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Economic Commission for Africa

Exploring the PRSP Process in Lesotho:
Reflections on Process, Content, Public Finance, Donor Support and Capacity Need

Benjamin Roberts, Human Sciences Research Council (HSRC)

3-4 December 2003
Addis Ababa, Ethiopia

SARPN acknowledges the copyright of the UNECA for this report.
It was downloaded from the ECA website:
This report was presented at the Third Meeting of the African Learning Group on the Poverty Reduction Strategy Papers, organised by the ECA.
The full set of reports can be accessed at
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Executive Summary

This report forms part of the latest in a series of annual assessments on the experiences of countries in sub-Saharan Africa with the Poverty Reduction Strategy Paper (PRSP) approach. Commissioned by the Economic Commission for Africa (ECA) as an input into the annual PRSP Learning Group meeting, the report essentially seeks to assess developments in relation to five thematic areas: (i) the PRSP process itself; (ii) content of the PRSP; (iii) public finance aspects of the PRSP; (iv) the realignment of donor policies and resources towards the PRSP; and (v) capacity building. The principal findings in relation to each of these issues are outlined below.

The PRSP Process

In Lesotho, participation in the PRSP process is broadly acknowledged as having been legitimate, extensive and of high quality. The participatory nature of the PRSP and National Vision formulation processes represents one of the first occasions in the history of conceptualizing development policies and strategies in Lesotho that all stakeholders have come together as a unified team. New and more open dialogue has been facilitated both within the Government of Lesotho (GOL), and between government and parts of civil society, donors and the private sector. This is promoting recognition of the different participating actors as key stakeholders in Lesotho’s development and an appreciation of the wideranging skills that each has brought to the process. It has also served to impart technical skills and increase awareness at both the central and local levels that policy making does not have to be conducted in a top-down manner. The PRSP community consultations (April-May 2002) represent the first salient endeavour by national government in Maseru to consult directly with a geographically spread sample of communities about critical developmental challenges, the scope of which makes Lesotho one of the most consultative PRSP processes in Africa to date.

Despite the impressive nature of the consultation process, the quality and scope of the material has been negatively affected by rather superficial knowledge of participatory techniques among some facilitators, insufficient attention to reporting protocols and analytical strategies, and the under-representation of urban areas. Participation in the PRSP process in Lesotho has also been constrained by: (a) the poor representation of the private sector during the early stages of the process, (b) the slower than anticipated PRSP finalization process, with almost three years having elapsed since the submission of the IPRSP, and (c) the increasing signs of ‘participation fatigue’ especially for representatives of civil society organizations and the private sector. A major challenge now facing the country as it heads towards implementation is to move away from ad hoc forms of consultation to more institutionalized forms of collaboration and dialogue with national stakeholders.

The Content of the PRSP

Despite the existence of representative and reliable quantitative and qualitative household data, the ability to construct a poverty profile, which analyses the determinants of poverty, as well as its gender, regional and other dimensions, has been constrained by a number of structural and human factors. Fortunately, the PRSP process in Lesotho would appear to have provided substantial impetus to improve the poverty information and knowledge base. It is therefore anticipated that the country’s information base will improve markedly as future rounds of currently planned surveys are completed and the use of participatory tools is scaled up. The poverty diagnostics chapter of the draft PRSP acknowledges the multidimensional nature of poverty. Apart from a conventional money-metric and absolute approach to the definition of poverty, founded on the specification of expenditure-based poverty lines, district level estimates of the human development index are provided in addition to the perceptions of poverty as expressed by different social groups, parliamentarians, CSOs and the private sector. Although the various policy prescriptions contained in the draft PRSP have yet to be consolidated, those strategies that correspond to the priority public actions emanating from the community consultations have been clearly identified and should inform the prioritization and sequencing of the interventions.

At the time of completion of the I-PRSP in December 2000, discussions were already underway between Lesotho officials and the IMF on economic developments and policies, and in March 2001 the Fund approved a three-year arrangement under the Poverty Reduction and Growth Facility (PRGF) to the value of SDR 24.5 million (about US$35 million). There appears to be a high degree of consistency between the broad objectives, macroeconomic projections and targets, as well as structural measures articulated by Lesotho’s PRGF economic programme and the I-PRSP. Lesotho’s economy is considered to be performing well under the PRGF supported programme, in spite of the stresses imposed by the humanitarian crisis in the region and some fiscal slippages in late 2002 and early 2003. However, as the country nears the finalization of its full PRSP, it is important to examine whether the proposed macroeconomic framework contained in the draft report and PRGF programme are equally as consistent. Preliminary analysis indicates that while there remains a relatively high level of consistency between the economic programme under the PRGF arrangement and the draft PRSP in relation to broad objectives and structural measures, there is some divergence with regard to macroeconomic projections and targets.

Lesotho has the fourth highest HIV/AIDS prevalence rate in the world after Botswana, Zimbabwe and Swaziland. Of these countries, Lesotho is the poorest and it is this pervasive poverty together with social dislocation due to male and female migratory labour that are regarded as the principal drivers of the pandemic in the country. It is therefore important to note that HIV/AIDS related issues have received high coverage in the draft PRSP. In particular, the strategy successfully elucidates the linkages between HIV/AIDS and poverty in the country, as well as provides some data on seroprevalence rates. Vulnerable groups have also been identified and estimates of the number of AIDS orphans in Lesotho are included. The ambitious target of reducing HIV prevalence to 25 percent by 2007 is also established as a first step in fighting the pandemic. The effective incorporation of child and youth issues in the draft PRSP is a salient development. Unlike many other countries in southern Africa, Lesotho has succeeded in prioritizing policies and programmes directed at addressing child and youth poverty and promoting the rights of these groups. This was achieved through the establishment of the Child and Youth thematic Group, which involved the direct representation of children in developing a logical framework matrix and preparing a position paper that built upon consultations in 2002 to capture the voices of children and youth.

The proposed poverty monitoring system articulated in Lesotho’s PRSP attempts to build on some of the concerns that arisen from countries that are already implementing their PRS. The implementation matrix has adopted a ‘monitoring chain’ framework, which will enable policy-makers to track the effect of public action through the input-output-outcome-impact stages. Due to extreme time pressure, consultation in the development of indicators has been more limited than would otherwise be the case, and following submission, increased dialogue will be needed with sectors and other stakeholders to ensure that the indicators selected can appropriately track changes during PRS implementation. The selection of indicators for monitoring the implementation of the PRSP has been strongly determined by the nine PRSP priority sector areas. In addition, care has been taken to ensure that the indicators will accommodate the monitoring and reporting requirements of both the National Vision and the Millennium Development Goals (MDGs).

Public Finance and the PRSP

At this juncture the multiple strategies contained in the draft version of the full PRSP have not been adequately prioritized and sequenced. While this is largely attributable to the absence of the comprehensive costing at the time of release, it is important that, at the very least, a first attempt at producing a more streamlined and focused set of measures be undertaken prior to submission of the final draft. Doing so would enhance the value, credibility and realism of the policy document. The ability of the Government to finance the country’s poverty reduction strategy is constrained by the difficulty associated with raising revenues, as well as institutional and capacity limitations. The scaling up of current public sector reforms may however provide some space for targeted medium-term investments. Realistically, the resource envelope is still likely to be insufficient, hence the critical role that the private sector and development partners will need to play in fulfilling the pro-poor development mandate enshrined in the National Vision and MDGs. A number of possible risks can be identified that may frustrate the successful implementation of the PRSP priorities. These include the failure to re-align existing allocations, an inability to secure full financial, political and bureaucratic support behind the public sector reforms, continued vulnerability and low levels of official development assistance, and the devastating impact of the HIV/AIDS pandemic.

Donor Harmonization

Prospects are good that the PRSP and the complementary National Vision process and Public Sector Improvement and Reform Project (PSIRP) will foster stronger bilateral partnerships and better coordination amongst development partners, especially those that are resident in the country. Historically, donors in Lesotho have tended to operate in a rather compartmentalized manner, resulting in unnecessary fragmentation, projectization and duplication. Nonetheless, there is a shared feeling amongst stakeholders that the donor community as a whole has strongly embraced the principles of the PRSP approach. Donors have been active participants in Lesotho’s PRSP preparation process in terms of both financing and facilitation, and have indicated their intention to align their assistance programmes to support the PRSP. Apart from jointly financing PRSP activities through the establishment of a poverty fund account, they have actively participated in various fora (TWG, SWGs, etc) and played a salient role in the provision of technical assistance and policy advice. An initiative is currently underway to establish a Joint Programme of Action amongst UN agencies in Lesotho to respond to the needs and priorities contained in the PRSP in a unified and coherent manner, thereby maximizing the effectiveness of the limited levels of technical resources and official development assistance that are available at present. However, despite noble beginnings, there is a need to improve donor coordination and transparency. This is critical, since the resources required to finance the implementation of Lesotho’s poverty reduction strategy are unlikely to be achieved without concessional finance from donors.

Capacity Building

Capacity constraints remain a particular problem in Lesotho and represent a real challenge to the implementation of the PRSP. Inadequate skills, lack of suitable institutions and poor incentive structures have weakened development planning and administration, and is often cited as the rationale for the lack of effective and efficient implementation of projects in Lesotho. Administrative capacity is relatively weak and there is a strong expression of need in relation to technical capacity, particularly analytical, information technology and basic writing skills. Notwithstanding the long history of research and data gathering in the country, Lesotho has been characterized by the absence of a culture of evidence-based policy making. Monitoring and evaluation capacity is consequently limited in most sectors, especially in areas related to poverty reduction. Compounding the problem is a high turnover of skilled personnel, which is related to political instability during the 1990s, poor salary levels, inadequate opportunities for career progression and job satisfaction, as well as increasing impacts of the HIV/AIDS pandemic. The draft PRSP does not devote much attention to the capacity of different development actors to effectively implement the wide-ranging set of measures and policies. Moreover, a discussion of the potential risks that may influence the operationalization of the recommendations contained in the Poverty Monitoring Master Plan is notably absent. Nonetheless, as the PRSP formulation process nears conclusion the focus is increasingly on capacity building and utilization to ensure that the PRSP has a sustained impact on poverty in Lesotho.

The strengthening of individual and institutional capacity is going to be crucial to the successful attainment of poverty reduction in the country. While much is being done to assist in improving data availability and quality in Lesotho, especially through the efforts of donors, the institutional and individual capacity required for monitoring and evaluation of the PRSP remains less well developed. While the government is committed to establishing a Poverty Monitoring and Evaluation Unit (POMECO), plans for its formation have been ongoing for over two years. In order to ensure that the PRSP policies and strategies have the desired poverty reducing impact, the office needs to be established and capacitated as a matter of urgency. In particular, the office needs to be staffed by a multidisciplinary team that is adequately qualified in poverty monitoring, measurement and analysis. Further technical assistance will be required from development partners to ensure that this is realized and to avoid a scenario where the PRSP ends up being a well-conceived strategy that does not get implemented.

Implementing the PRSP must be based on delivery from the multi-sectoral actors and cannot be done by the MoDP. The different capacities of different sections of society will need to be mobilized, strengthened or built. Apart from the public sector, this should equally be seen to include civil society and the private sector, especially given the participatory development approach adopted during the PRSP preparation, which recognized the complementary role of different actors in the development process.

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