Home Big Interview Implement reforms quickly: EU

Implement reforms quickly: EU

by Lesotho Times


THE European Union (EU) has remained one of the country’s most steadfast developmental partners, responding to calls for assistance each time the government needs it. It is in that same vein that the EU recently responded to Prime Minister Thomas Thabane’s October 2019 call for drought relief assistance to feed over a quarter of the country’s 2.1 million people.

Last week the EU gave the World Food Programme (WFP) €1,5 million to provide emergency food aid to at least 22 000 Basotho in need of food assistance. The fund was announced by the EU Ambassador to Lesotho, Christian Manahl (CM), at a joint media briefing with the WFP and the Office of the United Nations Resident Coordinator in Maseru.

Dr Manahl (CM) recently spoke to the Lesotho Times (LT) on a variety of topical issues among them the reforms, the state of the country’s judiciary and other forms of assistance that the EU is giving to Lesotho. Below are the excerpts from the interview.

LT: What were the major highlights of 2019? What were the achievements and challenges?

CM: When I arrived in 2017, there was just a 16 percent commitment of the funds allocated to Lesotho. That figure was at 60 percent by the end of 2018 and we are now close to 100 percent. We hope that in the next coming weeks we can complete the commitment of these funds. This is important – we have allocated a total of €124 million discernible for the five-year period covering the 11th European Development Fund (EDF). Of course, the implementation of these programmes will still be on going.

A commitment in layman’s terms is a contractual agreement between the government of Lesotho and the EU delegation for the financing of specific projects and programmes.

We have these five-year citing’s and due to the recurrent political instability and the previous snap elections, and the related suspension of budget support we hit a snag before I arrived and we had a very low commitment level. Since I have been here, and with the help of the work of my colleagues and with the new government, we have indeed been able to commit all of these funds which is important because that means of course in practice some of our major projects in particular in the area of water supply, lowlands water supply, but also the integrated catchment management project that I mentioned during the press conference.

These projects are going to start. They will be implemented in the next couple of years. They will create jobs. They will create an improved water supply situation and hopefully for the ICM they will improve over time the environmental and pastoral management and secured water capacity of Lesotho. As an important aspect of course was governance. We continue with the program for social protection and PISA, Public Initiative for Social Accountability, but we have also provided support for the reforms process. In its broader context, to start with, the European Union has provided support for sub-mil during its employment. About 1/3 of the cost of sub-mil was paid by the European Union.

Then we have funded part of the reforms meetings, we have set aside money for the national reforms authority which has been established, was it last week? This is a project which of course is dear to our heart. It is a reform which I think has been talked about a long time in Lesotho and we have made considerable progress over the last couple of years. The reforms dialogue, the first phase been successfully completed. We are now moving to the implementation and I truly believe that this is going to be a transformative process for Lesotho which will provide more stable political foundations which are of course important in order to attract investments, improve the economic situation and to create employment which is perhaps the biggest single challenge that Lesotho faces, getting the private economy going and reducing unemployment.

Currently numerically speaking the biggest employers of Lesotho are the government and South Africa. People are going to South Africa to work there, this of course has been a long tradition and we hope that this will still remain a possibility. It is important for a small county, but at the same time we hope that as many people as possible will find gainful decent employment in their home country. That is a major challenge of course for the government and for its international partners. In order to achieve that, achieving political stability first, creating solid foundations that allow a coalition government to run its full term are important and we hope that the reforms will help Lesotho get there.

LT: During the tenure of the previous government, the EU withdrew support citing financial irregularities during the time and other issues. Even when this current government came in, it was in June 2018 when the Minister of Finance issued an appeal for budget assistance from your organisation, and the IMF even but to date that financial support has not been availed. Take us through the issues that caused that budget support to be withdrawn. Can you tell us whether those issues are still outstanding even now? What needs to be done for Lesotho to get that budget support again? What is it that the government is failing to do?

CM: Let me first say that this was before my time and budget support was not withdrawn, it was suspended and subsequently, we used the bulk of the same amount of money to move to programme support; which is financing the programmes that I have mentioned. There was a little bit of a reshuffle obviously, but it is not that the money was withdrawn. It was reallocated to programme support and planning these programmes and getting them approved of course has taken time… that being said, the basic criteria, and I am not going to bore you with the specific technical details of budget support, are very simple.

It is transparency, accountability and efficiency, efficiency meaning a mutual understanding between the international partner and the government on the allocation of the budget for specific policies. In the case of Lesotho, that would mean a clearly visible connection between a national strategic development plan which we believe is a good, well thought-through document and budget. We have been working with the government, specifically the Ministry of Finance over several years together with the World Bank and the IMF to provide the technical knowledge and the instruments in order to improve public finance management.

A key stone element of the policy that we supported together with the World Bank is the IFMIS (Integrated Financial Management and Information System), which has become operational in the course of last year. There have been a couple of technical hiccups which I believe have been resolved or are in the process of being resolved. But we believe that the government is gradually reaching the stage where all the instruments are there in order to gain, again, the prerequisites for budget support.

We are not there yet but I am confident that we are moving…and when the time is right, I am sure the Minister of Finance will come to us.

To my understanding, and I say that on the basis of a conversation we had about a week ago with the IMF mission which had visited the country, at present there is no request from the government for an IMF programme, which of course would be, not necessarily a prerequisite for EU budget support but it would be a strong argument to have a staff monitored programme…it would give us the confidence… And of course, in the course of this year, since we are reaching the end of the budget agreement and we have already practically reached the 11th EDF cycle, we must discuss; with the government, the future priorities in terms of its own policies and to discuss where the EU most usefully support government policies. We do not want to and we will not support a very broad range of sectors because we are not the only international partner of Lesotho, we would like to focus on certain sectors.

Water would be an obvious area that we would propose, governance because we have been working in this area quite successfully and of course the delegation has the necessary human recourses and expertise in these areas, and for a small delegation like ours this is important. We cannot change people overnight and send them back because we need now a specialist in agriculture instead of water management or health.

With this being said, we align ourselves as always with the priorities of the government and we will listen to the government on what its priorities are. And also we do, apart from the areas where our delegation is directly involved like I said in water and governance, a little bit in energy as well, we do provide support other areas. One important sector is health. Here our delegation is not directly involved, but Lesotho is an important recipient of the Global Fund to fight against HIV and AIDS and tuberculosis, and the EU and its member states provide about half of the funding worldwide, not specifically for Lesotho, of the Global Fund… And of course, health is an important issue in Lesotho and we are happy that the EU is able to support this sector.

LT: The government has faced several strikes in the past two years. We have seen teachers, factory workers and even more curiously, magistrates and uniformed forces-which is unprecedented. On one hand you have the IMF and other development partners advising the government to reduce its wage bill and on the other you have the workers clamouring for increases. When you are looking at the situation and as a development partner of the country and the government, what advice would you give in such a situation to the workers themselves and to the government as well?

CM: First of all, strikes are not exclusive to Lesotho and 2019 was a particularly propitious year for strikes. Algeria, Sudan, Lebanon and perhaps a couple of other governments actually came to fold due to strikes in their countries. But we have also seen strikes in Chile, Brazil, Venezuela, Colombia, Hong Kong, France and a number of countries around the world. There seems to be an atmosphere of unrest in many countries, this is driven by a sense of inequality which has been statistically documented and publicised by a number of international think-tanks and NGOs as you know. So, it is not exclusive to Lesotho and of course, Lesotho is facing this dilemma of necessary austerity, the need to reduce the public wage bill which I understand in terms of the percentage of the budget is the highest in the world or among the highest in the world. And of course, that is an unsustainable situation.

To find a compromise between the interests of the public servants concerned and by extension their families on the one hand and on the other hand the necessities of right-sizing the budget and operating within the specific budget constraints is difficult. This is challenge in many countries. Of course, Lesotho has the additional challenge of struggling with dependency on the Southern African Customs Union (SACU) revenues which fluctuate depending on factors which are not really in the control of the government. We hope that this year will become a better year in that respect and as I mentioned, I read that SACU revenues should be better this year. This, perhaps, provides a short window of opportunity that the government would be well advised to use very carefully in order to balance out the interest that I have mentioned.

The longer-term challenge is obviously to move from a very public service dependent economy to an economy where the private sector plays a significant role. This is very well articulated in the National Strategic Development Plan (NSDP). Of course, it is easier said and written than it is put into practice, but that is the real challenge, to ensure that the very high percentage of unemployment in Lesotho is in the medium term absorbed by a thriving and vibrant private sector which one, would increase of course the governments tax revenues because you need to have an economy that makes money in order to tax companies.

But it would also make it easier for government to progressively reduce and right-size the public service because would know that people do actually find jobs outside the public service in the private sector. To move from where we are today to that which is well articulated in the NSDP II is difficult and is of course fraught with social unrest of the kind we have seen. A specific situation is the strikes that you mentioned in the textile industry and there the partners, meaning the investors, the labour unions and the government are struggling with international competition.

We all know of course that the textile industry, initially financed by investors from Taiwan now the ownership has spread out a little bit with investors from mainland China, South Africa and of course from Basotho themselves, has become a little bit more diversified. The industry came to Lesotho because of the relatively low labour costs. Now the salaries are low as has been recognised by the international labour organisation and of course the workers have demands that over time their salaries increase. Again, it is difficult to balance these legitimate interests with the risk that investors will pull out of Lesotho and invest somewhere which will of course be most unfortunate.

And that is the art of politics in the broader sense to bring these interests together and strike a reasonable balance which allows a modest increase of their salaries which I believe was achieved in the course of last year, while at the same time making sure that these industries stay here. I am not an expert on the sector, but I understand that there is still a very heavy element of foreign labour at the higher echelons and I think that, perhaps, there is something government could do to force these enterprises also to improve the human capital of Lesotho that Basotho have the possibility into the more skilled and management positions in this business so that with time there is a genuine expertise that at all levels allows Lesotho to maintain this sector beyond AGOA.

We hope of course that AGOA will be continued, but that is something which is not in our control, not in Lesotho’s control, and the textile sector of Lesotho has to be prepared to find additional markets and to operate outside AGOA which has been a very favourable framework.

LT: We recently saw a somewhat dodgy practice in the courts where the Chief Justice apparently railroaded herself to preside over the First Lady’s bail hearing. Then the bail itself was then awarded, somewhat clandestinely in that the funds were paid a day after the First Lady was released. The justice system has been dogged with problems for a long time. In fact, it is one of the problem areas that Lesotho must address. What would you say this reflects in terms of Lesotho’s justice system?

CM: I have of course read about these procedures, about the bail procedure. I am not privy to the details and I am not a lawyer myself, so I do not want to pronounce myself on this specific issue. But as you mentioned, the justice system is one of the sectors where reform has been recognised as necessary, it is one of the seven sectors of the reforms process.

A series of proposals have, of course, come out in that sector like all the others in the second plenary which are well documented and the judiciary is also one of the sectors that the EU is willing to support in the new governance programme which has just been passed. This is the next hurdle in the approval process at our headquarters which we hope to get approved in the next couple of months, March or April hopefully.

And we have specifically chosen to compliment the judiciary itself with the oversight institutions, the auditor general, the Directorate on Corruption and Economic Offences (DCEO) and the parliamentary Public Accounts Committee because we believe that this makes a whole justice system…And we look forward to the NRA moving ahead with some of the key reforms that have been decided on the judiciary. We are ready to provide financial and technical support for it.

LT: Lately there has been talk of moves to give a blanket amnesty for the First Lady, Dr Thabane and even Lieutenant General Tlali Kamoli and other soldiers who are in custody for various crimes as one of the processes leading to Prime Minister Thabane’s departure. Do you think this is an advisable step?

CM: You may remember that in my very first public speech in Lesotho shortly after my arrival… I advocated for a truth and reconciliation commission (TRC) or a similar mechanism. The title does not matter, but the mechanism must allow for reconciliation and that has been my position throughout. I still maintain that this would be useful for Lesotho.

Lesotho has seen recurrent political violence with victims, families have been bereaved and I believe addressing this history of political violence comprehensively and promoting reconciliation remains an important objective for the reforms process. It is, if I am not mistaken, one of the recommendations of the second plenary and this is the time to implement it. I personally don’t think that the blanket amnesty, which essentially absolves everybody from everything, is the right way to achieve reconciliation because they say forgiveness is the privilege of the victim and it requires that the truth becomes known.

That doesn’t concern one or the specific cases, I think this is a problem that has a long history that needs to be address comprehensively and such a mechanism which will of course require time and patience will be the way forward. I think in such situations there are no shortcuts.

LT: You indicate that you are setting aside funding for the National Reforms Authority (NRA). Are you at liberty to say how much this funding is? Also, the reforms process has dragged. We know that SADC had intended that by May 2019 constitutional and security reforms should have been fully implemented, that is the initial deadline that they gave and we are way past that. Is there any indication in your discussions with the various stakeholders as to what exactly will be achieved this year, what will fully implemented by the time we get to the end of this year? Will we see anything or will it be more discussions and more meetings and things like that?

CM: I would have to be a prophet to give you an answer to that but what I can say is I would like to see work start. I wish they proceed in the following manner:

Identify a number of measures which are straightforward, simple and uncontroversial and can be implemented quickly to make some progress and show the public that the reforms are continuing;

Secondly, they must look at the recommendations of the second plenary, if I am not mistaken its about 60 pages; it’s a fairly substantial document…and pick out those which can stabilise the political foundations; parliamentary reforms, floor crossing and appointment of key appointments in senior positions in public service, judiciary and the armed forces.

It would be nice to see these things are done by the close of this year or at least by the beginning of next year. I believe that is possible; that’s what I would like to see. This is important because the next elections are scheduled for 2022 and the closer you come to elections; it will be difficult to implement key reforms…campaigning is competition, that is how democracy works. Inevitably, it will be much harder to bring politicians together during that time and make sure that they actually corporate for a common goal; which is essential because some of the reforms require legislation, some require constitutional amendments and to pass you need a qualified majority in the house and that means you must be able to work together across the political party divide. And that must be done soon. It is very difficult to do that during campaigning time. In particular, we wish those reforms, particularly those concerning the stability of the political system, have been passed before we go to the next election.

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