World Bank praises Lesotho’s social protection policies

MASERU – AT least 49.7 percent of Lesotho’s population lives below the national poverty line with about a quarter of the population living in extreme poverty.
That is according to a World Bank report released this week. It is entitled, Lesotho: social protection programmes and system review.
The report assesses the performance of Lesotho’s social protection policies and programmes.

The report says 994 000 people are living below the poverty line with a further 484 000 living in extreme poverty.
“Therefore, one million Basotho do not live at a basic level of consumption sufficient to easily weather shocks, and half a million live at an extreme level of vulnerability,” it says.

The report said poverty is “geographically differentiated” in Lesotho.
It said 80 percent of Lesotho poor and 84 percent of the extremely poor live in rural areas where they face higher risks of being in poverty.
But beyond the geographical factors, other factors also played a part.
“The larger the size of the household, the greater the likelihood of poverty, with a two person household poverty incidence of 28.3 percent versus 67.1 percent for households of seven or more. Households with three children have a poverty rate of 71.6 percent,” the report said.

Married and divorced households also had rates of poverty at 46 percent.
“Female-headed households have a 10 percentage point higher poverty rate than their male headed counterparts.”
It said the higher poverty rates in rural areas largely reflect the reliance on small-holder agriculture in Lesotho.

As the country continues to face weak growth and limited fiscal resources further constrained by the economic shocks of the Covid-19 pandemic, strong effective social protection programmes are needed to help protect vulnerable people and ensure that they can meet their basic needs.
The report acknowledges Lesotho’s progress to establish safety net systems and programmes and suggests a selected range of policy options to increase fiscal savings and improve the coverage and effectiveness of the programmes.

“This report will help inform the design and implementation of our social protection programmes and policies to ensure that they are efficient and equitable,” said Matebatso Doti, Minister of Social Development for Lesotho.
“It will also help us improve the efficiency gains of existing programmes to allow us to fund more programmes such as the disability and infant grants.”
Lesotho has made significant investments in developing social protection programmes over the last 20 years.

The country’s social protection programmes tackle vulnerabilities throughout the life cycle from children to the elderly.
However current programmes are costly with social protection spending representing about 6.4%of gross domestic product (GDP) making Lesotho the highest spender among any African country.

The review found that while several social assistance programmes in Lesotho are effective in reducing poverty, they have low cost-effectiveness and poor targeting with a large share of the support going to the non-poor.
The operational systems used to deliver the programmes remain largely manual and have leakages which impact the efficiency of the programmes.
Simulations show that if programmes such as tertiary bursaries were retained only for poorer students with savings reallocated to a transfer targeted to poorer households, the national poverty rate could be reduced by 3.2 percentage points at the food poverty line.

“It is our hope that this research will enhance policies to ensure that the important investments the government is already making in social protection will help to break the cycle of poverty for the next generation, keep children healthy and in school, and help households transition from social grants for their livelihoods to more sustainable income generating opportunities,” said Marie Francoise Marie-Nelly, World Bank Country Director for South Africa, Botswana, Namibia, Lesotho and Eswatini.

The report suggests that the government reviews the allocation of spending across social protection programmes with the aim of improving value for money while enhancing their benefits for the recipients.
It suggests scaling and re-allocating social protection spending towards poverty-targeted programmes such as the child grant programme whose total costs account for only 0.15 percent of GDP.

It also suggests improving social protection systems by shifting payments from cash to digital payments and introducing “Cash Plus” measures to link beneficiaries to productive activities, and link child grants to better investments in human capital.

Staff Reporter