Jan. 11, 2023


3 min read

Arrears dating from 2014 haunt govt

Arrears dating from 2014 haunt govt

Minister of Finance and Development Planning, Dr Retšelitsoe Matlanyane

Story highlights

    New administration cannot move forward owing to heavy debts
    Elaborate ideas that won the Prime Minister the top seat appear to be so near yet so far

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THE Revolution for Prosperity (RFP)-led government has taken a swipe at previous regimes, accusing them of failing dismally to settle their arrears some dating as far back as 2014.

This, the newly formed coalition government said, thus, negatively affected the much-desired economic development.  

But the new administration, which took office after the October 2022 general elections under renowned mining mogul, Sam Matekane, has since restored Basotho’s dwindling hope.

However, as things stand now, it seems rather difficult for the new regime to move forward and fulfill the people’s wishes.

Among others, the Matekane administration had pledged to entice investors into the country, fight the pervasive corruption and create employment, particularly for the youth.

But some of the elaborate ideas that won the Prime Minister the top seat appear to be so near yet so far.

To try and mitigate some of the challenges it encounters, the government is implementing measures that are earmarked to among others reduce spending and save more money in order to ensure sustainability.

Some of these measures were recently outlined by the Minister of Finance and Development Planning, Dr Retšelitsoe Matlanyane when addressing the nation on the country’s current economic condition.

She said, for instance, while the government still owes suppliers over M600 million, more than M400 million of that money has been frozen due to unclear documentation. 

“Out of the M643 million owed, we are convinced that the government only has to pay M200 million, pending availability of funds. The remaining balance of M443 million has been frozen because there was no clear documentation confirming that such companies are owed by the government,” Dr Matlanyane.

She said since 2014, previous governments have been failing to take responsibility to pay arrears on time.

“Even today, some arrears dating back from that year still have to be paid,” she said.

Owing to the red tape, the Minister said, the government struggles to stick to its budget as some of its monies end up being diverted toward previous years’ programmes.

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In the financial year 2019/20 for example, the government failed to pay suppliers an estimated amount of M1.2 billion. Part of that money was only paid in the following financial year. In the same year, the government also failed to pay M800 million to its suppliers, part of which was only settled in the 2021/22 fiscal year.

To date, M260 million which was supposed to have been paid in the previous financial year is yet to be settled.

“This is a painful behaviour that has killed many Basotho businesses while several others struggle to stay afloat as they find it difficult to pay loans from local banks,” the Minister also said. 

In 2020, scores of suppliers in the hospitality industry threatened to seek intervention from the international community because the government could not pay them for services rendered.

At the twist of events, some of those companies collapsed while others still struggle to make ends meet.   

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