Lesotho Public Investment Management Efficiency Review

Abstract

Lesotho is a small landlocked country
 with a homogenous population of 2.1 million. Lesotho's
 gross domestic product (GDP) per capita was 1,023 dollars
 and gross national income (GNI) per capita was 1,080 dollars
 in 2010. The country also faces numerous challenges to its
 social and human development. In this context, more
 attention on the role and quality of public investment is
 warranted. To improve public accountability and
 transparency, the Government of Lesotho (GoL) introduced the
 automated integrated financial management information system
 (IFMIS) in April 2009. The study directly responds to an
 explicit request of technical assistance from the ministry
 of finance and development planning (MoFDP) and aims at
 supporting the GoL in its major reform efforts to enhance
 the efficiency of public investment management (PIM) and
 increase the "value for money" in capital
 spending. The overarching objective of this study is to
 support the GoL in its efforts to prioritize public resource
 allocation and enhance efficiency in capital spending, with
 the ultimate goal of contributing to improved governance,
 service delivery, and economic growth. The work is aligned
 with the World Bank country assistance strategy (CAS) 2010
 to 2014, in particular its first pillar on fiscal adjustment
 and public sector efficiency. This report emphasizes the
 complementary aspects of the institutions, incentives,
 capacity, and process-related constraints to the functioning
 of PIM. The focus of this report will also complement
 ongoing public financial management (PFM) support by other
 development partners. The report is presented in four
 chapters, which are organized as follows: chapter one offers
 a macro-level country analysis; chapter two presents recent
 trends in public investments; chapter three focuses on
 institution mapping and the diagnostic assessment of the PIM
 system; and chapter four concludes with policy implications.