2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Kingdom of Lesotho

Abstract

2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Kingdom of Lesotho

RELATIONS WITH THE IMF

(As of January 12, 2018)

Membership Status

Joined 07/25/1968; accepted the obligations of Article VIII, Sections 2, 3, and 4: 03/05/1997.

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Financial Arrangements:

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Formerly PRGF.

Projected Payments to the IMF

(SDR Million; based on existing use of resources and present holdings of SDRs)

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Safeguards Assessment

An update safeguards assessment, completed in November 2012, confirmed that the CBL has taken steps to strengthen safeguards since the 2010 assessment, but also that risks remain. Deloitte (South Africa), appointed as the CBL’s external auditor in 2010, has since completed the audits of financial years 2010 to 2016 within the three-month statutory deadline and issued an unqualified audit opinion following each audit. Since the 2012 assessment, aspects of the monetary data reporting process have been strengthened with IMF technical assistance. However, audit oversight and internal audit remain areas where improvements are needed to strengthen overall governance and accountability.

Exchange arrangement:

Lesotho is a member of the Common Monetary Area (CMA). The de facto and de jure exchange rate arrangement are classified as a conventional peg at par to the South African Rand, which is also legal tender in the country. Lesotho has accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Articles of Agreement. Lesotho maintains one exchange restriction arising from single discretionary allowances of M1 million per individual per calendar year, for residents over 18, and of M200,000 on the same basis for residents under 18. The availability of foreign exchange beyond these limits is subject to a discretionary approval on a case by case basis. As of January 10, 2018, the maloti rate per U.S. dollar was M12.42.

Article IV consultation

The 2015 Article IV consultation was concluded by the Executive Board on January 29, 2016. Lesotho is on the standard 12-month Article IV consultation cycle.

Technical assistance

The Fund has been providing Lesotho with technical assistance and training to help authorities strengthen their capacity to design and implement effective policies. Technical assistance covers wide range of areas in macroeconomic, fiscal, and monetary. Specific technical assistance projects since 2013 are the following:

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The JMAP Bank-Fund Matrix

(As of January 30, 2018)

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Statistical Issues

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Lesotho: Table of Common Indicators Required for Surveillance

As of December 14, 2017

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Daily (D); Weekly (W); Monthly (M); Bi-monthly (B); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The GG consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition. Due to capacity constraints, the authorities do not report revenue, expenditure, balance and financing composition for general government.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Reflects the assessment provided in the data ROSC published in October 2006 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 8, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.