Africa > Lesotho, Kingdom of

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International Monetary Fund. Statistics Dept.
The mission assisted the Central Bank of Lesotho in compiling financial soundness indicators (FSIs) using the new methodology of the IMF’s 2019 FSIs Compilation Guide. Specifically, in collaboration with the CBL staff the mission updated the methodologies for compiling FSIs for deposit takers and developed new FSIs for life and non-life insurance corporations for reporting to IMF and dissemination.
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.
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.