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March 1, 2002

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Lesotho Poverty Reduction Strategy Paper Preparation Status Report

January 31, 2002

Poverty Reduction Strategy Papers (PRSPs) are prepared by member countries in broad consultation with stakeholders and development partners, including the staffs of the World Bank and the IMF. Updated every three years with annual progress reports, they describe the country's macroeconomic, structural, and social policies in support of growth and poverty reduction, as well as associated external financing needs and major sources of financing. This country document is being made available on the IMF website by agreement with the member country as a service to users of the IMF website.

This report outlines progress between December 2000 and December 2001, exactly a year in the effort to prepare the full PRSP. The assignment has not only been involving, but quite challenging, being the first time Lesotho has been confronted with a task of this nature. It also comes against a backdrop of decades of un-answered development questions and concerns, the most important of which have been flagged in the I-PRSP. The Government of Lesotho highlights hereunder, progress and constraints experienced in the task of preparing a community-driven and country-owned national strategy to fight poverty.



(a) Participation

Following the recommendations of the December 2000 consultancy on the evaluation of the I-PRSP formulation process, the Technical Working Group (TWG) has been expanded to include the Ministries of Natural Resources and Employment and Labour, as well as Environment, Gender and Youth Affairs; more NGO representation in the form of the Lesotho National Council of Women, Trade Unions and the Lesotho Wool and Mohair Growers Association. Also joining the TWG since March 2001 have been Ireland Aid, European Commission and UNICEF, making the current strength of the group stand at 40 members. In addition, inclusiveness and participation in the process has been enhanced by two separate briefing sessions for Senate (July, 2001) and the National Assembly (November, 2001) as well as the last session with the donor community (November, 2001). But the TWG has been much more aggressive.

Towards the end of July, 2001, the TWG, the Ministry of Local Government staff and Non-Governmental Organizations staff embarked on the exercise of assessing district-level institutions, and this task, which has culminated with the report "Assessment of District Planning Structures in Lesotho" cost nearly US$3,000 at current prices, and will be one of the reference documents in the technical proposals by the PRA Management and Write-up Consortium of Consultants. The imperativeness of more serious, extensive consultations for general development and poverty reduction, was expressed by both these structures and the staff, and each side pledged preparedness and commitment in this regard.

Between June and October, 2001, the TWG selected district-based and Non-Governmental Organizations staff from all the ten districts of Lesotho and trained them in participatory rural appraisal techniques. This was to equip them to facilitate the consultations process using standard methods throughout the country. This training was co-financed by Ireland Aid and DFID, and has cost well over US $ 70,000 at current prices. Between September and Mid-November 2001, teams of at least two members have visited nearly all the country's thirty-seven (37) administrative wards, holding half-day meetings with village headmen, ward chiefs, District Secretaries, district staff (GoL and NGO) as well as Community-Based Organizations CBOs), sensitising them about the forthcoming consultation process. These senstizations were co-financed by the Government of Lesotho and Ireland Aid and have cost well over US$8,000 at current prices. It is noteworthy that in addition to the Lesotho Council of NGOs (LCN), which has considerable membership at the grass-root level, a Civil Society Poverty Reduction Forum, which integrates civil society organizations not affiliated to LCN, was launched in November 2000 by LCN, and the purpose of establishing such a forum is primarily to maximise civil society involvement in the PRSP process.

In Mid-December 2001, a panel consisting of the Government Secretary, Principal Secretary Cabinet (Economic Affairs) and Principal Secretary Development Planning, were on a phone-in nation-wide programme at Radio Lesotho to brief and to respond to questions by the nation about the PRSP process. Thus, the process was exposed to one of the most interactive media programmes (Seboping) in Lesotho. Indeed far from attempting to produce a blueprint strategy for Basotho, the current activity to draft a 'table of contents' merely purports to re-focus the attention of the TWG to the culmination of a long preparatory process started since February 2001 and to the resounding challenge to beat the June 2002 target date.

By January 2002, the Bureau of Statistics and TWG finalized a List of Villages for Consultations, in the selection of which eighty (80) villages it was ensured that all districts and all ecological zones are represented, using sampling techniques.

(b) Poverty Diagnosis, Targets, Indicators and Monitoring

Whereas it remains true that 'GoL does not have an official measure of poverty, and for the time being it is being conjectured that one-half to three quarters of the population may be considered poor, and a quarter to one-half may be ultra-poor, with regional concentration in the predominantly rural areas' (Lesotho I-PRSP, 2000), in collaboration with United Nations Development Programme, the Government of Lesotho is just about to complete the 2001 National Human Development Report (NHDR, 2001). Through the Bureau of Statistics, Lesotho has just started a household listing exercise as a first step towards pilot-testing the Core Welfare Indicator Questionnaire, which will be dovetailed with the Household Income and Expenditure Survey in April 2002. Indeed, although the NHDR is not yet disseminated, there are already apparent indications of at least the national Poverty Datum Line, and it is hoped that a better estimate of this parameter will be published in the PRSP in June 2002. In this context, an attempt has been made to estimate the proportion of the population below the national poverty line, the regional and gender distribution of poverty, as well as factors contributing to poverty, and these were presented at a workshop held in October 2001. It is, in fact, worthy of note that the work on the NHDR was supervised by the Bureau of Statistics, the central national agency that will continue to collaborate with the Poverty Monitoring Unit (PMU) established in December 2001, to which three officers of the Ministry of Development Planning have been assigned. It is important to note that the establishment of the PMU is, itself, an indicator of the development of a national information system suggested by various stakeholders in Lesotho.

The consultancy on assessment of past poverty programmes has only been about sixty percent completed. That, notwithstanding, it has given significant indications of policy and operational aspects of Lesotho's poverty experiences over the last thirty-five years, and these have been more clearly brought out in the report Towards a Poverty Monitoring Mechanism in Lesotho commissioned and completed between March 2001 and June 2001, again under the support of UNDP. The Government of Lesotho would like to appreciate the participation of the World Bank and IMF Missions in the workshop on presentation of the findings of the latter consultancy. It has been planned that these achievements should be crystallized with technical support from the World Bank in the form of a Poverty Advisor, the recruitment of whom is already underway. Indeed during the most recent World Bank supervision mission, it was agreed that the LIL/LFCD grant resources be used to finance establishment and development of the Poverty Monitoring Unit.

(c) Priority Public Policies

The policy matrix included in the I-PRSP was an outcome of a strong consultative process, established as a basic input at very early stages of the formulation process, in the understanding that a Basotho-driven poverty reduction strategy (PRS) has to be framed within a medium-term macro-economic strategy. That very matrix has been the subject of a very special task force—the Joint Ministers' Task Force and Technical Committee on the PRGF Economic Programme—created as the nexus of the Fiscal Analysis and Policy Unit. It is noteworthy that the Department of Economic Policy of the Ministry of Development Planning—an active member of the TWG—is co-ordinating the exercise of sectoral submissions of a pro-poor policy framework, in conjunction with the Central Bank of Lesotho. The prime objective of this co-ordination is to ensure a strategy that transcends the ongoing phases of the current programmes and sequences such measures with a medium-term dimension. During the most recent World Bank Mission referred to above, it was agreed that the findings of the Public Expenditure Review carried out in 1999 would, for the time being, be expedient for translation of the budgets for the policy interventions into a sound Medium-Term Expenditure Framework (MTEF) for Lesotho. Furthermore, the Government of Lesotho has created a National Steering Committee (NSC) for preparation of the National Vision whose main thrust is poverty reduction. It is also planned to derive more policy perspectives from the people during the consultations, strictly scheduled to commence this month of January, 2002.

Finally, to ensure that economic growth brings about optimal employment creation is a great challenge for Lesotho, especially when traditional interventions such as accelerated public programmes are not to be based on only their perceived employment generating potential. Actually, Lesotho has the experience of rural road construction that has had a positive impact in this regard, but it is noted that this should not be the only source of employment, if we are talking about significant reduction in poverty through direct interventions. It was in a bid to diversify such sources when exactly two years ago, the Ministries of Development Planning and Finance planned to conduct a "sources of economic growth and employment study" during 2001. In fact, preliminary work on this study commenced in December 2001 in further consultation with the World Bank Mission (Macroeconomics 1 (AFTM1) Southern Africa), and the study will be completed by March 2002, just in time for findings to be incorporated in the first PRSP. Poverty reduction is one of the major policy objectives of the Government of Lesotho, and to achieve this objective, the Ministries of Finance and Development Planning have issued a Cabinet Memorandum to the effect that line ministries document how their budgets will make a contribution. The TWG will, before completion of PRSP 1, publish a set of key indicators for monitoring and measuring progress in this direction, as part of the current effort to institutionalise poverty reduction and general development Monitoring and Evaluation in Lesotho.


The Technical Working Group has, to a very large extent, stuck to the timeline for the full PRSP. In this context, it is worth mentioning that the preparatory and sensitisation phases have been completed. The Civil Society Poverty Reduction Forum has been launched and on February 20th, 2002 an-all-stakeholder forum will be held as a launching pad for the PRS process, and the need for such a forum was confirmed at the strategic planning workshop that was held at Oxbow, Butha-Buthe, in February 2001, where a breakdown of each time-lined activity was agreed. Actually, the major revision of the timeline has been in the form of time allowance for commissioning of a consortium of consultants, by Mid-February 2002, for management of PRS data generated in the course of consultations and for actual write-up of the document.

Admittedly, there have been temporal slippages if one reviews the summary of key deadlines in the I-PRSP, but it will be appreciated that these were experienced in a bid to allow ample preparatory work in the light of unfolding realities of this novel challenge, that included maximizing stakeholder participation using existing governance structures (for example, sensitising chiefs and district staff at their already scheduled monthly meetings) lest the Government was seen to be imposing this idea of a poverty reduction strategy process and document.

At least two more stakeholder forums will be held before completion of the strategy document; and it is worth noting that the Government of Lesotho still foresees completion in June 2002.


The Government of Lesotho has launched the NSC (functionally the Poverty Council mentioned in the I-PRSP) whose intermediate outputs are aimed at guiding the PRS process. The recent harmonization of the PRSP documentation (the I-PRSP and the various (World Bank and IMF) guidelines for use by the TWG), the Public Sector Improvement and Reform Project (PSIRP) and the major components of the National Vision's Preliminary Perspectives will enhance the chances of completing the PRSP in the sense that the NSC is composed of principal secretaries (keen on the PRSP and Vision), some leading media campaigners and trade unionists, who are always vocal about deteriorating standards of living of most Basotho. The significance of this step is that the first national dialogue on the Vision was attended by all the political party leaders in Lesotho, who had registered the urgency of creating a National Steering Committee, with the major theme of the Vision being poverty reduction.

The process will be supported with a budget that has already been tabled before some co-operating partners participating in the Technical Working Group, and it has been planned to present this budget at the all-stakeholder workshop referred to above, after drafting it as a multi-sectoral TWG ourselves.

Indeed the mobilization of a mainly NGO-composed consortium of consultants for management of the PRS information and write-up aims to maximize community participation and inclusiveness in the preparation of the strategy, since both the NGO and Ministry of Local Government members of the consortium are veteran actors in rural self-help development strategies in Lesotho and have been consultants in the now successfully completed participatory poverty assessment training, which itself, involved a good representation of Lesotho stakeholders who will work as assessment teams during the consultations.

Consultations are commencing in early February, 2002, now that the Bureau of Statistics, in collaboration with the National University of Lesotho, have supported the process with a scientifically acceptable selection of villages. It is noteworthy that the consultations process will be a joint exercise for the National Vision development as well, as agreed during the recent workshop on harmonization of these initiatives. The Technical Working Group has scheduled the 20th21st February, 2002 workshop so as to evaluate the then nascent consultations and secure more commitment and support of all the stakeholders, especially politicians and chiefs, who are the most respected leaders at the community level.

Co-operating partners such as Ireland Aid and the British Department for International Development have committed financial and technical resources towards technical assistance for write-up of the document, and in any case, the Technical Working Group is ready to do the job in the event of unforeseen problems.


Preparation of the poverty-focused capital and recurrent budgets by participating ministries has been cited as the main reason for the recent sluggish attendance at TWG meetings. This was discovered during the serious follow-up step by the Ministry of Development Planning to the letter that was written to remind the ministries of the urgency of the assignment. It was, however, also noted that there is a strict requirement lately, of integrating various cross-cutting aspects of our current realities (HIV/AIDS, environmental concerns, etc) in new and ongoing projects/programmes, and these tasks are entrusted to senior officers in these ministries, themselves members of the TWG.

Although it is to be appreciated that there has been a trade-off between early commencement of consultations and thorough, albeit by no means adequate, preparatory work, the Government of Lesotho anticipates no major constraints to completion of the strategy paper. This remains so, even with community-level consultations now limited to March 2002 by impending Lesotho's general elections tentatively scheduled for May, 2002. The basic requirements of verification of the strategy content and mutual commitments among various stakeholders, will be met through at least two forums to be organized before submission of the document to the new cabinet, to whom, fortunately, the process will not be new at all. Any new government that will turn against the document will face a very high possibility of being ignored by the electorate, the majority of whom were openly saying—during PRA practical training and PRSP sensitizations—that the next consultations should be the last, because they are tired of being consulted without concrete action and solutions to their problems of poverty an underdevelopment. But we cannot rule out this possibility, all said and done.