Sekhametsi Investment Consortium Celebrates 20 years of building investments in Lesotho

Writes Manyathela Kheleli

Abstract: African proverbs have been credited with the adage that says; “If you want to go fast, go alone. If you want to go far, go together.” It is a loaded statement, but a fitting tribute to describe the journey of Sekhametsi Investment Consortium (SMIC), a 100% Basotho investment company that has defied all odds to grow steadily into a model investment powerhouse over the last two decades. From very humble beginnings back in 1999, Sekhametsi was founded by the pioneering efforts of Dr. Mphu Ramatlapeng, Nchafatso Sello, Malefane Monnapula, Palo Kotelo, Matjato Moteane, George Kou, Makhotso Molefe and the first cohort of 17 other members who bought into the idea of forming an investment consortium of its kind in Lesotho. Fast forward to 2020, Sekhametsi has hit the M1.2 billion mark in value, with interests in telecommunications, real estate, financial services and manufacturing.

 It has long been the desire and vision for Lesotho to develop and grow its private sector as the main economic driver. It is therefore fitting to say the fruits are beginning to ripen, and indeed, a highly commendable and promising yield of very high quality fruits. The main catalyst behind the birth of Sekhametsi was the privatisation drive initiated by the government of Lesotho in the 1990s, where government embarked in a project to sell off its stake in many state-owned enterprises as part of the structural adjustment programme supported by the World Bank. Amongst others, the privatization drive was intended to phase out government subsidies and government control of commercial enterprises with the aim to broaden direct public participation in the economy. However, a lot of these enterprises were predominantly bought by foreign investors, as many Basotho were unable to raise capital to buy stakes in these companies. Sekhametsi therefore came into being in a spirited response for Basotho to be part of the economic transformation taking place at the time.

After cobbling together the initial group of about 30 local investors who raised the initial M3 Million, Sekhametsi was successful in its bid to purchase the government stake at Vodacom Lesotho. The consortium was successful in its bid for the initial 12%, then valued at M5.4 million. The bid also provided an option to increase the stake by another 8% for the selected winner to own a full 20% on offer over time. The Sekhametsi shareholder base at the time was composed of farmers, pensioners, corporate managers, religious groups, investment clubs and societies, who started the consortium at a share price valued at M34.00.

Sekhametsi’s founding director and coordinator, Mr. Matjato Moteane says the founding members drew the inspiration to mobilise the formation of a fully owned Basotho investment house out of their common passion to explore how Basotho can take a meaningful role to become active players in the economy. In the journey of building Sekhametsi, as we know it today, one of the major challenges was to confront and overcome the notion that for Basotho, working together as a collective does not work, especially where money and investments are involved.

The acquisition of the Vodacom stake was indeed a turning point in the fortunes of Sekhametsi that was to become a springboard for a bright future for SMIC. At the time, Vodacom was still a budding mobile network operator servicing about 19,000 subscribers. Today, Vodacom is a M5billion telecommunications giant with 1.6 million subscribers. Through solicitation and lobbying, Sekhametsi has grown over time, both in membership and size of investments. To date, SMIC has about 500 members and a portfolio of investments valued at M1.2 billion. A remarkable feat built through overcoming insurmountable challenges, a sound investment discipline, delayed gratification and solid governance.

The Vodacom stake is essentially what makes Sekhametsi Investment Consortium. Having grown from the initial 12% at inception and acquiring a further 8% in 2012 the 20% stake in the telecommunications company accounts for 72% of SMIC value. About 81% of the Sekhametsi’s revenues also come from the mobile operator. The stake also enabled Sekhametsi to acquire the chairmanship status in the Vodacom Lesotho board of directors, currently occupied by Mr. Leboela Lebete, who is also the current chairman of the consortium. In typical investment promotion trajectory, Sekhametsi also reviewed its growth strategy and diversification to cover the concentration risk on only one sector of the economy. Based on a prudent, but risk averse investment approach, the initial strategy was to consider minority stakes in other sectors of the economy to gradually grow and diversify its portfolio.

In 2010 the consortium ventured into the financial sector with a stake of 25% in Stanlib Lesotho, an asset management company currently holding a portfolio of about M4billion in assets under its wing. The shares were bought at a time when Stanlib was new into the country and had no local presence. Sekhametsi also has a stake in Letshego Financial Services, a micro financing institution that provides appropriate and accessible consumer microfinance and savings solutions to the financially under-served sections of the population.

Sekhametsi has also invested considerably in real estate, where the approach is to invest in high-value strategic commercial, industrial and mixed-use property acquisitions with attractive future growth potential and rental income. The company has acquired blue-chip tenants at its properties. The current portfolio of property is comprised of prime and iconic properties in the Maseru CBD. One such property is the Sekhametsi Place, formerly Agric Bank, the property was acquired in 2017 and is the headquarters of FNB Lesotho. Currently undergoing refurbishments in a staged approach, the property is billed to become a thirteen storey high-rise building that will be a prominent feature of Maseru city’s urban skyline.

Another property in Sekhametsi’s real estate portfolio is Vodacom Park housing the headquarters of its biggest investment. The three-storey 3 631 m2 building is a modern, green building design that features more than 25% electricity generation, solar screening and passive cooling system valued at M80 million.  The building was constructed and handed over to Vodacom Lesotho in 2017.

The consortium also bought a significant stake in Moruo Property Development, where it is a major shareholder in a company that owns Pioneer Mall. The Mall has transformed the purchase experience of Basotho and opened up untapped revenue streams in the commercial property space.

In 2020, Sekhametsi ventured into uncharted territories with an investment in the textile sector. The consortium acquired a 30% stake valued at M10 million at Afri-Expo, one of Lesotho’s only two of the 40 textile factories in the country. The textile industry is central to Lesotho’s economy and remains the largest private sector employer with 45,000 workers. Afri-Expo is a cut, trim and make business that currently employs 600 workers with a monthly production of 10,000 units. The acquisition of Afri Expo bodes well with Sekhametsi’s growth strategy in a company that has massive potential to increase production and create jobs for Basotho.

Looking into the future, the consortium aspires to continue to create value for its stakeholders, largely through investing for dividend income and for capital appreciation (growth of share price). It is the intention of Sekhametsi to list on the Maseru Securities Market to widen investment opportunities for more Basotho to deepen its impact. Looking at the horizon, SMIC’s bold ambition to grow its market capitalization up to M5 billion by 2026 is attainable.

Sekhametsi is looking at further diversification into technology, financial services, manufacturing, pharmaceuticals and the agro industry. The consortium also envisions to increase its reach and focus on youth, where it has demonstrated appetite to offer as much as 20% of its shareholding to the youth, who are currently grappling with high unemployment, but with massive potential to become the game changers in Lesotho’s economy.

On the corporate responsibility front, Sekhametsi has also made commendable strides to uplift communities and raise the livelihoods of Basotho. At the outset, SMIC has committed to investing 1% of its profits into social responsibility projects geared towards youth development, women empowerment and for people with disabilities. To that end, the consortium established the Sekhametsi Development Trust as an independent social and corporate investment wing of SMIC. Amongst a sizeable number of initiatives that the Trust has implemented to date include an electric kiln for pottery projects at Morija Museum. The trust has also contributed in the establishment of Kick4life’s No.7 restaurant, a social enterprise that also trains youth on culinary skills. With the recent challenges brought about by the spread of the Covid-19 pandemic, Sekhametsi has assisted the nursing association and police with PPE.

Sekhametsi Development Trust has also set aside a M1million fund for youth ventures in the agricultural sector as a way to build youth entrepreneurship and also to address the challenges of food security in the country.

Looking back in the 20 years of building a shared vision for its members, Sekhametsi Investment Consortium has certainly triumphed against all odds to become what it is today. Currently reinventing itself for a better future and with an ambitious forecast to grow its market capitalization up to M5 billion by 2026, it is reasonable to conclude that SMIC is a torchbearer that carries the hopes of the Basotho nation. In particular, the Sekhametsi Investment Consortium model has demonstrated that Basotho are a capable society that can work together and build a common vision for the prosperity of their country. As the saying goes, unity is strength, Sekhametsi is a beacon to demonstrate the potential that awaits Basotho if they are willing to work together.