Govt’s M1 billion debt

Mohloai Mpesi

The government owes more than M1 billion to suppliers, finance and development planning minister, Dr Retšelisitsoe Matlanyane admitted yesterday.

Matlanyane was responding to a parliamentary question lodged by the deputy leader of the Lesotho Congress for Democracy (LCD), TÅ¡eliso Mokhosi.

“The total amount owed to Basotho companies is M1 151 829 829.38,” Matlanyane told parliament.

“M301 886 529.87 is already in the treasury and was carried forward from last year. The arrears which are still in the ministries amount to M849 946 299. 51,” she added.

She also told parliament that “payments are intended to have been made before the end of the financial year in March 2023.

But another Member of Parliament (MP), Maletsema Letsoepa, asked how the government would be able to pay the suppliers when Matlanyane had mentioned that the government does not have money.

“The minister said the suppliers will be paid before this financial year ends but a few minutes ago she explained that the government does not have money,” Letsoepa said.

She added: “Basotho deserve to be told the truth because this (Matlanyane’s statement) is going to raise their hopes that they will soon get the money while there is no money.”

Matlanyane responded: “In my statement I said the plan is to pay all the debts before the end of the financial year.”

The news comes in a time of depressed real and predictive growth and increased debt levels for Lesotho as economic problems locally and globally weigh down on the country’s economy.

On Wednesday, the governor of the Central Bank of Lesotho Dr Maluke Letete, said the domestic economy remains weak as reflected by the decline in the indicator of economic activity.

Letete said heightened inflationary pressures continue to prevail.

In the third quarter of 2022, he added, the stock of public debt, rose to 58.2 percent of the Gross Domestic Product (GDP), from 54.3 percent in the previous quarter.

Public debt liability is a major government liability and a key sustainability issue for the government.

The increase in the debt stock reflects the additional domestic borrowing, net new disbursements and the effects of the depreciation of loti against the major currencies in which external loans are denominated.

Public debt comprises domestic and external borrowings.

Matlanyane, a former governor of CBL, told parliament yesterday that the outstanding public debt as at October 2022, amounted to M22.195 billion.

She said outstanding external debt was M17.583 billion while domestic was M4.612 billion.

The external loans are raised from bilateral, multilateral and commercial sources while domestic loans are raised by the sale of development stocks, treasury bonds and through local banking institutions.

The outstanding public debt as at March 31, 2021, less than 20 months ago, amounted to M18.250 billion which was a decrease of M1.070 billion or six percent compared to the previous year’s figure of M19.320 billion.

This is according to the report of the Auditor General on the consolidated financial statements of the government for the year ended March 31, 2021.

The report also revealed that domestic debt was M3.481 as at March 31, 2021.