Africa-Press – Lesotho. The Minister of Finance Dr. Moeketsi Majoro says 2018/19 national budget was prepared amidst the tough fiscal position confronting the country as a result of the decrease of Southern African Customs Union (SACU) revenue both in nominal and real terms among other factors.
He said this when presenting the 2018/19 budget speech to the Parliament of Lesotho on Wednesday. Majoro said Lesotho’s overall fiscal position remained weak for most of 2017/18, with sporadic spikes of shortages in cash and foreign reserves.
“Government revenue is projected to be M845.7 million below budget by the end of this fiscal year. SACU revenue recovered in part while expenditure maintained its steady path upward trajectory,” Majoro said.
He further cited that the fiscal deficit is estimated at 5.7 percent of GDP, up from budgeted 4.8 percent. The resulting deficit he said is being financed through domestic borrowing and drawn of deposits.
On the other hand, he said the Lesotho Revenue Authority is likely to miss its tax collection target by about M684.4 million. He said expenditure has kept close on target despite the shortfall in resources “and as a result the financing of deficit has put considerable pressure on our foreign currency reserves.
” He said Net International Reserves are below the target they (government) set for themselves to maintain parity with Rand. While government deposits have finally run out, he said the government will now have to be financed through new borrowing. “These are new times.
Our government has to bite the bullet and make decisions that would be painful, but which if not taken would impose political and economic chaos in Lesotho,” he said.
However, he said these challenges withstanding, the government is committed to create jobs in the private sector through a judicious mix of macroeconomic and structural policies.
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