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Kingdom of Lesotho
Lesotho Budget speech 2005/2006

Honourable Timothy T. Thahane, Minister of Finance and Development Planning

Parliament of the Kingdom of Lesotho

16 February 2005

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Madam Speaker
Allow me to pay my respects to:

His Majesty King Letsie III and Head of State
The Right Honourable the Prime Minister and Head of Government
The Honourable Deputy Prime Minister and Leader of the House
The Honourable President of the Senate
My Colleagues, Honourable Ministers of His Majesty’s Government
Honourable Members of both Houses of Parliament
Excellencies Heads of the Diplomatic Mission and International
Organisations
Distinguished Senior Government Officials
Distinguished members of the Media
The Entire Basotho nation Across Lesotho and Abroad
Ladies and Gentlemen

Madam Speaker and Honourable Members,

Introduction

  1. Once again, it is that time of the year when, on behalf of the Government, I must report on its economic and financial stewardship for the last year and to outline the way forward and the challenges the nation faces as it strives:

    • to achieve its National Vision 2020 and goals;
    • to implement the strategy for poverty eradication and wealth creation (PRSP);
    • to accelerate economic growth;
    • to create jobs, especially for the young people;
    • to expand access and improve the quality of education and health services for all Basotho; and,
    • to scale up the fight against HIV and AIDS.

Steady Progress Being Made

  1. I am happy to report that the foundations for sustainable development laid two years ago continue to be firm. They are being extended and strengthened. Steady progress is being made towards the attainment of our National Vision 2020 which was adopted last May and the Poverty Reduction Strategy which the Government approved last December. Both documents will be published in four to six weeks. Economic growth, estimated at 3.4 percent for 2004, continues to be higher than the average for the Southern African region, although it is less than what we would like it to be. Employment in the textile sector remains strong though dark clouds are beginning to gather following the end of the Multifibre Agreement. More primary school age children have access to primary schools as a result of the abolition of school fees in the first six years of schooling. The ABC Campaign (Abstain, Be faithful, Condomise) against HIV and AIDS, Voluntary Counselling and Testing and the creation of an infrastructure for training, treatment and care of the infected and affected are being stepped up. The elderly and vulnerable, most of whom take care of more than 90,000 AIDS orphans, are receiving monthly support to meet their basic needs. Parenthetically, let me add that we should have zero tolerance for those who rob the elderly of their meagre livelihoods.


  2. Our public service reforms including reform of financial systems for effective control, accounting and auditing of Government revenues and expenditures are gathering momentum; cheats, fraudsters and corrupt officials and their business partners are being arrested and prosecuted. Courts and the Director of Public Prosecutions are working together to remove the backlog of cases. Magistrates are also being convicted, and corrupt Treasury officials fined and jailed while some businessmen in Lesotho and South Africa, who have long been depleting Government coffers, are facing the full might of the law. Audited Public Accounts have been produced regularly since 2002 and the Parliament’s Public Accounts Committee is busy examining them. During 2005 work on the backlog of annual public accounts for the period 1996/97 – 2000/01 will commence.


  3. International investor confidence in Lesotho’s political and economic management continues to increase. This year the FITCH Rating Agency has again upgraded Lesotho from B+ to BB-, driven by improvement in our policies, external debt position and sound macroeconomic management. This puts us in the same category as giants like Brazil. An example of this returning confidence is the investment by Nien Shin Company of US$100 million in the manufacture of denim fabric. The same is true for new investments in the diamond sector.


  4. In addition, last year Lesotho was selected by the United States Government, together with 15 other countries, from a list of over 70 low-income countries to negotiate a five year Millennium Challenge Account Compact to provide assistance. I will report later about this program but what is noteworthy, however, is the criteria used to select these sixteen countries. They were selected on the basis of ruling justly by pursing democracy, respect for human rights and the rule of law; investing in their people through primary education, primary healthcare and policies that reduce poverty; and, implementing policies that promote sustainable economic growth through creating a better legal and regulatory environment. These policies are embedded in our National Vision 2020 and our Poverty Reduction Strategy.




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