## Press Release: IMF Executive Board Completes Second and Third Reviews Under Extended Credit Facility Arrangement for the Kingdom of Lesotho, and Approves Request for Augmentation of Access and US$13.42 Million Disbursement

_IMF News, April 9, 2012_

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**Canonical URL:** [Press Release: IMF Executive Board Completes Second and Third Reviews Under Extended Credit Facility Arrangement for the Kingdom of Lesotho, and Approves Request for Augmentation of Access and US$13.42 Million Disbursement](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr12126)

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## Bibliographic details
- Published: April 9, 2012

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### Board actions and financing under the ECF arrangement
- The Executive Board completed the second and third reviews of Lesotho’s program under the Extended Credit Facility (ECF).
- Approved augmentation of access equal to 25 percent of quota, leading to a total access of 145 percent of quota, an amount equivalent to SDR 50.605 million (about US$77.84 million).
- Approved an immediate disbursement equivalent to SDR 20.085 million (US$30.89 million), bringing total disbursements under the arrangement to SDR 33.565 million (US$51.63).
- The three-year ECF arrangement for the Kingdom of Lesotho in an amount of SDR 41.9 million was approved by the IMF’s Executive Board on June 2, 2010 (Press Release No. 10/224).

### Macroeconomic assessment and context
- Lesotho’s economy has "performed well under the ECF-supported program, notwithstanding a sharp reduction in SACU revenues, devastating floods, and high international commodity prices."
- The augmentation of access, supplemented by donor assistance, is intended to support the authorities’ reform agenda and cushion the impact of shocks on the balance of payments.

### Policy recommendations and priorities emphasized by the IMF
- Maintain the exchange rate peg, with the medium-term program appropriately focusing on fiscal adjustments to rebuild international reserves.
- Adopt a prudent fiscal stance for 2012/13, emphasizing:
  - Curbing recurrent expenditures while protecting social spending.
  - Enhancing the efficiency of spending through improvements in public financial management and the quality of capital spending.
  - Strengthening tax administration to help achieve medium-term fiscal targets.
- Accelerate structural reforms to support private sector-led growth and economic diversification, aimed at:
  - Improving the business climate.
  - Boosting external competitiveness.
- Strengthen the financial sector and facilitate financial deepening through planned regulatory reforms, including:
  - Adopting regulations for the recently enacted Financial Institutions Act.
  - Reinforcing the supervisory role of the central bank.
  - Broadening access to financial services, especially in rural areas.

### Implications of the Board decision
- The augmentation of access under the ECF-supported program, together with donor assistance, will further support the authorities’ reform agenda and cushion balance-of-payments shocks.
- The approved immediate disbursement increases available financing to support the authorities’ implementation of the recommended fiscal and structural measures.

*Press Release No.12/126 — April 9, 2012*

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## References

- [Kingdom of Lesotho and the IMF](http://www.imf.org/external/country/LSO/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Press Release No. 10/224](https://www.imf.org/external/np/sec/pr/2010/pr10224.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr12126_