By Neo Kolane
Youth grouping BachaShutDown Movement has joined the growing chorus of criticism of finance minister Retṧelisitose Matlanyane’s recent statement which saw her paint a bleak picture of the state of the country’s economy.
Matlanyane, among others, said the government is in debt and unable to create new jobs as many public servants were offered jobs without following proper procedures.
The state of the economy of Lesotho currently is not appeasing due to rampant nepotism that has clouded the government. Corruption in procurement activities is at its high web. This was evident when implementing projects such as those related to COVID command centre, NACOSEC.
Matlanyane singled out poor asset management like properties, vehicles, yellow plant and land adding that funds were being committed to unplanned activities resulting in excess spending.
She said commitments made outside the budget, overstated prices of goods and services, foreign businesses that do not pay taxes are other factors that have led to the current situation.
“There is a large public service whose wage bill is about 50 percent of the recurrent expenditure, revenue does not cover obligations of the government and expenditures far outweigh revenue.
“There is low capital spending and low growth which have led to high unemployment especially amongst the youth,” she said.
Matlanyane said with the revenue amounting to M19.7 billion which the government has said will be available, there will be a shortage of M1.1 billion. One of the reasons, she added, is that bills were in the pipeline during the session of the 10th parliament which were yet to be passed into law.
“The revenue collected up to December 2022 is M11.6 billion while the recurrent expenditure is M11 billion explained that the economy’s state from April to December.
“The government has shortage of ministry due to not having enough budget allocation for the year 2022/2023 which amount to M1.3 billion.
“The issue that the government is unable to carry the responsibility has been visible since the year 2014 although there are certain things that have not been paid for since that year, therefore the government is increasing expenses even though the government is already in debt from the previous year’s making the government operate in arrears,” she said.
Weighing in on the minister’s statement, BachaShutDown insisted the country’s economy would thrive if innovative businesses run by the youth would be assisted by the government.
It minced no words as it accused government of lacking interest in enhancing the innovative businesses invented by the youth.
One of the youth, who is also an economist and chief executive officer of Phuthalichaba Savings and Credit, Tebello Tjapela yesterday described Matlanyane’s state of the economy speech as ‘just a lot of hot air’ which falls short of illustrating the problems that have gripped the country’s economy.
“The economic problems facing the youth are not being addressed, especially rising unemployment. The government has reduced the number of ministries from 38 to 15 and by doing so, the government has reduced spending by M60 million on ministers’ salaries and benefits.
“The issue of nepotism and hiring civil servants politically also had to be addressed seriously. It should be scrutinised as to how many will be affected by the exercise.
“We thought that projects that assist the youth both – skilled and unskilled – would be started as we had hoped. The government should attract investors that will possibly create jobs for the youth as we know that the country’s economy is in a bad state.”
Among those who have hauled the minister over the coals is a retired economist who dismissed the statement as pure sensationalism devoid of facts.
“Loans procured in the last 5 years were to finance water development including to supply potable water to 1.1 million Basotho from Botha Bothe to Quthing, Mpiti Sehlabathebe, Ramarothole, procurement of vaccines, improvement of the Lesotho investment climate, build the Belo and Tikoe factory shells (using mostly domestic debt). Does the Minister say all these were wasteful spending?
“A country’s debt sustainable risk is not measured by percent increase between two points in time. It is measured professionally by several risk indicators which the government examines each time a budget speech is presented to parliament. Lesotho compiles its debt sustainable analysis each year and there has never been a time between 2017 and 2022 when debt judged to be unsustainable. The use of this informal and unprofessional metric by the minister was intended to be unduly sensational.”
