The real test for Matekane

FORGET the new government’s election campaign promises.

Don’t fuss about its missed 100-day targets. The real test will be on Monday when Finance Minister Dr Retšelisitsoe Matlanyane presents her first budget.

That will set the tone for how the government plans to revive Lesotho’s ailing economy. Watch closely how the speech is in sync with the Revolution for Prosperity (RFP)’s campaign promises.

But it will be foolhardy to expect miracles or the spectacular.

Dr Matlanyane will not be a rich aunt bearing expensive gifts.

She is likely to tell us that things are not well and adjustments have to be made if we are to keep the lights on, pay our debts, keep children in school and put some food on the table.

Dr Matlanyane has already said money is tight and some fat might have to be trimmed to make ends meet.

It would therefore not be scaremongering to warn that she could be brewing some uncomfortable austerity measures to balance the government’s books.

How far she goes will likely depend on the government’s tolerance, courage and stamina for the potential backlash from the public.

One thing that is clear is that this government lacks the means to experiment with expensive populist measures.

Receipts from the Southern African Customs Union (SACU) have been tumbling and that trend is likely to continue.

The spillover effects of South Africa’s energy crisis is only just beginning to be felt and there is no doubt that the next cheque from SACU will not be a fat one.

Local tax revenues have been largely stagnant in real terms as companies struggle to recover from the ruinous effects of the Covid-19 pandemic.

The textile factories are bleeding jobs, emptying thousands on the streets at a time. There is no end in sight for that job carnage.

At the same time, inflation is gnawing at people’s buying power at a time when salaries are stagnant.

The agriculture sector, the backbone of the rural economy in the rural areas where 60 percent of Basotho live, is unlikely to perform much better this year.

Manufacturing remains in the doldrums. Foreign direct investment has been slow to come. The government debt is still manageable but there is need for a stronger grip on the reins.

The global economy is smarting from the effects of the Covid-19 pandemic and the Russia-Ukraine war that have combined to stifle production and supply.

It is in this context that Dr Matlanyane has to deal with competing needs that urgently require money she doesn’t have.

The number of people who need food support has increased, there are more students to sponsor through college, hospitals supplies are critically low, roads are poked with potholes, bridges have been washed away, government infrastructure is falling apart and almost all capital projects are either on standstill or woefully behind schedule.

Government employees have not had a substantial wage increase in years and pensioners expect the usual bump on their payouts.

She has to figure out ways to create jobs, especially for the youths who are running out of patience after years of unfulfilled promises.

How to get the thousands who have lost their jobs back to work is another headache.

In Dr Matlanyane’s hands is a small cake that has to feed many mouths.

How she shares it on Monday might determine her government’s future.

Good luck.