business

June 21, 2022

NEO SENOKO

2 min read

Beware of self-serving politicians – Mphaka

Beware of self-serving politicians – Mphaka

Local chartered accountant and economic analyst, Sam Mphaka

Story highlights

  • New CBL governor faces interference
  • Many state-owned entities are characterised by bureaucracy

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THE newly appointed governor of the Central Bank of Lesotho (CBL), Dr Maluke Letete should develop wisdom in handling politicians and ensuring that there is no interference in carrying out the bank’s mandate, says legendary chartered accountant and analyst, Sam Mphaka.

He said Dr Letete would encounter many challenges along the way – including favoritism, nepotism, inefficiency, interference - from the powers that be.

“There’s no question he will encounter problems doing his job,” Mr Mphaka told Maseru Metro in an interview.

He said one of the major challenges facing parastatals was the politicisation of the work environment.

 “As a result, many state-owned entities are characterised by bureaucracy,” he said. “The CBL is no exception to such impediments and lack political will.”

He warned the new governor to remain vigilant when working with politicians, adding he should ensure that they did not interfere with the bank’s monetary policy mandate.

Following the departure of former governor, Dr Retšelisitsoe Matlanyane whose tenure ended in January, Dr Letete was appointed as the new head of the bank with effect from June 1.

The newly appointed deputy governor, Lehlomela Mohapi acted in this position after Dr Matlanyane left office.  

Mr Mphaka further advised Dr Letete to grow a thick skin, warning him to always make the right choices and persuade government to offload the CBL by establishing relevant specialised regulatory bodies in the financial market.

“This will facilitate prompt response to the emerging market opportunities in the financial sector,” he said. “Otherwise, it will perpetuate the current business stalemate and retardation of the financial industry.”

Mr Mphaka said another notable challenge Dr Letete would face was the workload the CBL was having with various responsibilities, which had gradually increased.

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“The CBL’s mandate has expanded a lot only to render it inefficient,” he said.  “For example, the bank does not only regulate the banking industry, but it also regulates a whole range of other activities in the financial spectrum such as micro finance, insurances, stock market, dealership, and brokerage and asset management. It has also become the regulator of the communication sector in relation to mobile money.”

He said some of these activities were highly specialised, complex and rapidly developing and evolving such that the central bank could not cope.

“In fact, due to the broadness of its scope of work and complexities surrounding the various specialised areas, the CBL has become an obstacle to progress and innovation,” said Mr Mphaka.

Dr Letete holds a Doctor of Philosophy (Phd) in Economic Science, Financial Economics, Political Economy and Institutional Economics from the University of Cape Town.

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