{"id":15868,"date":"2022-06-12T07:40:26","date_gmt":"2022-06-12T07:40:26","guid":{"rendered":"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost"},"modified":"2022-06-12T08:17:51","modified_gmt":"2022-06-12T08:17:51","slug":"imf-slates-african-games-cost","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost","title":{"rendered":"IMF slates African Games cost"},"content":{"rendered":"

Africa-Press – Lesotho. <\/strong><\/span>The International Monetary Fund (IMF) has given the thumbs down to government\u2019s controversial plan to borrow a staggering M2.4 billion to finance infrastructure for the 9th African Union Sport Council (AUSC) region 5 games scheduled for December next year.<\/p>\n

To host these games, the Government has to construct a number of major infrastructure namely; a multi-purpose indoor sports centre to accommodate all sports codes and a 20,000-seater stadium that will host football and athletics at Lepereng in Maseru.<\/p>\n

It also has to build accommodation facilities to house athletes during the games at the National University of Lesotho (NUL), which has been earmarked as the games village.<\/p>\n

On September 10, Finance Minister Dr Moeketsi Majoro recommended that cabinet approves negotiations of the loan agreements and guarantee agreements between the government and an international company Property 2000 (PTY) LTD for a M2.45 billion loan, to finance construction of these facilities.<\/p>\n

Public Eye<\/b><\/p>\n

can report that an IMF team led by Joseph Thornton and IMF Mission Chief for Lesotho has poured cold water on the idea. The IMF team visited Maseru between November 6 and 13, 2019 to discuss recent developments and the economic outlook in the context of its regular surveillance activities.<\/p>\n

The team found that while government\u2019s efforts to maintain economic stability had ensured that international reserves remain at adequate levels, \u201cLesotho continues to face challenges in adjusting to a context of lower Southern African Customs Union (SACU) revenues\u201d.<\/p>\n

With sluggish growth limiting the potential for domestic tax receipts, it said an improved outlook for government finances required strong policy action on spending.<\/p>\n

In this context, the IMF team indicated that effective expenditure controls, including careful vetting of new projects and their financing, would be important now \u201cmore than ever\u201d.<\/p>\n

\u201cThis particularly applies to large projects, such as the proposed new sports facilities, which have major implications for the country\u2019s debt burden and fiscal sustainability. Investment should support the achievement of key development objectives, including growth, job creation, and poverty reduction,\u201d Thornton said.<\/p>\n

When he recommended that cabinet approves negotiations of the loan agreements, Majoro also invited cabinet to note that, while he supported the initiative to host the 2020 AUSC Region 5 games, it was worth noting that \u201cthere are huge risks involved in the acquisition of the proposed infrastructure\u201d.<\/p>\n

He indicated that this was due to the approach used in the infrastructure financing model and the timing of the construction of the infrastructure in which a number of key assessment tools, procedures and strategies were flawed.<\/p>\n

He said given the size and magnitude of the proposed infrastructure and the complexity of the coordinating multiple stakeholders and the long-term nature of this project, a feasibility study should have been conducted as it could have served a critical function of independently evaluating and assessing the viability of the project.<\/p>\n

Therefore, Majoro added, \u201cthe non-existence of a feasibility study has compromised the ability of the Ministry of Finance to determine the affordability, viability, value for money, proper risk assessment, proper project cost, financing model assumptions, the maintenance and sustainability of the infrastructure\u201d.<\/p>\n

He told cabinet that procurement and sourcing procedures had been undermined and explained that expression of interest rather than the issuance of requests for proposals was used in sourcing the developers and contractors. Majoro also expressed concern over the project\u2019s implementation and timeliness.<\/p>\n

\u201cGiven the remaining time to December 2020 and the massive infrastructure being proposed, the time left for construction of this infrastructure brings into doubt the quality and professionalism of works that will be done and achieved,\u201d he said.<\/p>\n

He further showed that the magnitude of debt to be incurred for the project \u201cpushes the debt stock towards upper limits of sustainability\u201d. This, he said, would limit the government\u2019s ability to acquire debt for fiscal operations in future.<\/p>\n

\u201cDeferring the construction of 20,000-seater stadium and hosting the games with the existing and refurbished Setsoto Stadium would exert less pressure on the prevailing Government fiscal position,\u201d he said.<\/p>\n

\u201cAll the above concerns immediately render this project risky,\u201d Majoro warned. His concerns seemed to have been informed by an August 8, 2019 memo from his ministry\u2019s legal department to the Principal Secretary (PS).<\/p>\n

Among other serious reservations, the memo categorically detailed the flaws and discrepancies in the grand projects and advised of \u201ccatastrophic consequences\u201d to the fiscus should the plan proceed.<\/p>\n

Finance ministry experts warned that \u201cthe project is flawed with procedural discrepancies, with threatening fiscal, legal and regulatory implications\u201d. Despite Majoro and his ministry\u2019s stern warnings, cabinet went ahead and approved negotiations for the loan agreements.<\/p>\n

The IMF team also advised that the constrained environment for government finances \u201cimplies a need to keep public sector wages in check until such time as efforts to increase the size of the economy through private-sector driven growth can bear fruit\u201d.<\/p>\n

In 2016, the government wage bill rose to 23 percent of Gross Domestic Product (GDP) \u2013 the largest in sub-Saharan Africa. Government has tried in vain in the past years to contain the wage bill but the IMF team said some savings may be generated by eliminating ghost workers.<\/p>\n

It said other current expenditures, such as travel and foreign embassies, should be reviewed with the aim to \u201celiminating waste\u201d. Thornton said: \u201cAt the same time, greater efforts should be made to ensure that budgetary allocations are sufficient to protect the most vulnerable, including from the effects of recent poor harvests.<\/p>\n

Last month, the Chairman of the parliament\u2019s Public Accounts Committee (PAC), Selibe Mochoboroane, reportedly said the committee\u2019s preliminary investigations revealed that government has spent M200 million on international travel in the past eight months alone.<\/p>\n

For More News And Analysis About Lesotho<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Lesotho. The International Monetary Fund (IMF) has given the thumbs down to government\u2019s controversial plan to borrow a staggering M2.4 billion to finance infrastructure for the 9th African Union Sport Council (AUSC) region 5 games scheduled for December next year. To host these games, the Government has to construct a number of major […]<\/p>\n","protected":false},"author":84,"featured_media":15867,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,8,17,16],"tags":[233,246,314,245],"class_list":["post-15868","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-homepage-english","category-sport","category-twitter","tag-africa-press","tag-africa-press-lesotho","tag-african","tag-lesotho"],"yoast_head":"\nIMF slates African Games cost - Lesotho<\/title>\n<meta name=\"description\" content=\"The International Monetary Fund (IMF) has given the thumbs down to government\u2019s controversial plan to borrow a staggerin ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"IMF slates African Games cost\" \/>\n<meta property=\"og:description\" content=\"The International Monetary Fund (IMF) has given the thumbs down to government\u2019s controversial plan to borrow a staggerin ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost\" \/>\n<meta property=\"og:site_name\" content=\"Lesotho\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2022-06-12T07:40:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-06-12T08:17:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/lesotho\/sites\/62\/2022\/06\/postQueueImg_19-62a5a11a0432b.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/lesotho\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"IMF slates African Games cost\",\"datePublished\":\"2022-06-12T07:40:26+00:00\",\"dateModified\":\"2022-06-12T08:17:51+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost\"},\"wordCount\":945,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/lesotho\/sites\/62\/2022\/06\/postQueueImg_19-62a5a11a0432b.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Lesotho\",\"African\",\"Lesotho\"],\"articleSection\":[\"all news\",\"homepage-english\",\"sport\",\"twitter\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost\",\"url\":\"https:\/\/www.africa-press.net\/lesotho\/all-news\/imf-slates-african-games-cost\",\"name\":\"IMF slates African Games cost - 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