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Citizens Guide 2020-2021

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Citizens Guide 2020-2021 This Photo by Unknown Author is licensed under CC CITIZEN’S GUIDE TO THE 2020/21 BUDGET “Inter-ministerial collaboration, multi- disciplinary approaches and subsidiary to tackle poverty, malnutrition, and joblessness focusing on service delivery at the local level” 26/02/2020 MINISTRY OF FINANCE 1 | P a g e FOREWORD BY THE INTRODUCTION HONOURABLE MINISTER OF FINANCE This year’s Budget marks the fourth Budget of this Coalition Government and Fellow citizens let me welcome you to the paves way for the elections in 2022. For citizen’s guide to the National Budget for the past three years, this Administration the fiscal year 2020/21. Every year the has been leading an effort to rebuild our budget speech and proposals are economy within very challenging presented to the Parliament and important economic and fiscal conditions, but on decisions are made on how the public many occasions where our country has money will be spent and the amount of been under suffering, it has demonstrated revenues needed to fund such overwhelming flexibility. This expenditures. Administration inherited a financial economic crisis characterized by depleted The Citizens Guide aims to briefly international reserves and slow structural explain how public purse will be used in growth. This was assumed to be merely 2020/21 fiscal year. It is a simplified cyclical and would soon disappear, but it version of the budget speech and allows has continued and now we fully citizens to better understand issues understand that our woes emanate partly contained in the Budget Speech which is from factors we have control over. more detailed and expressed in more Persistent economic slowdown in South technical terms. This is therefore Africa, slow growth of our exports and expected to enable the citizens to take volatility of SACU revenues – none of part in informed debate about the choices which our country has control over – have made by their Government. negatively affected our economy. With the limited fiscal resources and Thus, the mandate of this Government unlimited needs of the people, I am remains clear, to provide the citizens with dedicated towards ensuring financial an honest, clean, transparent and effective transparency and accountability at the administration; revive the economy after forefront of our decisions today in order several years of economic stagnation; to have a better tomorrow. This can only implement an innovative approach to be possible if each citizen is accelerating investment and job creation; knowledgeable about the deliverables of and repair the fiscal accounts, which were their Government. It is thus critical that seriously damaged by wasteful the entire Lesotho political leadership expenditure. seriously put this country and its people ahead of their personal interests. WHAT IS COVERED BY THE NATIONAL BUDGET? Dr Moeketsi Majoro The National Budget covers all government spending and revenues by. Minister of Finance Ministries, Departments and Agencies of the Government of Lesotho. There are also State-Owned Enterprises which are financed by the Government of Lesotho 2 | P a g e which in turn are expected to generate REVENUE revenue for the Government. All these 2 056 832 845 sectors are financed through the Budget of the Government of Lesotho to deliver 858 226 145 goods and services to the public. WHERE DOES THE MONEY COME FROM? 19 323 710 The 2020/21 Budget is financed through 339 Government Revenues, Grants from development partners and external borrowing. Government Revenues Donor Grands External loans GOVERNMENT REVENUES As illustrated in a chart above, the large The overall target for Government chunk of revenues comes from revenues revenues is M19.3 billion. This is made collected by the Government followed by up of tax revenues and non-tax revenues external loans then donor grants collected by the Government of Lesotho DONOR GRANTS HOW IS THE MONEY GOING TO BE USED? These are monies given by development partners with no obligation to be repaid. The 2020/21 Budget is divided into two For the 2020/21 fiscal year they are categories of expenditure: Recurrent projected at M858.2 million Expenditure and Capital Expenditure EXTERNAL LOANS RECURRENT EXPENDITURE These are monies coming from These are expenditure for day to day development partners with obligation to running of the Government like paying pay back with minimal interest. They are salaries and other expenditures. For projected at M2.1 billion for the 2020/21 2020/21 fiscal year the recurrent fiscal year. expenditure amounts to M17.4 billion. CAPITAL EXPENDITURE These are expenditures for investments component of the budget like road construction and erection of structures like buildings. For 2020/21 fiscal year the capital expenditure amounts to M6.3 billion. 3 | P a g e manufacturing and processing when completed. Capital Expenditure vs The LNDC in partnership with the private Recurrent Expenditure sector is conducting a series of studies for 25 000 000 000 development of the first Special Economic Zone (SEZ). These studies will 20 000 000 000 be undertaken in Mafeteng and Berea 15 000 000 000 districts. 10 000 000 000 In 2019/20 fiscal year, LNDC in 5 000 000 000 partnership with the private sector has launched a M405 million industrial hemp 0 and super foods project in Qeme, Maseru Category 1 district. The project is expected to roll out Total Expenditure Recurrent Capital over three-year period. As illustrated in a chart above, the Government of Lesotho’s Recurrent Budget is more than double the Capital Budget which is a concern for development. HOW IS THE MONEY ALLOCATED? TRADE AND INDUSTRY The Tikoe phase III infrastructure and WOOL AND MOHAIR INDUSTRY factory shells located in Maseru was launched by LNDC in the last financial The Government of Lesotho has invested more than M400 million to improve year with an investment to the tune of M450 million and is expected to be economic and climate resilience of the completed at the end of 2021. This industry. Lesotho has 4 million small development is expected to accommodate stock of approximately 1.8 million 3000 workers in manufacturing and hectares of rangeland. The commercial processing when completed. industry is estimated at about M900 million, but the government recognises The M800 million Phase I of the Belo that this value could increase with careful infrastructure and factory shells in Butha selection of interventions and Buthe was launched in 2018 and it is investments. Government recognises that expected to be completed by the end of less than half of the sale value of wool 2019/20 fiscal year. This development and mohair goes to farmers with rest will create over 14000 jobs in benefitting intermediaries. 4 | P a g e well as micro interventions in the M1-5 million range. The Sehlabathebe National Park integration into the Trans-frontier Conservation Area as well as the enactment of legislation to reduce the use of plastics and protect biodiversity will receive priority. The deployment of young people under the Graduate MINING Programme will be utilized to create an inspectorate and compliance unit. Mineral exploration is an important prerequisite to the development of mineral industry; Though, lack of geological and geospatial information is a major limitation on Lesotho’s ability to maximise its potential for exploration of mineral resources, in 2019/20 financial year, the Ministry of Mining managed to collect 125 samples for anomaly area number 7 in the Mohale’s Hoek district for verification of previous results. AGRICULTURE, FOOD PRODUCTION AND CLIMATE CHANGE The Government is implementing Smallholder Agricultural Development Programme, which aims to support farm production, marketing of produce and insulating farmers against climate change TOURISM AND CRATIVE events through financial grants. 121 more INDUSTRIES grants amounting to M37 million were recently awarded to deserving farmers, The 2020/21 budget will see completion while a study on irrigation masterplan of the new National Museum and and investment framework has been Semonkong Tourist Information Centre. commissioned. In the upcoming medium-term budget framework, emphasis will be moved The Ministry of Small Business away from large capital investments and Development, Cooperatives and begin to focus on greater marketing of the Marketing is in the process of country to stimulate tourist numbers as constructing a Northern Region Fruits and Vegetables Fresh Produce Market Centre at Tsikoane in Leribe. The 5 | P a g e construction of the Centre is expected to be completed at the end of the 2019/20 fiscal year and the market center will serve at least 400 commercial farmers in the Northern Region. Plans are underway for construction of Southern Region Fruits and Vegetables Fresh Produce market Centre in Litsoeneng, Mohale’s Hoek and build Piggery and Poultry slaughterhouse at Ha Foso in Maseru. INFRASTUCTURE SERVICES M100 million has been set aside to develop advanced infrastructure projects identified through the April 2019 investment laboratory. Arrangements are underway to set up a national Delivery Unit, and to train the unit staff INFORMATION AND Roads and Bridges COMMUNICATION Government is facing a challenge of To implement phase II of the e- trade-offs between maintenance and new Government Infrastructure Project, the investments in road construction, while Government will increase broadband considering this challenge, Government coverage in rural and unserved areas is assessing bundling of new road tenders through construction of 48 mobile sites to with maintenance plans for whoever wins improve 4G coverage and support the the tenders. This will ensure construction completion of a 96 km Optical Ground companies consider the risk of poor Wire (OPGW) fiber network from Roma workmanship during construction. While to Thaba-Tseka to improve the quality of for gravel roads, the Government will service delivered to mobile data end- introduce the use of perma-zyme bonding users in the Thaba-Tseka district.
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