IMF has cautioned us about our government spending and refers particularly to large public sector wage bill which it says needs to be contained to address financing difficulties, while ensuring that the most vulnerable are protected. Our economic growth, according to IMF, is recovering following last year’s slowdown, although the economic situation remains challenging, and the erosion of fiscal buffers highlights the need for adjustment.

Of utmost important to us is IMF’s take on Lesotho’s ongoing national reforms, that they should empower the private sector, rather than the government, to act as the engine of growth and job creation. A hope on our economic performance is cast where IMF anticipate slow economic recovery this coming fiscal year to be driven by strong production in the diamond mines, higher textile exports, and the initiation of Phase 2 of Lesotho Highlands Water Project.

We know that our government has already acknowledged fiscal challenges and therefore hope that they will be well taken care of in the preparation for the coming budget. The manner in which the budget will be formulated will hopefully address the fact that our government’s efforts to mobilize additional domestic revenues and constrain procurement of goods and services have not been sufficient to avoid the emergence of payment arrears, and long-standing weaknesses in ministries’ public financial management that further hamper effective budget planning and implementation.