Majoro talks tough

Majoro talks tough

MASERU – THE government is stewing in a M1.1 billion debt, according to Finance Minister Dr Moeketsi Majoro.
Majoro told journalists on Tuesday that the government has introduced a raft of measures including banning luxury travel for top officials.
He said the current government began its tenure under very difficult financial and economic conditions mainly due to two factors.
First are the dwindling Southern African Customs Union revenues due to the underperformance of the South African economy in recent years.
Second is the depletion of both domestic and international reserves by the previous government following an unprecedented and unchecked fiscal deficit of nearly 10 percent of national output in 2016, Dr Majoro said.

“The government deposits and international reserves began to drop in October 2016 and both were below our target at the time the current government took power,” he said.
He said the situation has continued to deteriorate over the last 17 months, with reserves at minimum levels and cash barely adequate to pay suppliers.
In addition, the austerity measures implemented in 2017 and 2018 have not been adequate and have been undermined by weak government controls, said the minister.
This is not the first time that Dr Majoro has publicly stated that the government is broke and blamed the previous government.
He put the blame on the previous government after last year’s elections when his ABC party took over power.

Former Minister of Finance Tlohang Sekhamane flatly denied the assertions and accused Dr Majoro of playing cheap politics.
Dr Majoro said collection of revenues for the Fiscal Year 2018/19 and borrowing by the government has fallen short of requirements due to a weakening economy and low participation by financial markets in government borrowing instruments.
“The prolonged accumulation of payment of arrears could have a devastating impact on businesses and bank balance sheets as suppliers fail to service their loans and retain employees and their businesses,” he said.

As an interim measure, the minister said, the Ministry of Finance had as of Tuesday, been authorised by Cabinet to raise additional loan financing and had begun paying suppliers last Thursday and should pay off all arrears by the end of next week.
Dr Majoro said the current financial situation is structural and cannot be addressed in full by short-term financing solutions, adding that it calls for an urgent fiscal adjustment programme.
But the success of such a programme will depend on strong ownership, political commitment and candid communication by the government.

He said the government is currently in negotiations with the International Monetary Fund to provide balance of payments support and to catalyse contributions from other partners.
“We are also in talks with the World Bank, the European Union, and the African Development Bank on additional support,” the minister said.
Dr Majoro said a successful adjustment will entail very painful but unavoidable measures to ensure that the government spends only the money it has.
This, Dr Majoro said, means that serious consideration should be given to achieving a budget balance in 2019.

He said the government is considering cutting spending on international travel by eliminating international training while ministers should be accompanied by one official. Where there is an Embassy, the Ambassador will attend on behalf of the minister, said Dr Majoro.
“No per diem will be issued for any fully funded programmes by the host and attendance will be limited to only statutory meetings, virements to the international travel vote would be limited,” he said.

“Exceptions to these rules will be limited and would be granted only by the Budget Subcommittee to which all requests for travel by ministers will be tabled for scrutiny.”
Dr Majoro said every civil servant will now travel economy class, with the exception of judges, ministers and specified officers.
“Government intends to stop paying excessive commissions above the prices charged by the airlines. All government officials, including in all state-owned entities, should travel economy class regardless of the distance,” he said.

The minister said all government vehicles should be parked at 4.30pm and during weekends to reduce government fleet costs.
He said the police will be mobilised to impound vehicles that are found to be wandering outside the stipulated hours.
Principal Secretaries will apply for release of impounded vehicles on proper explanation of the violation and demonstrable corrective action.

He said all the government vehicles will forthwith carry the red government number plates (red numbers) and should also carry identifiable markings.
“Only principal secretaries should be assigned vehicles which they can use for personal use. Other officials below this level are not entitled to personal cars and have to return them to the ministerial pool,” Dr Majoro said. “In the coming weeks, the government will announce additional revenue enhancement and expenditure cutting measures,” he said.

Thooe Ramolibeli

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