Govt fails to spend M10bn debt 

…as Parliament tightens borrowing oversight 

Mohloai Mpesi 

THE government has failed to utilise M10 billion in borrowed funds earmarked for capital projects during the past financial year, prompting Parliament to introduce stricter oversight measures aimed at ensuring public borrowing delivers value for money. 

The concerns emerged during a high-level engagement at the National Assembly this week on the transition to a revised budget execution reporting template designed to strengthen evidence-based parliamentary oversight. 

The meeting brought together Members of Parliament, chairpersons of National Assembly portfolio committees, Principal Secretaries and other senior government officials. 

The new reporting model, which will be piloted during the first quarter of the current financial year, is expected to improve financial reporting by ministries while enabling Parliament to more effectively monitor the government spending and borrowing. 

The latest developments come against the backdrop of persistent weaknesses in Lesotho’s budget execution. Official figures show that only about 71 percent of the 2025/26 budget, excluding externally financed expenditure, was implemented despite public debt declining to about 50 percent of Gross Domestic Product (GDP) from 54.3 percent the previous year. 

Experts have attributed the poor spending performance to procurement delays, weak project preparation and ministries seeking funding for projects that are not yet ready for implementation. 

Addressing the gathering, Parliamentary Budget Office Director Lereko Maine said Parliament’s Economic Cluster had raised serious concerns over the government’s inability to absorb funds borrowed specifically for capital projects. 

He said although the government had borrowed M10 billion for infrastructure and other capital programmes, only M6 billion had been utilised while interest continued to accrue on the entire debt. 

Mr Maine further revealed that only 15 percent of debt-financed capital projects were considered effective. 

“The Economic Cluster has complained that of the M10 billion allocated to capital projects this past financial year, only 60 percent had been utilised by midterm. 

“Of the capital projects financed with that debt, only 15 percent are effective. M4 billion has to be returned to the government purse, as the Public Financial Management and Accountability (PFMA) Act dictates. What does that tell us about the absorption of capital projects? What is going wrong with capital budgeting?” Mr Maine said. 

He criticised ministries for requesting funds before completing project appraisal processes, saying this inevitably delayed implementation because procurement only began after Parliament had already approved funding. 

“Civil servants cite lengthy procurement processes, but that explanation is not enough. We know when a project is ready. We come to Parliament to ask for money for projects that have not completed the appraisal cycle. 

“Once the money is allocated, the procurement process only begins. Some processes take three months, others 15 months. It is clear from the outset that such a project will not be completed within the fiscal period, so why ask for money that will simply be returned? 

“There are projects ready for implementation that could have been financed with that money instead. We can no longer entertain this,” he said. 

Parliament to scrutinise borrowing 

Mr Maine said the revised reporting template would require every ministry to report on the performance of debt-financed projects. 

He said the Minister of Finance and Development Planning, Dr Retšelisitsoe Matlanyane, would also be required to present borrowing proposals to Parliament for scrutiny before the government contracted new loans. 

“The debt component on the reporting template will show how the debt is performing. Before the Minister of Finance and Development Planning takes on new debt, she must first discuss it with Parliament, and Parliament must approve it,” Mr Maine said. 

He added that the Tenth Amendment to the Constitution Act, 2025, currently in its transition phase, now requires the national budget to include a borrowing strategy. 

“The Tenth Amendment now requires the Minister to present the budget together with its borrowing component. Parliament will have to be reported to on the performance of borrowing. The country cannot keep borrowing for non-performing projects and accumulating debt without commensurate returns. Parliament is alive to that issue,” he said. 

Crackdown on travel spending 

Mr Maine also announced that ministries would now be required to submit separate reports on international travel in a bid to curb excessive spending through budget virements. 

He said Parliament wanted to determine whether overseas trips provided value for money and whether they genuinely benefited the country. 

“There will be a separate report on international travel. Ministries have been making a lot of virements, moving money from operating costs and other line items to fund trips. Virement is allowed in law, but it must be controlled and properly aligned. Had a ministry not attended a summit or workshop, what would the country have lost? We want benefits, not attendance for its own sake. 

Political interference blamed 

Mr Maine said some civil servants had complained of political pressure to approve unlawful expenditure. 

“There is a tendency for ministries to spend without authority, and officials say this is sometimes due to political pressure. No political pressure supersedes laws passed by Parliament. This template will hit a brick wall if we continue to allow political pressure to override existing laws. 

“Civil servants say they are written letters instructing them to process transactions in which their seniors have an interest. Chief Accounting Officers are expected to resist such pressure; we are custodians of the PFMA, Treasury Regulations, the Audit Act, the Procurement Act and other laws,” he said. 

He added that junior officials who resisted unlawful instructions often faced suspension or disciplinary action, undermining sound public financial management. 

IFMIS violations hurting govt’s credibility 

Mr Maine also criticised ministries for bypassing the Integrated Financial Management Information System (IFMIS) when procuring goods and services, saying the practice had contributed to mounting arrears and damaged the government’s reputation with suppliers. 

“Principal Secretaries sometimes engage companies to provide services that are never committed to the government’s books. Spending outside IFMIS continues to cause arrears, which accumulate year after year. 

“It is not the kind of reputation this country needs, taking services from people and then failing to pay. Suppliers accumulate debt at banks; some take loans and promise jobs to others, only for the government to fail to pay. Who is to blame? The regulations exist for us to apply them,” he said. 

Adverse audits driving away investors 

Mr Maine further blamed ministries for repeatedly failing to provide the Auditor-General with timely information, contributing to Lesotho’s long-standing adverse audit opinions. 

“The government is audited every year. The Auditor-General must give her opinion, but before that, there is consultation with ministries to explain figures. She does not receive answers or sufficient evidence on time. It is the responsibility of Principal Secretaries to ensure she gets timely responses. 

“This could help us move away from the adverse audit opinion we have been sinking in since 1974. We cannot be comfortable with an adverse opinion; it has international repercussions, and once investors read the report, their appetite deteriorates. An adverse opinion does not only reflect on the country but also communicates the state of its public financial management system,” he said. 

Speaker calls for evidence-based oversight 

Opening the engagement, National Assembly Speaker, Tlohang Sekhamane, said Parliament needed to shift from merely monitoring budget allocations to assessing whether public spending produced measurable results. 

“For many years, oversight focused on budget variances: how much was appropriated, released and spent, and how much was not spent. Those questions are necessary but no longer sufficient, nor do they get to the heart of accountability. 

“The people of Lesotho want to know what the approved budget has delivered, which communities benefited, whether projects were completed, and whether public resources produced tangible outcomes. 

“Evidence-based oversight, guided by the value-for-money principles of economy, efficiency and effectiveness, allows Parliament to ask better and more meaningful questions,” Mr Sekhamane said. 

He stressed that the revised reporting template was intended to strengthen accountability rather than create conflict between Parliament and the Executive. 

“The revised reporting template is not a mere administrative form; it is a comprehensive accountability instrument linking releases, expenditure, procurement, capital projects, revenue, debt, international travel, audit concerns, corrective actions and expected outcomes,” he said. 

Mr Sekhamane also appealed to Principal Secretaries to work closely with the Public Accounts Committee in combating corruption. 

“It will help committees move from assumptions to evidence, from general statements to measurable findings, and from delayed reactions to timely corrective action. You must fight corruption. Help the Public Accounts Committee — we should work together to make Lesotho a nation of zero tolerance for corruption,” he said. 

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