Kingdom of Lesotho: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Kingdom of Lesotho

April 30, 2019

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Kingdom of Lesotho: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Kingdom of Lesotho, (USA: International Monetary Fund, 2019) accessed December 21, 2024

Summary

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.

Subject: Budget planning and preparation, Economic and financial statistics, Expenditure, Government finance statistics, Public financial management (PFM), Revenue administration

Keywords: Africa, Balance of payments weakness, Budget planning and preparation, CR, Global, Government, Government finance statistics, Government payment arrears, ISCR, Lesotho, Liability positions vis-à-vis nonresident, Our Lesotho authorities, Payment arrears, SACU revenue, Southern Africa, Transparency policy

Publication Details

Pages:

75
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2019/113
Stock No:

1LSOEA2019001
ISBN:

9781498312370
ISSN:

1934-7685

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