M700 million to fight COVID-19

KANANELO BOLOETSE

MASERU – The government has made available M700 million to fight the outbreak of the novel coronavirus, which has infected over 490 000 people around the world and accounted for more than 22 000 deaths so far.  On top of the M700 million, government will also set up a relief fund to help businesses mitigate the financial impact of the disease, now known as COVID-19, finance minister, Dr Moeketsi Majoro, told Public Eye on yesterday.

“We are actually facing two disasters at the moment. In December last year government declared a national disaster in response to the deteriorating food security in the country. “Less than three months later, the government declared national emergency over coronavirus. That is the position we find ourselves in,” Majoro said. “Our development partners are coming in to help where they can but the government has already set aside M700 million to fight the coronavirus disease.

“We are in the process of setting up a relief fund to manage the financial impact of this disease,” he added. The process of assessing the potential financial impact of the disease was led by the Ministry of Planning’s Principal Secretary (PS), Nthoateng Lebona. COVID-19 first appeared in the central Chinese city of Wuhan in December last year and has since spread to nearly every country in the world.

On January 30 the International Health Regulations Emergency Committee of the World Health Organisation (WHO) declared the outbreak a public health emergency of international concern. On March 11, WHO publicly characterised COVID-19 as a pandemic. It is the first pandemic known to be caused by the emergence of a new coronavirus. Its impact has so far been most pronounced in China and Italy, which have reported the vast majority of the infections and deaths.

The disease has already taken hold of Europe, the United States and South East Asia and is beginning to wreak havoc in Africa and South America. Even though Lesotho currently has no confirmed cases of coronavirus, neighbouring South Africa, within which Lesotho is an enclave, now has over 700 confirmed and verified cases of COVID-19.

On March 18, Prime Minister Motsoahae Thabane declared a national emergency over the COVID-19 pandemic and also announced several response measures to limit the spread of the novel coronavirus. The measures included a ban on public gatherings of more than 50 people, closing of schools until April 20 and a compulsory 14-day quarantine in designated facilities at own cost for people arriving in the country from severely affected countries.

On Wednesday this week, Thabane announced that Lesotho will enforce a three-week lockdown over coronavirus. In a televised address to the nation, the prime minister said the 21-day lockdown will begin at midnight Sunday. WHO is particularly concerned at the ability of the poorest countries in the world to control the disease. In economic terms, Lesotho is one of the world’s least developed countries.

Public Eye has established that around the same time that COVID-19 started in China, in December last year, the World Bank had coincidentally just sounded a timely warning bell about the significant disaster preparedness challenges facing Lesotho. The World Bank’s investigation had found that Lesotho did not have a comprehensive financial protection strategy and the bank, accordingly, advised the government to develop and adopt a national disaster risk financing (DRF) strategy.

The bank said a DRF strategy would allow the government to identify and plan where resources for responding to future disasters would come from.The Word Bank is an international financial institution that provides loans and grants to governments of poorer countries for capital projects. Majoro told Public Eye yesterday he was aware of the World Bank report which poked holes into the country’s disaster risk management strategy. He, however, acknowledged he was not fully acquainted with the contents of the report as it was only published in December.

According to the report titled, Disaster Risk Financing Diagnostic, and published in December, Lesotho has set up only two contingency funds; one at the ministry of finance and one at the Disaster Management Authority (DMA). It revealed that Lesotho faces an estimated average annual funding gap of US$12.4 million (over M215 million) as pre-planned financial resources are less than the average annual cost of disasters. It stated the funding gap would increase for more severe events.

“The funding gap means that the GoL (Government of Lesotho) will have to rely on ex-post financing, including budget reallocation and humanitarian funding, for disaster response,” it read. It added: “While donor support is critical after disasters, both the amount to be made available and the activities to be funded can be uncertain and slow to materialise. Donor support is usually mobilised only for extreme events, which may leave the GoL financially exposed, especially for more frequent disasters.”

The report further indicated that the two funds; one at the ministry of finance and one at the DMA, “are often depleted early in the budget cycle, leaving the nation exposed when disasters occur later in the financial year” which runs from April to March 31. In light of the diagnostic, the government may want to consider, among others, developing a national disaster risk financing strategy to formalise policy priorities based on a risk layering approach and to address both budget mobilisation and budget execution.

It also recommended that the government increase the amount and improve the timeliness of resources mobilised for disasters, including through a dedicated contingency fund with clear rules for replenishment and disbursement targeted at recurrent natural disasters and building on the existing contingency funds.