Theko ’Moho. Particularly, this was established to counter Chinese retailers and wholesalers’ emerging conquest and monopoly local business. When the cooperative was formed, instead of being an arrangement within LCCI, which had initially been the plan, its members, the bulk of LCCI membership, ran parallel with LCCI. Tension brewed between LCCI and Theko ’Moho. It made a huge impact in local business, and became popular. It had members around the country. However, its success was never sustained. When I got for fieldwork, it only had around thirty members. Due to these internal and external factors in the post-1990s period, LCCI faced serious challenges that undermined its very own existence. It had serious internal political challenges. The bone of contentions was that some leaders attempted to politicise the association so that it could be aligned to the ruling party. Others resisted. They maintained that LCCI was an association of the majority of struggling Basotho business owners who 78 http://openanthcoop.ning.com/profiles/blogs/the-ecb-the-fed-amp-poleconomics-the-wizzards-of-oz, [29th November 2012, 18: 24].

http://openanthcoop.ning.com/profiles/blogs/the-ecb-the-fed-amp-poleconomics-the-wizzards-of-oz


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needed more support than aligning with the ruling party. Again, LCCI consisted of members from various parties. They countered that such orders attempted only to create opportunities for a few individuals at the top. These internal conflicts were used by government and elitist business circles to justify the formation of alternative business associations described above. LCCI was described as a non-progressive and petty association characterised by constant conflicts centred on personalities, and nothing else. LCCI’s membership declined significantly. Its membership declined more when some business owners in the district chambers broke away. These are business owners who questioned the concentration of business activities in Maseru, the capital, and the control of LCCI by Maseru-based business owners. They argued that LCCI was run in Maseru at the exclusion and neglect of the districts. They argued that only Maseru-based members got opportunities. They provided examples that international and local business trainings, workshops and conferences were mostly attended by Maseru-based business owners. Moreover, they also provided that LCCI was mostly nominated Maseru-based business owners to represent LCCI in various advisory boards. Membership to these boards came with varying benefits. Consequently, a number of alternative district based associations were formed. These took away LCCI membership. They attempted to make connections with the government, and some top government officials, to better their fortunes in local business. However, they were oblivious of the wider implications of their decisions, namely that, in the long run, they were contributing to an economy that undermined collective interests. When I got to some districts, I found existence of some localised business circles and elites, while the majority continued to struggle in the peripheries, and on the streets. These localised business circles played to the advantage of governments elites in their pursuits of narrow interests. The point remains, these groups had valid reasons. But, those were problems that could have been resolved internally, in LCCI. A point to make clearer is that, indeed they are aware of their immediate needs and interests. However, they were oblivious of narrow individualistic economic pursuits that the government was creating. In the Human Economy Manifesto, Keith Hart, supports that “... the human economy approach must somehow bridge the gap between [immediate needs and interests] and a world driven by forces [that people] cannot know.”79 It is important to emphasise that critics levels toward LCCI were not only provided by district members. Even Maseru-based members had similar concerns. However, their major problem had to do with lack of continuous and transparent flow of information regarding activities of LCCI. Based on constitutional guides, they argue that quarterly meetings should be held. This has not been the case in a long time. The current leadership argues that due to financial problems that LCCI is going through, it is difficult to carry out certain mandates of LCCI. Lack of clear information has also lead to suspicions, gossips, speculations, accusations and withdrawal of some members in the activities of the association. Despite that, what has held LCCI together, has been decisions made by its leadership to work towards making LCCI independent, financially. As compared to many associations,

79 http://thememorybank.co.uk.



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which depend on donations and membership fees only, this has been crucial for LCCI in carrying out its advocacy mission. This has been the case because the government uses resources to reward those that follow in their dictates, and sanction those that do not conform. In the post-1990s period, when many public enterprises were being nationalised, LCCI fought for, and bought, Security Lesotho. With revenues generated in this security company, it supports it activities and the running of the head office. However, members complain that the security company is mismanaged; run like a personal property of LCCI leaders; and members do not even get reports on its operations. LCCI has also formed LCCI Investment Holdings. Through this company, LCCI has bought shares in some big local business establishments. With the assistance of Alliance Insurance and Lesotho Steel Products, LCCI has also built a big business complex. This is where the head office is now located in Maseru. Rent from this office complex is used to repay developers, and part of it, contributes towards the running of the office and supporting its activities. The major forthcoming project is aimed at reconstructing and strengthening district chambers. It also has some sites which it is planning to develop in the future. Thus, financial independence of LCCI has been important to its mission of advocacy. It has helped it to be open, blatant and frank with its criticism towards a narrow individualistic economy that the government has been creating. When I got Lesotho for fieldwork, the new government, which was formed in 2012, has been attempting to reconstruct Lesotho’s economy, after the ruinous effects of the previous government regime. However, in their attempts, they inherited institutions that the previous government had formed, notably the Business Council. However, LCCI refused to participate in the Business Council. The leadership argued that it would not be part of the Business Council because it had refused to participate in the Council when it was formed. LCCI refused to be part of such an institution because they promoted governmental dictatorship of the business community. In their view, the institution undermines democracy and pursuits of collective interests. In the view of LCCI, a business forum, not another layer of a bureaucratic institution, headed by the Prime Minister, would be ideal for business development for the majority of the people. A business forum where representatives of government and the business community would meet to discuss business matters would ensure business develop and provide conducive democratic conditions for government and business community dialog and engagement. Simply put, in view of LCCI, such a business forum would ensure meaningful public-private sector partnership.

The Role and Challenges of Smaller Business Associations: Affiliate Members and Other Smaller Business Sectoral Associations in Lesotho

Though LCCI as the central and advocacy body attempted to play a more direct role in the development of local business, the bulk of the work rests more on smaller business associations. These deal with their respective sectoral business issues. These are Affiliate Members of LCCI. I also went outside the membership of LCCI. There are associations of farmers, street traders, liquor and restaurant owners, manufacturers, transport operators, exporters’ associations, and others, which have been formed to advance interests of their


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members. They attempt to address policy matters and legal constraints that affect their various business sectors. They pool resources to solve their problems of lack of access to capital. Some form stock vels and other fund raising activities to generate money to support and grow their businesses. Members of these associations depend on each other, informally and formally, to share information and skills. They organise workshops to gain knowledge on certain business matters. They do this alone, and in some cases, in collaboration with international organisation and government of Lesotho. Some have even gone as far as forming burial schemes, house-hold groceries sharing schemes, and funds schemes that are used to secure specialised services such as those of lawyers and accountants. However, they have a number of challenges internally, and, externally induced. There are internal leadership conflicts, challenges of lack of adequate finance, issues of personalities, divergences in approaches to common interests, internal competing hegemonic circles, desire by ruling parties to control them, lack of meaningful say and participation in government related consultations, and many others. These associations are characterised by a few individuals who hold on to leadership positions over a long period of time. Typically, these are people who were instrumental in the formation and activities of these associations. In many case, these figures, or their names, become synonymous with those of their associations. Their respective approaches are also aligned with the character of their individual leaders. The minute such figure step down, or roll back their role, such associations become moribund. At times, conflicts emerge when some members challenge leaders’ hegemony. It is common to find small hegemonic groups surrounding certain influential leaders, members. Commonly, and persistently, instead of dealing with internal problems, the trend is towards replacing leaders, only for the new leadership to replicate the previous leadership shortcomings. The process goes on and on like that. The post-1990s has also been a period of persistent rise and fall of smaller business associations. The government, together with their international supporters, used this to justify the formation of alternative umbrella business associations it formed, as seen above. They argued that private sector was fragmented, weak and consists of non-progressive people with petty issues. They also argued that Basotho business owners do not have a spirit of co-operation. Despite all their challenges and continuous rise and fall, these associations play a critical role for collective and individual members. And, many have contributed significantly towards changing certain laws and policies related to business in Lesotho. Importantly, a profound increase in the formation of these associations has been a post-1990s phenomenon. These are associations which were formed by business owners who were not satisfied with poor conditions and marginalisation in their respective sectors. It emerges that, their proliferation correlates with the adoption of neo-liberal policies in Lesotho. As such, their proliferation is a counter movement to the ruinous impact of neo-liberalism in Lesotho.

Individual Business Owners: Ordinary, Associate Members


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and their Equivalent in Local Business

Though LCCI and various sectoral business associations have played an important role in the development of local business and entrepreneurship, the day-to-day challenges of running businesses lay squarely on individual business owner. These business owners operate as sole proprieties, or in partnership. In Lesotho, they operate in small to medium businesses. They are marginal in the economy. These are businesses that typically employ between one and fifty people. The majority of Basotho business owners operate in this category. However, there are those Basotho business owners who have gone beyond this level. A more detailed description has been provided previously. Currently, I have conducted interviews in five districts investigating ways in which they, individually – meaning outside associations – attempt to stay in business in spite of challenges they face. I have interviewed people who started their businesses in the 1980s, 90s and 2000s. So far, I have only one who started his business operations in 1950. Again, some had a longer family business history. I am left with five districts of Lesotho. These are more remote districts of the country. Their major economic activities centre on subsistence crop production and livestock farming. In these districts, I am going to focus my attention on producers who have attempted to commercialise their production, as well as, businesses related to agriculture, such as, sale of farms feeds, animal medicines, cultivation implements and others. The most lucrative commercial activity in these areas is production and sale of wool and mohair. Evidence from Basotho business owners that I have interviewed, so far, demonstrates that they use resources at their disposal to start and support their businesses. The majority of these people had little formal education. They used their live experiences and shared knowledge to drive their businesses. They use family labour. They use family and personal finances to support their businesses. For many of them, a business is something to make a living with, instead of it being a separate entity. Their businesses are used to support their families, built houses and business premises because they have nowhere to turn to. Some of their most cherished achievements are sending their children to good schools. Some are even able to send their children to better schools in South Africa. For them, what is most important and comforting is what they are able to achieve with their businesses. But, they are also very keen on growing and expanding their businesses. Most of them are people who came into business after years of employment, locally and from outside the country. These are people who used their retirement and life savings to start their businesses. Some started their businesses by selling in the streets. They then worked their way to formal businesses. Mostly, they struggled to get business loans. In cases where some got loans from commercial banks, it would usually be after a long struggle. In one interview, a certain business owner informed me of how he undermined banking procedures to get a loan. His narrative goes that, when he had started his business with his retirement package in 1990, he soon realised that he needed more funding to support this business. He had learnt from the people, and banks themselves, that in order to secure a loan from the banks, one had to continuous build a saving relationship, or record, with the banks. So,


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when the banks realised that one saves their money with them consistently, then banks would trust them, and thus, give them a loan. To build a ‘relationship’ with the bank, he would take R2000 (ZAR) from this business and deposit into his bank account. Within a very short space of time, then he would withdraw the money and then deposit the same money again. He did that continuously for some time. After that, he then borrowed money from the bank. He told me that the bank workers were so impressed with his bank record that they never wasted any time in providing him with a business loan. Apart from personal moneys and occasional bank loans, some use informal credit institutions to support their businesses. These are popularly known as loan shacks, or machonisa, in Sesotho. Loan shacks are people who informally lent out money to people. Though loan shacks demand higher interests, some business owners continue to use them because they do not have stringent requirements and conditions. They offer means of quick relief during pressing and hard times. They mostly depend on trust derived from people’s networks. To stay in business, they also diversify their business activities. It is common to find people who own buses, small shopping complexes, animals, guest houses, and houses-to-let (malaene), all at the same time, or a combination of these. There is also evidence of people who take some of the items that they sell in their formal business and sell them on the streets. They do these to realise better profits and avoid taxes. They feel that tax is only collected to kill their businesses. Others buy cheap clothing items from Durban, Cape Town and Johannesburg, and sell them informally on the streets and in the villages. They employ young Basotho to sell such items for them. However, this has created dissatisfaction amongst more marginal street sellers. They feel that they are the ones who should use such space to operate in, instead of having to face stiff competition from more established business owners. They argue that such business owners do not fall in the category of street traders called baitsokoli – literally, those that struggle. Importantly, women appear to be more active in the day-to-day running of businesses. And in cases where businesses were started by their husbands, one would find that women are more active in the day-to-day operations of the business. To support this even more firmly, when I got home for fieldwork, the largest and most influential business association, on the grassroots, and arguably in the history of the country, is Lesotho Women’s Federation, which was formed in 2012. It has about 10 000 active members around the country. Women are more connected socially to support their business through a system known in Sesotho as ho chaellana and stock vels. They usually form small and localised networks, typically consisting of friends and few business owners. Through these informal groups, they all contribute a certain agreed upon amount of money, and give it to one member to support their business. The money circulates monthly around members of the group. However, they still face challenges wherein some people cannot support the system for long. Usually, such members are given a number of chances, and time, to keep up with the group. In cases where everything attempted to assist someone fails, such people are put aside, until such a time that they participate again. Some men are part of these groups, but, evidence of my research demonstrates that women are more active in arrangement such as these than men are.


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Conclusion

Since Lesotho’s independence, Basotho business owners have attempted to play a significant role in Lesotho’s economy, individually and collectively. However, their attempts have been blocked by governments who protect interests of a few business elites and foreign business investors. The situation got worse in the post-1990s period when the government of Lesotho adopted neo-liberal economic policies. Former national enterprises and public services were privatised. Instead of opportunities being opened to the majority of the local business community, such opportunities were directed towards elitist business circles. Top government officials also directly participated in business. In the process, the majority of the Basotho business owners were marginalised in the economy. In the process, the majority of Basotho business owners and their various associations were described as non-progressive, lacked business acumen, entrepreneurial spirit, entrepreneurial skills and spirit of co-operation. However, this has only been a shallow and inaccurate analysis meant to justify the pursuit of narrow individualistic economic interests. It is important to underscore that there were certain benefits that some Basotho business owners got. However, such benefits were only incidental and episodal. In cases where governments invited Basotho business owners to participate in certain business and entrepreneurship initiatives, they only do so to their advantage. As a result, the majority of Basotho business owners had to, individually and collectively, find ways to stay in business, and succeed. Largely, they were able to better their fortunes, individually and collectively, through improvisation, economisation and adaptation in the context of unfavourable conditions in the economy. This hidden narrative of what they have been doing for themselves provided by the study is important to fully understand the conditions and dynamics of local business and entrepreneurship. Their persistent struggle through improvisation, economisation and adaptation are anchored on deeper humane principles and considerations. They are not only driven by narrow individualistic rational economic choices. Their economic motivations are plural. They are characterised by solidarity, loyalty, trust, friendship, compassion, religious beliefs, good will, political considerations, reciprocity and others. They provide more humane ways in which resources can be shared by, and distributed amongst, the people, equitably. This is something which neo-liberal economic policies fail to do. They only enrich a few people at the top, and marginalise the majority, thus, creating ever widening inequality. Therefore, the study has provided lessons which can be helpful to reconsider economic distribution policies in Lesotho in order to cultivate fertile conditions for economic democracy. They offer people’s persistence, potential and power to push current frontiers to attain more meaningful ways in which the majority of the people can have a say and participation. Lessons derived from what people have been doing for themselves are important because they illuminated a sense of individual and collective independence. This allows them to dictate terms of engagement, or to withhold their participation in matters which do not benefit them. It is popular to find Basotho business owners who tell you that the


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government never did anything for them. In fact, they will tell you that, governments and politicians are all the same. They pride themselves that they had to do everything for themselves. Apart from open protests, which illuminate a sense of entitlement and hold the government accountable, many Basotho business owners’ sense of individual and collective struggle illuminates a hidden and silent resistance. In fact, ordinary Basotho business owners have demonstrated more persistence in local business than many members of elitist business circles. Even in terms of associations, LCCI has demonstrated more persistence than Mohloli and PSFL. For many members of elitist business circles, their fortunes decline, or come to an end when government changes. This is because nobody in inside the government is able to assist them. Their opportunities further diminish as new regimes sanctions, or chase after them. On the other hand, many Basotho business owners have created economic conditions that they have adapted to, and thus, content with. They do not have close patron client relations with ruling governments. By this virtue, their freedom of individual choices, speech and freedom are not compromised. Again, they do not have comparatively big scandals that undermine their legitimacy as compared to many members of elitist business circles – which are devoid of economic morality and ethics. In this sense, conditions for economic democracy can be cultivated. This helps them to move in between their impersonal (Business owner) and personal (human being) existence favourably.

phd work-in-progress report presented at thesis · pdf filephd work-in-progress report...

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