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Business and Economics > Public Finance

You are looking at 1 - 10 of 54 items for :

  • Type: Journal Issue x
  • Lesotho, Kingdom of x
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Cover IMF Staff Country Reports
Kingdom of Lesotho: 2024 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Kingdom of Lesotho
International Monetary Fund. African Dept.
The 2024 Article IV Consultation discusses that Lesotho’s gross domestic product growth has improved modestly, picking up to 2.2 percent in the fiscal year ending in March 2024. Inflation increased in the second half of 2023, peaking at 8.2 percent in January 2024. However, upward pressures have eased, and inflation has since fallen to 6.5 percent in June. The outlook for Lesotho’s fiscal and external balances has improved significantly owing to windfall transfers from the Southern African Customs Union and renegotiated water royalties. Key recommendations include swiftly establishing a well-governed savings framework (stabilization fund) to ensure that additional revenues are saved wisely and spent strategically, in line with the authorities’ national development goals. To this end, the authorities are encouraged to prioritize high-quality public investment, strengthen internal controls to ensure transparency and accountability, and address governance and corruption vulnerabilities. Accompanying recommendations include: enhancing public financial management, improving the business environment, and increasing financial inclusion.
Keywords:
growth outlook; Act amendment; revenue services Lesotho; headline inflation; quarterly NA; tax administration bill; bridge policy coordination gap; Debt sustainability analysis; Africa; Southern Africa; Global
Cover IMF Staff Country Reports
Kingdom of Lesotho: 2023 Article IV Consultation-Press Release; and Staff Report
International Monetary Fund. African Dept.
The 2023 Article IV Consultation discusses that Lesotho’s economy continues to face a number of challenges in the wake of the pandemic. Climate shocks, delays to infrastructure projects, high food and fuel prices, declining diamond prices, layoffs in the textiles sector, and weak regional and external demand are weighing on activity. The government is prioritizing fiscal consolidation on the back of windfall transfers from the Southern African Customs Union, which have helped alleviate near-term pressures on financing and reserves. Alongside, broad-ranging structural reforms will be vital for the economy to transition to durable, resilient, inclusive, job-rich, and sustainable private sector-led growth. The IMF Staff strongly encourages efforts to improve the business environment, strengthen financial stability, and enhance business lending. The Staff strongly encourages the authorities to continue their efforts to increase capacity, improve data quality, and coordinate closely on macroeconomic policies. High data quality and information sharing are critical for policymaking—from measuring economic performance to forecasting.
Keywords:
exports threshold; CBL approval; IMF CD; SACU windfall; government finance; policy rate change; Debt sustainability analysis; Africa; Global; Southern Africa
Cover IMF Staff Country Reports
Kingdom of Lesotho: Selected Issues
International Monetary Fund. African Dept.
This Selected Issues paper focuses on decomposing the public-private sector wage differential in Lesotho. Lesotho’s public wage bill is significantly higher than in other countries in the region. This paper takes a closer look at the civil service wage bill and examines public sector wage premium. It provides an overview of public sector employment and compensation, estimates, explores drivers of the wage premium between the public and private sectors, and conducts a decomposition of the public-private wage gap. The upward inertia in the public wage bill has been gradually crowding out all other government spending. Containing the wage bill is essential to ensure fiscal sustainability and improve income distribution. The upward inertia in the public wage bill has been gradually crowding out all other government spending. Containing the wage bill is essential to ensure fiscal sustainability and improve income distribution. Public sector employment should be reduced and managed using a combination of essential hiring, natural attrition, and staff redeployment.
Keywords:
wage distribution; wage premium; D. policy implication; private sector development; wage bill; Wages; Public sector wages; Government wage bill; Public sector; Civil service; Africa; Sub-Saharan Africa; Southern Africa; Global
Cover IMF Staff Country Reports
Kingdom of Lesotho: Selected Issues
International Monetary Fund. African Dept.
Selected Issues
Keywords:
SACU transfer; tertiary education loan bursary scheme; social spending; management strategy; consumption share; Fiscal rules; Capital spending; Africa; Global; Southern Africa; Sub-Saharan Africa; East Asia
Cover IMF Staff Country Reports
Kingdom of Lesotho: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Kingdom of Lesotho
International Monetary Fund. African Dept.
Lesotho has been simultaneously hit by the pandemic, declining transfers from the Southern African Customs Union (SACU), and the impact of the war in Ukraine. The pandemic exacerbated the impact of sluggish regional performance, climate shocks, and longstanding structural issues such as regulation, governance, political stability, financial inclusion, and diversification. Public expenditure has continued to increase, such that the decline in external transfers precipitated significant financing pressures and growing domestic arrears. With limited inflows to the private sector, the resulting public sector-driven external imbalances have continued to put pressure on international reserves needed to maintain the exchange rate peg.
Keywords:
CBL approval; Lesotho economy; private sector; government finance; liability positions vis-à-vis nonresident; exports threshold; IMF staff calculation; Africa; Southern Africa; Global
Cover IMF How To Notes
How to Set Up A Cash Buffer: A Practical Guide to Developing and Implementing a Cash Buffer Policy
Yasemin Hurcan
,
Mr. Emre Balibek
, and
Fatoş Koç
Maintaining a cash buffer has emerged as a risk management tool for government cash and debt management. During budget execution, there is considerable cash flow volatility and timing mismatches concerning revenue collections and expenditures, debt inflows, and debt service. Cash balance management aims to address these mismatches and to ensure availability of liquidity in government bank accounts. From a debt management perspective, holding an appropriate level of cash balance serves to mitigate funding risk. Effective cash balance management is even more critical when there is heightened uncertainty about the magnitude and timing of cash flows, as seen during the coronavirus disease (COVID-19) pandemic. This note discusses the role of the cash buffer for managing cash balances and offers practical approaches to developing a policy framework, considering the risk mitigation objectives and the cost of carry.
Keywords:
FADHTN; HTN; cash balance; opportunity cost; annual debt service; cash balance management; cash flow volatility; financing option; market volatility
Cover IMF Staff Country Reports
Kingdom of Lesotho: Technical Assistance Report-Government Finance Statistics
International Monetary Fund. Statistics Dept.
In response to a request from the authorities and as part of the United Kingdom’s Department for International Development (DFID) Enhanced Data Dissemination Initiative (EDDI) 2 project, a government finance statistics (GFS) mission visited Maseru, Lesotho, during January 20–31, 2020. The mission was the last, in a series of five consecutive technical assistance (TA) missions to Lesotho, as part of the EDDI 2 project. The objective of the five-year project, that started in 2015 was to foster compilation and dissemination of GFS and public sector debt statistics (PSDS) consistent with international methodological standards. The work program under the project identified the enhancement of classification of transactions in fiscal accounts and the expansion of the institutional coverage of data to include all significant general government units as key milestones to achieve by the end of the project.
Keywords:
ISCR; CR; accounts payable; documenting GFS compilation procedure; compilation file; QCBS report; TA recommendation; Recording transaction; GFS dissemination; GFS work plan; debt Statistics; MOF's Macroeconomic Policy; CBL match record; GFS TA recommendation; Government finance statistics; Public sector; Data collection; Financial statements; Africa
Cover IMF Staff Country Reports
Kingdom of Lesotho: Requests for Disbursement Under the Rapid Credit Facility and Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for the Kingdom of Lesotho
International Monetary Fund. African Dept.
The COVID-19 pandemic is having a severe impact on Lesotho’s economy. Supply chains for major industries have been disrupted and a national shutdown to contain the virus curtailed economic activity with adverse social impacts. The economy is expected to be further hit by declining external demand for textiles and diamonds, shrinking remittances, and delays to major construction projects. The authorities are taking measures to contain the virus and are implementing plans to mitigate its health and economic consequences. The economic shock, as well as the additional required spending, have generated urgent balance-of-payments (BOP) needs. Lesotho does not have an arrangement with the Fund.
Keywords:
ISCR; CR; financing; pandemic; support; emergency financing request; IMF lending tracker; bursary scheme; emergency financing from the IMF; financing gap; COVID-19; Africa; Global; Southern Africa; Debt sustainability analysis; Stress testing
Cover IMF Staff Country Reports
Kingdom of Lesotho: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Kingdom of Lesotho
International Monetary Fund. African Dept.
This 2019 Article IV Consultation highlights that while international reserves are at adequate levels and banks remain well-capitalized in the Republic of Lesotho, domestic arrears are beginning to impact the broader economy, exacerbating growth challenges posed by structural impediments. The recently passed FY2019/20 budget envisages an ambitious consolidation that could begin to lay the groundwork for a transition to private-sector driven growth. Construction related to the second phase of the Lesotho Highlands Water Project will support medium-term growth, and the diamond and textile industries have positive prospects. Fiscal adjustment is needed to address government arrears, buttress debt sustainability, and safeguard the link to the rand. Generating strong and inclusive growth will require improved public service delivery and the private sector to become the primary engine of job creation. Better targeting of the government’s resources, Public Financial Management reforms, and reorienting both expenditures and the role of government in the economy will be critical to achieve these goals.
Keywords:
ISCR; CR; government; Lesotho; government payment arrears; payment arrears; Our Lesotho authorities; liability positions vis-à-vis nonresident; SACU revenue; balance of payments weakness; Government finance statistics; Budget planning and preparation; Africa; Southern Africa; Global; transparency policy
Cover IMF Staff Country Reports
Kingdom of Lesotho: Technical Assistance Report-Government Finance Statistics
International Monetary Fund. Statistics Dept.
This Technical Assistance Report discusses the findings and recommendations made by the IMF mission regarding compilation of Government Finance Statistics (GFS) in Lesotho. The IMF mission reviewed current compilation methods of GFS for the budgetary central government and found that there were significant accuracy, classification, coverage, and comprehensiveness issues that undermine the credibility of fiscal statistics currently compiled and disseminated. Currently compiled and disseminated GFS include a large and persistent statistical discrepancy. The statistical discrepancy averaged to about a third of total revenue in preliminary data for FY2016/17 and FY2017/18. The mission also identified and discussed with the staff of the Ministry of Finance a number of reasons that may partly explain the discrepancy.
Keywords:
ISCR; CR; financial statement; transaction; payment; statement of operation; BCG statement; debt liability; capital budget; noncash transaction; GFS statement; Government finance statistics; Chart of accounts; Budget planning and preparation; Financial statements; Africa