The Minister of Finance and Development Planning, Dr Timothy Thahane, presented the 2006/2007 budget in the National Assembly on February 8. Ministerial allocations of M4 907.5 million were tabled. 

Dr Thahane said the 2006/2007 budget will prioritise and emphasise the development and construction of urban and rural roads, water, electricity and communications infrastructure. It will also work towards increased food production. 

Lesotho’s economic fundamentals remain sound, the Minister said, even though the textile industry is going through a rough patch. The end of the Multi Fibre Agreement has meant competition from Asian textile producers. 

From the 1999 to 2004 peak of 50 000 Basotho workers, industrial employment has fallen to 37 500 in 2005. Growth declined from 3.1% in 2004 to an estimated 1.2% in 2005. It is however, expected to increase to 1.7% in 2006, the Minister said. 

There is, however, light at the end of the tunnel. Instead of joining the chorus of voices of those who want to restrict textile exports from the People’s Republic of China, Lesotho has invited China to be a partner in solving the problems and generating jobs. Government will also diversify the economy into, among others, sandstones; agro-industries and agri-business; tourism, quarrying and mining. 

The Minister said the size and composition of public debt reflects the country’s commitment to the maintenance of sound and prudent economic and financial policies. Public debt, currently estimated at M4.4 billion, has consistently fallen from 100% of Gross Domestic Product (GDP) in 2000/2001 to 54% today.

08 February 2006