Phase One shortfalls blight promising NSDP II blueprint

NEO SENOKO

MASERU – While the blueprint of Phase II of the National Strategic Development Plan (NSDP) comes with wide opportunities towards economic stimulation in Lesotho for the next five years, a dismal performance in Phase One of the project still leaves a bitter taste of skepticism for many people.

NSDP II targets the creation of 49.3 jobs of which 23.09 jobs to be produced by the four identified productive sectors of agriculture, manufacturing, tourism and creative industries as well as technology while 26.2 will come from the rest of the economy.

This employment target will be achieved if the economy grows gradually from the current low growth position of 0.4 percent to about 5 percent in 2022/23. The growth target is the minimum required to sustain poverty reduction and achieve NSDP II objectives.

Substantial increases in investment from the current 28 percent to at least 50 percent will also be required to meet the target level of employment and economic growth.

Furthermore, the growth will reduce the number of people living below the poverty line by six percentage points from 49.8 percent to 43.8 percent. It will further increase households’ consumption from M27.8 million to M38.2 million while real GDP is projected to increase from M34.8 million to M51 million by the end of the NSDP II.

NSDP I that was implemented in the 2012/13 fiscal year failed to make a desired impact, thus leaving many people wondering whether Phase Two will make any remarkable impact.

The NSDP I which ended in 2016/17, among other things, was hoping to facilitate economic growth through employment, infrastructure development, innovative technology as well as improving public health.

But few targets, if any, were reached through the initiative. Unemployment figures have sky rocketed from 24 to 28 percent in the past four years, according to the World Bank statistics.

Economic growth from 2015 to 2017 averaged 1.7 while a 0.6 percent of GDP revenue contraction was experienced in 2017/18 fiscal year as a result of a contraction in agriculture output and other fiscal challenges.

Furthermore, the country is still lagging behind on the side of innovative technology, with the latest United Nations Report on e-trade revealing that nearly four out of every 10 Basotho cannot use the internet access to which is limited by poverty.

The report says 35 percent of the country’s population does not know how to use internet with 15 percent claiming they do not need internet.

Minister of Development Planning Tlohelang Aumane had admitted earlier that the NSDP I failed to meet the set targets, citing political instability as a major constraint.

Other barriers, according to the final NSDP II document, include the chronic political uncertainty and politicisation of civil service management, decrease in donor support as well as an institutional framework and lack of co-ordination.

The minister, however, has expressed commitment towards ensuring the success of the Phase II of the project yet to be launched.

“Our history shows that even though Lesotho has a long history of national development planning, the implementation of plans has been weak or progress made is slower than anticipated.

“Therefore, special attention was given to this issue, thus strategies and institutional innovations for addressing core implementation challenges are now covered,” Aumane said in a statement contained in the Phase II of the NSDP.

Under the theme “in pursuit of economic and institutional transformation for private sector-led job creation and inclusive growth,” the NSDP II aims to transform Lesotho from a consumer-based economy to a producer and export-driven economy.

It serves as the blueprint for all development efforts over the next five years and will implement the Sustainable Development Goals (SDGs), the African Union Agenda 2063 goals and Vision 2020 which falls under Phase I of the project.

Phase II also emphasizes private sector development and gives priority to pursuing people-centred development.

Four key strategic goals, referred to as key priority areas (KPA), have been articulated to foster job creation and inclusive growth and further reduce poverty.

Under the key priority areas, the NSDP II will focus on enhancing inclusive and sustainable economic growth and private sector job creation. It will also focus on strengthening human capital, building enabling infrastructure as well as strengthening national governance and accountability systems.

“NSDP II anchors jobs and inclusive economic growth on the four productive sectors of agriculture, manufacturing, tourism and creative industries including technology and innovation.

“Goals will only be achieved if the economy is supported by macroeconomic stability, a pre-condition for economic growth and private sector development,” the NSDP II document added.

Given the macroeconomic policy constraints, Lesotho can only overcome poverty and unemployment by transitioning to a highly efficient economy and compete with others in the region.

Manufacturing of textiles and apparel remains the dominant sector in the country in terms of driving economic growth and employment since 1990s.

 

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