Matlanyane projects revenue target shortfall
RELEBOHILE TSOAMOTSE
MASERU – There was low utilisation of the overall budget in the first quarter of the 2022/2023 financial year as major capital projects delayed, Finance and Development Planning Minister, Dr. Rets’elisitsoe Matlanyane has said. A moratorium on hiring of new staff in order to contain the wage bill also contributed to the low budget utilisation, in turn, resulting in underperformance. As a result, projections point to the fact that revenue will underperform by M2.4 billion to register M22.7 billion. This as tax revenue is set to miss its target of M11 billion by 17 percent.
Matlanyane made the pronouncements on Wednesday this week as she presented the mid-term review budget in Parliament. She said while progress has been made on some indicators, they have had to revise projections downwards as exchange rates remain volatile while interests are declining. “The GDP growth performance partly reflected the weak macro-economic fundamentals in 2022 as well as external supply chain disruptions, quarterly GDP statistics point that real GDP has slowed once again in the first half of the year.”
As a result, Dr Matlanyane said, there will be a strategic re-allocation of resources in the second half of the current financial year resulting in a total of M580 million from the underutilised capital projects being transferred to other projects with tangible and immediate impact on the nation’s development. Matlanyane did not name the projects but said funds are being redirected to accelerate the progress of high impact initiatives.
“This infusion of additional funding is designed to expedite project completion and further propel their advancement,” she said. The minister also noted that in the first half of the financial year, cabinet approved an allocation of M500 million to address outstanding government arrears “underscoring government’s commitment to serving these debts.”
Clearance of government’s arrears, she said, is vital for financial stability, economic growth and the overall effectiveness of government operations while also upholding principles of good governance and responsible fiscal management. Only arrears that are properly documented and confirmed as legitimate will be paid. In addition to the M500 million allocation, advances were made from the contingencies fund to address critical government operations that fell outside ministerial budgets.
The Ministry of Local Government, Chieftainship, Home Affairs and Police received M40.1 million for the procurement of passport booklets, while the Ministry of Defence was allocated an extra M18.8 million so as to accommodate rising annual aircraft insurance premiums. There was also an additional M2.6 million for supporting local government elections specifically towards covering aircraft fuel for transportation to remote areas.
On top of that, the Ministry of Public Service, Labour and Employment secured M8.1 million used for the implementation of the performance management systems and payroll systems maintenance. Lesotho Electricity Company (LEC) also took a huge chunk from the Ministry of Natural Resources, receiving M57.7 to assist it towards payment of an outstanding debt related to the supply of electricity from Mozambique. Natural Resources also received an additional M144 million which was used for the refurbishment of the Muela Hydropower Plant.
