The 2004/2005 Budget - Development not only about money, growth in GDP but also about people.  

A total of M4 569.6 million has been allocated for use in the 2004/2005 budget, presented before Parliament by the Minister of Finance and Development Planning, Dr Timothy Thahane on February 16. The largest slice of the cake has been allocated to social services, followed by general public services with economic services taking third place.

A breakdown of the budget shows that health, social security and welfare, education and culture, all of which fall under the social services sector, were allocated M1 895.5 million;  security, public safety law enforcement, administration of government, finance, planning, justice, immigration, foreign missions and foreign affairs, plus any other service which is neither a social, economic, or infrastructure service, all of which comprise general public services, were allocated M1 314.9 million whilst road, water, electricity, communications, commerce, tourism, industry, and infrastructure services, the economic sector, was allocated 763.8 million.

Although he welcomed the rise in the share of social services, the Minister was however cautionary, pointing out that in the normal run of things these should not rise at the expense of productive services which are critical for investment and growth.  Future increases in both social and productive services will have to be at the expense of general public services which has remained constant at 30 percent, he said.

Dr. Thahane said the country was following a medium term economic framework whose foundation lies in the recognition that development is not only about money and growth in the Gross Domestic Product (GDP) but also about people and the quality of their lives.

"People should be the focus of policies and how these impact on the quality of people's lives. This focus should apply equally to the actions of the private sector and NGOs including churches and various organisations of civil society,"

 Concern for health facilities remains uppermost and in 2004/05 Government will begin to address shortages in working space as well as a referral hospital.  It is proposed that M321 million be set aside for addressing the recurrent and capital priorities in the health sector. This amount includes grants to the Christian Health Association of Lesotho (CHAL).

Lesotho has now adopted its own program of action to scale up the fight against HIV and AIDS. This involves restructuring of the Lesotho Aids Programme Coordinating Authority (LAPCA), strengthening national and District Task Forces and forming partnerships with NGOs and the private sector. The Global Fund has given a grant of US$34 million to be spent over five years on HIV and AIDS and Tuberculosis, the Minister said. 

Also in the new budget was some good news for pensioners: "I am pleased to report that before the end of 2004/05 and after setting up administrative arrangements and registering people of age 70 or higher, Government will begin paying old-age pensions at the rate of M150 per month per qualifying senior citizen. M45 million has been set aside for this purpose, raising total pensions payment by 62 percent to M186.7 million in 2004/2005. This scheme will in time be amalgamated with the African Pioneer Corps (APC) pensions."  

Dr. Thahane also announced a 5.5 percent salary adjustment for civil servants, saying civil service performance and effectiveness is central to showing results on the ground and in achieving the transformation that the government is embarking on. It is the Government’s hope that by their performance all civil servants will justify this increase, he said.  

On education, it was estimated that the share of Education in total expenditure and national output will continue to rise until the Free Primary Education programme is extended to Standard 7.  Difficult choices will have to be made then, such as whether secondary education will be ready to receive these children? whether Government will be able to create more classrooms at secondary school level and hire more teachers? What will happen to Government’s ability to finance other programmes? These are some of the questions that need pondering as this cohort of children approaches standard 7, Dr. Thahane said.

Looking ahead, the Minister said the economy is forecast to grow at 3.6 percent in 2004 and 3.9 and 4.0 percent in 2005 and 2006, respectively. Economic performance is likely to be influenced more by developments other than completion of Phase IA of the Highlands Water Project and the subsequent slowdown in water-related investments. Inflation fell from 11.2 percent in 2002 to 7.3 percent in 2003.  It is expected to go down to 6 percent in 2004.

16 February 2004