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The bill is due



FINANCE Minister Thabo Sophonea is today expected to present what he has described as the “most difficult budget in recent years”. He doesn’t have a fat purse at his disposal. Government revenues have plummeted due to the Covid-19 pandemic. Revenues from the Southern African Customs Union (SACU), which have always helped the government shore up its budget, have been in steep decline over the past few years. Donor fatigue has set in as rich countries prioritise pressing problems in their backyards. At the same time, Lesotho’s economic prospects look dim in the short to medium term. Although the Covid-19 pandemic has worsened the situation, the truth is that most of our financial problems are self-inflicted. While revenues have tumbled and the economy looks bleak, the government has continued to balloon its wage bill. This is despite repeated warnings from its economists and the International Monetary Fund. The budget deficit looks set to increase to unsustainable levels. Yet the government has not shown any inclination to put a lid on its expenditure. It has continued to hire more employees. MPs have awarded themselves hefty fuel allowances. Financial leakages, long identified by the Auditor General, have not been plugged. The government continues to lose millions to corruption and fraud. Over the years, successive governments have steadfastly refused to live within their means. They have continued to live off borrowings and the benevolence-rich countries that ministers like fondly describe as “development partners”. There has never been a time that we have restricted ourselves to eat what we kill. The result is that we have spent money we don’t have. When the books failed to balance, as has happened in the past two years, our governments resorted to fire-fighting. One of those tactics has been to move money from capital projects to cover recurrent expenditure. Borrowing from both the domestic and international market is another. But perhaps the most noxious of them all has been to delay or stop payments to suppliers. The result is that the government has denied the private sector the much-needed cash flow to continue working and keep people in their jobs. No wonder some companies have either collapsed or downsized. In other words, the government has killed the very hens that lay the eggs. It has sabotaged its own source of tax revenue. But that is not all. The government has also neglected the private sector. Instead of policies that promote private sector growth and investment, it has persisted with outdated laws while clobbering the business with bureaucracy. The bill was going to be due at some point. The country is now paying for those past mistakes. Sophonea is not going to make a dollar out of fifteen cents. He is dealing with a system that has been broken for years. That is why we must manage our expectations and go easy on him.

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