No IMF bailout yet


Ntsebeng Motsoeli

THE government has still not secured the financial bailout it had hoped to receive from the International Money Fund (IMF) by the end of last month.

This was revealed by the Finance Minister, Moeketsi Majoro, in an exclusive interview with the Lesotho Times this week.

The government and the IMF have been in discussions since June this year for the bailout from the IMF and other development partners which will help to reduce the budget deficit and boost foreign currency reserves.

Dr Majoro has previously expressed confidence that an agreement would be reached by the end of August but this has not been the case and it is not clear whether or not a deal will be reached.

Dr Majoro this week said the negotiations were continuing and it was premature to say when they could be concluded.

“The interaction with the IMF is continuing and it is premature to respond to any of your questions at this point,” Dr Majoro said.

Last month, the Finance minister told this publication that he was in discussions with the IMF and other partners “to put together a package of measures that would ease the current situation while protecting the vulnerable segments of population”.

“Our target to have concluded discussions at the end of August remains. We do not anticipate any difficulty concluding an arrangement with the IMF and other partners.

“The type of support we are seeking is called foreign currency reserve support. It differs with project support in that it supports the financing of (foreign currency) reserves build-up as well as the budget and deficit.”

He however, did not disclose how much the government had asked for, saying the size of the bailout package would be determined by both parties during the talks.

The government-IMF negotiations are being held at a time when the country’s increasingly restive workforce has either struck or threatened to strike to force the government and other employers to award them salary increments that will cushion them against the increases in the prices of goods and services.

Teachers across the country have embarked on a strike to force government to address their long-standing grievances for salary increments and better working conditions.

Three weeks ago, textile workers in Maseru and Maputsoe went on violent strikes to press government to legislate a M2000 minimum wage.

Early this year, Dr Majoro announced a four percent salary increase for civil servants but the latter are far from content and some of them are still on strike to force the government to award them another wage increment.

Dr Majoro has however, indicated that it would not be feasible to award the wage increments due to the poor state of the economy.

The IMF has already told the government to implement tough fiscal measures to improve the economy.

Chief among these is the need for the government to reduce the high public wage bill, undertake public financial management reform as well as implement the multi-sector reforms that were recommended by the Southern African Development Community (SADC).

The IMF has also advised the government to award performance-based salary increments. The IMF prescriptions are inimical to the civil servants and other workers’ demands for wholesale wage increments.

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