Following his
appearance on Radio Lesotho morning current affairs
programme, Seboping, on 9 April, 2006, the Minister of
Finance and Development Planning, Honourable Timothy Thahane,
proceeded to Pretoria to meet Members of the Diplomatic
Missions accredited to Lesotho and Basotho resident in South
Africa to discuss the 2006/2007 budget speech.
In the meeting with the Diplomatic Missions, held at 14:30
same day, the Minister outlined Lesotho’s planning and
policy framework, and in particular explained the pillars of
the National Vision 2020, and the medium term policies
outlined in the Poverty Reduction Strategy as well as
National Goals and how these are given effect in the budget.
Members of the Missions raised questions on the
prioritisation between social spending, particularly on
health and education, and urban and rural infrastructure
which appeared to be the focus of the Fiscal Year 2006/2007
budget. The meeting agreed that while social spending was
regarded internationally as priority sectors, especially for
poverty eradication, governments should not necessarily
throw money at these sectors if they are under-performing in
the delivery of services. Furthermore, quality of services
is as important as quantity in the consideration of
allocation of funds. The Capability of executing agencies to
deliver both quantity and quality services is paramount in
allocation decisions. The Minister noted that both social
spending in Lesotho has traditionally received and large
share of the budget and will be the case in FY 2006/2007.
Discussions also touched on the sustainability of the
Southern African Customs Union revenues as well as the
emergence of China and India as world economic powers. The
Minister made it clear that he does not support the policy
of restraints imposed on any country and instead favours
working with all partners on an equal footing.
The discussions with the Basotho resident in South Africa
took a different form, concentrating instead on
opportunities for investment in Lesotho. The Minister
outlined Government actions that address Lesotho’s
investment climate and in particular the generous tax
restructuring announced in the budget speech as well as the
reforms planned for implementation during 2006. These
include:
- addressing
financial sector bottlenecks including improvements in
payments clearing systems, creating an enabling
environment for leasing and mortgage regimes, establishing
a credit bureaux, and improving or enacting related
legislation;
-
strengthening judicial services related to financial
intermediation, including strengthening, simplifying,
streamlining, and expediting commercial court procedures
as well as establishing small claims courts;
- streamlining
land titling and lease application procedures and
computerising lease management and registration processes;
- improving
and computerising the immigration and passport services;
- capacity
building programme for the private sector including the
establishment of business information centres and
strengthening of business support and advisory
institutions; and
-
restructuring of the government procurement system and
expediting payments to suppliers by government.
Following
discussions, it was agreed that there should be a focal
point for regular contact and pursuit of business investment
opportunities. The Lesotho National Development Corporation
and its Investment Promotion Centre, the Ministry of Trade
and Industry, Cooperatives and Marketing, and the Department
of Private Sector Development and Financial Affairs of the
Ministry of Finance and Development Planning will be in the
forefront of these contacts. In particular, Mr Mosito
Khethisa, Chief Executive, Private Sector Development will
initially be the contact point before contact is established
with the other key institutions (http://www.finance.gov.ls/divisions/psd.php).
It was also agreed that an interactive area should be
created on the websites of the Ministry and those of the
other investment promoting agencies for the purpose of
making on-line suggestions and discussions.
The meeting agreed that consultations should be held
regularly.
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