By Thoboloko Ntšonyane
MASERU
All eyes are on the Minister of Finance and Development Planning Dr Retšelisitsoe Matlanyane today as she will table the budget estimates for 2025/2026 fiscal year.
The highly anticipated presentation is expected to outline the government’s financial priorities and address key economic challenges facing the nation.
The public is particularly eager to see measures that will reduce the trade deficit, enhance local industries, and create employment opportunities.
In its latest report, the Southern African Customs Union (SACU) highlights Lesotho’s ongoing trade imbalance as a significant concern.
According to the report, in 2023, Lesotho exported goods valued at M15.3 billion while importing M31.7 billion, resulting in a widening trade deficit. As a SACU member, Lesotho is heavily dependent on revenue from the customs union, which constitutes a portion of its national budget.
As Lesotho’s imports have substantially exceeded its exports, translating to a reliance on foreign goods and services, this move does not augur well for the country ranks lowest in terms of the Gross Domestic Product (GDP) and economic performance amongst the four SACU Member States.
Following the publication of this story that this publication ran last week, the country has faced criticism for being a larger consumer than producer, a trend that continues to challenge its economic stability.
The populace expresses a desire for the upcoming budget to prioritise sustainable economic growth, job creation, and the bolstering of local industries to mitigate the trade deficit. There is also a high expectation for increased investment in infrastructure, education and agriculture to enhance the nation’s long-term economic prospects.
Also, the business community anticipates comprehensive strategies to address economic challenges and stimulate growth.
The Private Sector Foundation of Lesotho had not responded to the questions on their expectations from the budget at the time of going to press last night.
In its recent Monetary Policy Committee (MPC) meeting on 4th February 2025, the Central Bank of Lesotho assessed global, regional, and domestic economic developments to inform its policy decisions.
“Domestic economic activity was estimated to have expanded by 3.1 per cent in November 2024, up from 1.5 per cent in the previous month. This growth was primarily driven by stronger domestic demand, supported by both consumer spending and robust export growth.
“Despite challenges in the construction subsector, expansion was broad-based. Looking ahead, growth is expected to remain steady but uneven in the medium term, amid uncertainty in the export market,” said the Governor of the CBL, Dr Maluke Letete.
Letete also highlighted that the broad money supply increased in the fourth quarter of 2024 owing to a rise in transferable deposits held by the business. “Private sector credit also expanded, reflecting higher lending to both households and business enterprises.”
The upcoming budget is expected to focus on fiscal policies that promote macroeconomic stability, prudent expenditure in government ministries.
The government’s commitment to these objectives is anticipated to be a central theme in the Finance Minister’s address.
In a strategic move to attract foreign investment and diversify its economic partnerships, Lesotho is preparing her participation in the 2025 Osaka Expo in Japan, scheduled from April 13 to October 13.
Under the sub-theme “Connecting Lives,” the country aims to showcase its potential in trade, tourism, and culture, thereby positioning itself as an appealing destination for potential investors.