Lesotho’s 2025/26 budget has been critiqued for its ambiguities and failure to address deep-seated gender inequality and structural issues within the economy.
Economics lecturer at the National University of Lesotho (NUL), Ratjomose Machema, raised these concerns, emphasising that while female enrollment is higher than male at all educational levels, this advantage disappears in the labour market, signalling systemic barriers to female employment.
Speaking during the budget speech dinner this week, Machema highlighted the lack of clear strategies in the budget to promote inclusive growth, particularly in agriculture and manufacturing.
He stressed the need for value chain development and criticised the Lesotho National Development Corporation (LNDC) for not providing strategic advice on economic diversification.
He also noted that while the budget mentions the development of tourism special economic zones and the creation of investment policies to attract foreign investors, it lacks specific implementation details.
Given Lesotho’s declining official development assistance since 2010, Machema urged for robust policies to draw investments into the small economy.
Regarding public financial management, Machema pointed out the longstanding uncertainty surrounding fiscal rules and the need for a stabilisation fund for infrastructure projects that are economically but not financially viable.
He welcomed the improved domestic revenue mobilisation measures, including gradual increases in the alcohol and tobacco levy and a higher income tax threshold.
The budget’s proposal to raise the VAT registration threshold from M850 000 to M2 million was seen as a positive step for small, medium, and micro enterprises (SMMEs).
Machema believes this could help capture previously unrecorded economic activity and boost GDP diversity. He also endorsed the effectiveness of the oil levy as a revenue measure.
On monetary and fiscal reforms, Machema noted the updates to the Pensions Act and regulations, with the Central Bank of Lesotho set to consolidate and register pension insurance, although further details were limited.
Meanwhile, in her budget speech, Finance and Development Planning Minister Dr Retšelisitsoe Matlanyane painted a bleak picture of youth unemployment. Of the 760,230 young Basotho aged 15 to 35, nearly 145,087 (about 39 percent) are unemployed. Young women face even steeper challenges, with a 40.8 percent unemployment rate compared to 37.1 percent for young men, highlighting entrenched gender disparities.
Matlanyane revealed that only 31.48 percent of the youth are engaged in the labor market, with over 226,857 young people having given up on finding work. The formal sector employs just 87,849 people, while the informal sector accounts for 461,873 jobs.
She called for bridging the gap between education and employment, expanding formal job opportunities, promoting entrepreneurship, and aligning educational programs with private sector needs.
The minister emphasised the need for targeted programs for young women, who are disproportionately affected by unemployment, to foster economic growth and inclusivity.
Overall, while the 2025/26 budget offers some promising initiatives, experts like Machema argue that without clear strategies and execution plans, systemic issues such as gender inequality and economic diversification may remain unaddressed.
Seabata Mahao is a general news reporter with special focus on Business and Sports.
Started working at Newsday in 2021.
has an Associate Degree in Journalism and Media.
