By Poloko Mokhele
The feud between used motor car dealers and the ministry of trade and industry over the business licensing and registration regulations this week took a new twist after the Import Car Dealers Association of Lesotho (ICDAL) threatened to abandon the business and leave Lesotho.
The association is made up predominantly of businessmen of Middle East origin, who operate pre-owned import car dealerships in the country.
Their threat to abandon the trade stems from a recent announcement of license fees hike and tightening of regulations regarding the business with trade and industry minister Thabiso Molapo thrown into fierce criticism.
Molapo announced a steep increase in car dealership licenses fees which have received a major backlash from the motor dealers.
In the new developments, the licensing fee is now set at M150 000 from M600 for large enterprises and is expected to be renewed twice a year to pit at M300 000. That has attracted heated criticism from the dealers who describe the hike as too high and clouded with strict conditions.
This after the license fee regulations being published in August 2020 and then amended in September 2021.
During a recent media briefing, Molapo cited the reason for a hike in fee charges as a desperate measure of protecting the country against money laundering and financing of terrorism activities.
He minced no words as he proclaimed that car dealerships have been identified as an attraction for money laundering and sponsorship for terrorism financing acts by the Eastern and Southern African Anti-Money Laundering group (ESAAMLG).
“Lesotho is a member ESAAMLG of and it has an obligation to combat money laundering and terrorist financing activities in the country. The ministry of trade and industry is responsible for monitoring this industry to combat activities of money laundering and terrorist financing. Monitoring of this nature requires intensive surveillance and inspections and as such costly,” he said.
Molapo indicated that the ministry invited those who were complaining and associations of used car importers for talks and they agreed that the fees be raised to M150 000 and in consideration, the ministry revised the conditions and an amendment to the 2020 regulations was published in September 2021.
However, irritated by the rise in fee charges, representatives of ICDAL who spoke to THEREPORTER this week have described the minister’s statement linking them to money laundering and financing terrorism as “unfortunate and unsettling” as it promotes hatred and negative perceptions against them.
“The minister’s statement linking us to terrorism amounts to stigmatisation. We are deeply worried that we might become persona non grata and be unfairly targeted as a result of the statement that even lacks evidence. Our safety and welfare are at stake here,” they complained.
The ICDAL members also stated boldly that they are ready to leave the country and move their businesses to other countries should the fight between them and the ministry escalate.
“If the honourable minister does not want us in this market of Lesotho, we have no problem or objection to that. If only he can give us a grace period of minimum three years, to wrap up and move to other countries as we have realised that the honourable minister does not need our investment, we have no other option but to leave,” they cried out.
In addition, the association is perturbed that Molapo also remarked that the high fees are also meant to control and minimise the emissions of more carbon in the air.
Molapo had indicated: “We have learned of studies indicating that used vehicles emit more carbon than new vehicles. Therefore, steps must be taken to control and minimise the emissions for our benefit and for the benefit of the coming generations so that we can leave them a healthy environment.”
But the dealers were not impressed, warning such a hike would force a rise in car sales and other costs.
“We are already affected by Covid-19 and we doubt that our customers are ready to for out M50 000 to purchase a car that used to cost M27 000. Why not close the whole importation of cars, rather than increase the fees?” they asked rhetorically.
