The Lesotho economy is experiencing a downturn of economic growth, high unemployment and poverty, and fiscal and balance-of-payments pressures. The size of the proposed fiscal adjustment is adequate because it focuses on improvement in the external current account balance and the maintenance of gross international reserves. The current monetary arrangement with South Africa has served Lesotho well. The efforts of the central bank to reduce the wide interest rate spreads, encourage financial intermediation, mobilize domestic savings, and reduce capital flight have been commended.
This paper assesses Lesotho’s Fourth Review Under the Poverty Reduction and Growth Facility Arrangement and Request for Waiver of Performance Criteria. Lesotho’s economic program was broadly on track through December 2002, but large fiscal slippages emerged by end-March 2003. IMF staff welcomes the government’s strong commitment to its economic program and recommends completion of the fourth review. It supports a waiver for the nonobserved quantitative performance criterion because of the actions taken by the government to reduce nonessential spending in 2002/03 and because of its commitment to implement sustainable fiscal policies in the medium term.
The authorities reiterated their firm commitment to the policies and objectives outlined in the May 17, 2010 Memorandum of Economic and Financial Policies. They are committed to a reduction in other primary spending by 2 percentage points of GDP. With the medium-term outlook broadly unchanged, the policy discussions focused on the FY2011–12 budget and the authorities’ structural reform agenda. Revenues are projected to fall in 2011–12, reflecting the disappearance of exceptional receipts in 2010–11. On the spending side, the authorities are facing a number of additional commitments—some of which are of a temporary nature.
The Kingdom of Lesotho’s 2005 Article IV Consultation reports that the government’s fiscal position and the external current account have improved markedly. The authorities are preparing an action plan, in collaboration with development partners, to improve the business climate. Critical measures aim to increase labor productivity through training, reduce domestic costs for the private sector by addressing infrastructure bottlenecks, remove regulatory and administrative impediments, improve access to financial services, and promote product and export market diversification.
This paper reviews Lesotho’s Poverty Reduction Strategy Paper (PRSP) Status Report. The main activities undertaken between July 2003 and June 2004 included a costing exercise that analyzed all of the proposed activities under each PRSP strategy and compiled indicative cost estimates. An updated assessment of the aggregate resource envelope was done based on the medium-term fiscal strategy 2004/05–2006/07. A prioritization exercise was designed to identify core activities to be included in the PRSP on the basis of their expected contribution to the national development objectives.
This paper examines Lesotho’s Poverty Reduction Strategy Paper (PRSP) Progress Report for the period between January and December 2002. The achievements demonstrate that the government of Lesotho has reaffirmed its commitment to a highly participatory approach and process of preparing a community-driven and country-owned national strategy to fight poverty. The effort to measure poverty at the national level, through the National Human Development Index and the Core Welfare Indicator Survey dovetailed with the Household Budget Survey, is progressing well with completion of the latter foreseen by May 2003.
This Joint Staff Assessment reviews the Poverty Reduction Strategy Paper (PRSP) Status Report for Lesotho. The report states that the authorities are in the final stages of completing the PRSP and expect to submit it to the Cabinet for approval by mid-October and to the Bank and the IMF by mid-November 2004. Consultations with community-based working and thematic groups were concluded by mid-2003. Subsequently, the authorities carried out detailed exercises regarding costing, development of performance indicators, and document preparation.
This Joint Staff Assessment examines the Poverty Reduction Strategy Paper (PRSP) Progress Report for Lesotho. Poverty monitoring and the medium-term macroeconomic framework are areas in which the government has made considerable progress. The government has taken a number of steps to ensure that the PRSP will be completed and presented to the IMF and World Bank by November 2003. The report indicates that the government and participating donors have guaranteed sufficient funds to complete the PRSP.
Lesotho’s National Strategic Development Plan (NSDP) serves as an implementation strategy for the national vision. It recognizes the significant challenges Lesotho faces in reducing poverty and making growth more broad-based. Overall, it presents a coherent analysis and offers an appropriate path forward to sustained poverty reduction and sustainable economic growth. Executive Directors find that a well-designed implementation and monitoring framework is necessary. Implementation of the NSDP will be a key challenge.
The Kingdom of Lesotho’s Poverty Reduction Strategy Paper reports that consistent implementation of sound macroeconomic policies is critical to the attainment of poverty reduction objectives. At the central level, the authorities established sector working groups to facilitate the formulation of informed policies that respond to the identified priorities. To deal with cross-cutting issues, thematic groups have been established. The private sector, despite weak organizational capacity at the beginning, made a significant contribution to the preparation of the Poverty Reduction Strategy.