IMF report reveals Lesotho wastes nearly half of public investment

A new report from the International Monetary Fund (IMF) has laid bare the inefficiency of Lesotho’s public investment system, revealing that the country generates significantly less infrastructure value from its spending than its peers. Despite consistently allocating around 10% of its Gross Domestic Product (GDP) to public investment—well above the Sub-Saharan African average—Lesotho’s economic growth remains weak and volatile.

The IMF’s Public Investment Management Assessment (PIMA), released last Friday, estimates Lesotho’s public investment efficiency gap at approximately 49% in 2019. This means the country produces only about half the infrastructure output from its investment compared to more efficient nations. The report points to ineffective planning, budgeting, and project execution as the root causes.

‘Infrastructure outcomes in Lesotho remain weak relative to the scale of investment, reflecting low efficiency and persistent implementation bottlenecks,’ the report states. Access to electricity and basic services has improved only gradually, while service quality remains uneven.

The biggest obstacle identified is poor budget execution. On average, only about half of the capital budget has been spent in recent years, with execution averaging just 53% over the past three fiscal years. The IMF warns that this persistent under-execution delays project completion, weakens service delivery, and contributes to the deterioration of the country’s infrastructure assets.

To address these shortcomings, the IMF recommends a comprehensive reform programme including stronger planning, project appraisal, multi-year budgeting, procurement improvements, and better portfolio monitoring. The report emphasizes that near-term priorities should focus on getting procurement fully operational and improving funding predictability for ongoing projects.

Article source: sundayexpress.co.ls | Image credit: GZERO Media