Business

Budget speech postponed

Staff Writer

THE Minister of Finance, Moeketsi Majoro, has postponed the long-awaited presentation of his national budget that was penned in for today to next Tuesday.

In a letter to the Speaker of parliament yesterday, Dr Majoro said the postponement was due to reasons beyond his control.

“I write to change the date of presentation of the budget speech from 7 March to Tuesday 12 March 2019 at 9am,” Dr Majoro said.

“This is due to factors entirely beyond our control.

“There will be a live broadcast of the event on television and radio nation-wide. I humbly request you to inform honourable members of the National Assembly.

“I also request your esteemed office to facilitate for the presentation as usual.”

When he finally makes the presentation, Dr Majoro will have to walk a tight rope with huge expectations from different sectors and groups.

On one had he has to balance the expectations of the increasingly restive civil service that has been agitating for salary increments while on the other he has soberly heed to the calls of the International Monetary Fund which has advised the country to implement austerity measures.

In an unprecedented move, magistrates embarked onto a strike last year demanding salary increments, while since the presentation of the last budget, teachers have struck intermittently pushing for salary increases. Even now, the teachers are on a year-long strike to push for salary increments.

The police have also clamoured for salary increases while factory workers turned violent when they demonstrated for salary increments.

Factory workers destroyed property in Maputsoe and in Maseru when they fought running battles with the police last year to push for salary hikes.

Dr Majoro will also need to ensure that he comes up with a pro-poor budget that will enhance the provision of critical services like education and health while also increasing activity in the private sector to create employment and limit the burden of job creation that currently lies on the government.

The business community is also waiting expectantly to see whether or not the minister will further increase taxes as he did last year.

Apart from all the expectations, Dr Majoro is expected to come up with a document that is attractive for the business community, particularly foreign direct investment which the country has been yearning for.

Dr Majoro unveiled a M16.5 billion budget for the 2018/19 financial year whose major highlights include a 4 percent salary increase for civil servants and a 1 percent hike of VAT from 14 to 15 percent to mirror a similar increase in South Africa.

Of the M16.5 billion budget, M10, 7 billion was channeled towards recurrent expenditure while the rest went to capital expenditure.

Themed on Pursuing Job Creation and Restoring Fiscal Stability and Sustainability, Dr Majoro said the budget was prepared against the background of the tough fiscal situation where Lesotho’s South African Customs Union (SACU) revenue share for 2018/19 financial year was expected to decline by M616.1 million from the 2017/18 financial year.

The situation was compounded by the Lesotho Revenue Authority’s (LRA) failure to meet its target for the second year running registering a deficit of M684 million.

Dr Majoro also increased VAT on telecommunications and electricity, which stood at 5 percent to align to the unitary rate of 15 percent. The VAT for telecommunications was increased by 4 percent and 3 percent for electricity.

On job creation, Dr Majoro last year said the government intended to venture into commercial agriculture where it would pay particular attention to increasing the production of meat, hides, wool and mohair.

Dr Majoro also intimated that measures to stimulate economic growth would only succeed in a climate where government and all the stakeholders vigorously worked for the implementation of multi-sector reforms as recommended by the Southern African Development Community (SADC).

However, little has been done towards the national reforms process despite the looming May 2019 deadline which the country was given by SADC to have fully implemented constitutional and security sector reforms.

The reforms are aimed at creating lasting peace and stability in the country without which economic growth cannot be achieved.

Dr Majoro also lamented the poor policy formulation and implementation by the government and the lack of coordination among its ministries.  The rise of government ministries had been accompanied by fragmentation of government initiatives, he said.

The minister also noted that the economic situation remained precarious as international investors’ skepticism about the government’s ability to last its five-year term have affected the country’s ability to attract new investments.

Dr Majoro said while the advent of the four-party coalition government in 2017 had been welcomed by the international community as an important milestone in the restoration of the rule of law in Lesotho following a period of widespread impunity and instability from 2015 to 2017, investors had nonetheless continued to sit on the fence.

He also revealed that the government was toughening its stance on all non-performing parastatals and companies in which it has interests. He also said the likes of Lesotho Flour Mills (LFM), Econet and Avani Hotels had all been told to start making profits because the government had not entered into strategic partnerships for charity but to make profits.

 

 

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Lesotho Times

Lesotho's widely read newspaper, published every Thursday and distributed throughout the country and in some parts of South Africa. Contact us today: News: editor@lestimes.co.ls Advertising: marketing@lestimes.co.ls Telephone: +266 2231 5356

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