LAUNCH OF THE LESOTHO DEVELOPMENT FINANCE ASSESSMENT AND THE INFF ROADMAP

Remarks of the UNDP Lesotho Resident Representative, Ms Betty Wabunoha 

I am honored, to be part of this important event, to launch the Development Assessment Report and the Integrated National Financing Framework Roadmap.

My personal experience, which is entrenched in the financial architecture, is directed to the relevance of having and tracking income and expenditures for purposes of noting divergence and relevance to achieving set goals. Generally effective, transparent, and systematic processes have proved to propel business progress.

I would like to congratulate the Government of Lesotho on the decision to pilot the integrated national financing frameworks (INFF), as part of the ongoing initiatives for strengthening public financial architecture. It has been a year-long of consultation processes and engagement on the development financing options and opportunities for Lesotho. Therefore, today we mark a milestone in transforming the development financing landscape in Lesotho and our journey towards achievement of the national development agenda and the Sustainable Development Goals.

 The INFF aims to achieve linkage between financing decisions and the national development priorities. It is through this linkage that countries are able to maintain development momentum to   guarantee sustainable development outcomes and transformation.  The INFF is part of a joint UN-programme implemented through UNDP, UNICEF and IOM, in collaboration with the Ministry of Development Planning and Ministry of Finance, to reconstruct the planning and financing systems to accelerate attainment of sustainable development. The Development Finance Assessment (DFA), on the other hand, is a key milestone of the INFF process. It assesses available and potential financing sources, reviews the policy and institutional arrangements for management and accountability, as well as identifies opportunities and challenges in mobilising and aligning investment towards identified sustainable development priorities.

Excellencies, ladies and gentlemen,

 The world is at risk of missing the targets of Agenda 2030 for Sustainable Development. Developing countries have fallen far behind in achieving critical milestones by this time, due to the inherent financing gaps for investment towards implementation of the SDGs. The Covid-19 pandemic created necessary   diversion of financial resources to address the immediate health needs, emerging socio-economic challenges and incapacitated economic sectors and created trade shocks, which projected existing development challenges and  widened  the SDGs financing gap. Climate change is exerting additional socio-economic pressures which we must recognize and integrate into our planning and budgeting frameworks. All these pressures have created more demand on governments and the people, now more than ever before to work, to generate development equity and sustainability despite constraints in development financing.  We must prioritize policy and development needs, as well as  ensure effective use and mobilization of financing resources;   prudent public financial management systems are crucial to influence the quality of public services, their outcomes, and their impacts on development.

The Lesotho DFA process, traced development financing capacities, looked at the institutional and policy frameworks for planning, execution and accountability, and the report has provided recommendations and possible options to address  the limited development finance resources in the country.

In addition to aligning national development priorities to financing, the recommendations of the assessment report aim to establish institutional mechanisms for mobilization of partnerships, improve overall absorption capacity of ODA and management and mobilization of public and private resources.

The recommendations, once implemented, will promote inclusivity and bridge development inequalities by integrating gender and critical population groups for a shared and just prosperity.  Participation of a cross section of groups including women and youth, is required to achieve sustainable socio- economic growth, making it necessary to tailor development planning and financing strategies to their needs, thus achieving development outcomes that leave no one behind through gender-based planning, budgeting, and reporting.  I am pleased to share that UNDP is working with the Department of Gender, to support the Government to undertake gender audits for government policy, programmes, and delivery mechanisms, piloted in the Ministry of Development Planning, Ministry of Finance, Ministry of Public Service and the Ministry of Gender and Youth. The audits will determine key actions necessary to address the   existing gaps for a gender-sensitive public policy and service delivery.

Excellencies , Ladies and Gentlemen,

Globally, it is estimated that, about 5 trillion US$, in potential government revenue goes missing annually, due to non-tax compliance, poor revenue collection and payment leakages among others. According to a 2020 UNCTAD report, Africa, loses approximately 88.6 billion US$ annually in illicit financial flows and capital flight. Lesotho is no exception to this statistic. This loss in revenue is a cost to development and reflects the difference between the realized and deferred policy priorities per annum, cumulating into high development deficits, and inequalities. Tandem to the recommendations of the DFA report, adopting the recommended inclusive policy approaches, the innovative and technology-based solutions, and establishing accountability mechanisms would equip the government to make better policy choices for development to plug the leakages and strengthen oversight on domestic revenue collection. If implemented well, this could also facilitate diversification of development finance flows to buffer against vulnerability to economic shocks. 

Excellencies, Ladies and Gentlemen,

The launch of this DFA report,  comes at an opportune time for Lesotho. A time for the development of the next national strategic development framework - NSDP III. Critical considerations on how the private sector and all other partners including the Civil Society Organizations’, contribute  to development, will be necessary to leverage synergies and existing resources for Lesotho’s development future.

Through the implementation of this INFF roadmap, UNDP will collaborate with the Ministry of Development Planning to develop an SDG Financing Strategy to determine the cost of financing development in Lesotho. We will work together to define strategies for resource mobilization, and  with the Ministry of Finance to determine private-sector driven and SDG-aligned investment opportunities .

Ladies and Gentlemen,

Let me iterate the main message of this report. Lesotho has opportunities to mobilize development financing but will need to fulfill the necessary preconditions by adopting prudent strategies for public financial management as well as developing capacities to enable resources diversification through external sources. Although there are many potential sources of external financing available for the country as analyzed in the report, [including international trade, FDI, other private flows, incl remittances, international financial and technical cooperation, and external debt], they may not be equal in their impact on development. In this regard, policy trade-offs to establish development cost-benefit ,will be necessary to ensure a sustainable development financing mix for Lesotho’s development. By determining the cost for achieving the Agenda 2030 and long-term development targets, through the SDG Financing Strategy, Lesotho will position itself to match the financing sources to the development needs, and thus the development outcomes.

As I conclude, Excellencies, Ladies and Gentlemen, I wish to thank the Government of Lesotho particularly the Ministries of Development Planning and Finance for the efforts taken to coordinate this work. They have ensured inclusive participation of all relevant   Government departments, the private sector, financial institutions, civil society organizations and the academia to whom I am sincerely grateful.

I wish us all a fruitful journey as we embark on the accelerate task to achieve Lesotho’s national aspirations and the SDGs targets through a well implemented INFF.

I thank you.