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Publication(World Bank, Washington, DC, 2018-07) World BankAt the request of the Minister of Finance of Lesotho, a joint World Bank -Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) mission visited Maseru, between July 2 to 6, 2018, to undertake a Debt Management Performance Assessment (DeMPA).The objective of the mission was to evaluate current performance against the DeMPA methodology, and to assess progress since 2012, when the first DeMPA was performed.The results of the evaluation, spanning the full range of debt management (DeM) functions, show limited progress. Compared to the previous DeMPA, the current assessment revealed only one upgrade related to the registry and management system for domestic debt of the CBL. Yet, additional actions to improve debt management in Lesotho are currently under discussion (i.e., approval of a new policy framework and public debt law), or have already started such as the publication of a debt statistical bulletin, undertaking of a Medium-Term Debt Strategy (MTDS) analytical exercise as the foundation for a Debt Management Strategy, and introduction of a Cash Management Unit.The assessment also revealed several downgrades associated to weaknesses in debt reporting to parliament, lack of regular information sharing between MoF - CBL and with market participants, as well as lack of secure storage and backup for the debt recording and management system of the MoF. Additional areas of improvement relate to, among others: i) fragmented legal framework; ii) lack of a loan guarantees’ framework; iii) preparation and approval of a formal Debt Management Strategy; iv) weak quality controls for data publication; v) quality of cash flow forecasts; vi) lack of policies and procedures for DeM operations; and, vii) completeness and timeliness of debt records.
Publication(World Bank, Washington, DC, 2012-09) World BankFrom September 21 to September 28, 2012, a joint World Bank and Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) team visited Maseru, Lesotho to undertake a comprehensive assessment of debt management functions. The team used the Debt Management Performance Assessment (DeMPA) tool. In the governance and strategy area, there is a clear delegation to the minister of finance for borrowing and issuance of guarantees, but the mechanisms for coordination are not well developed. The coordination with macroeconomic policies generally meets the minimum requirements even though there is no clear separation with monetary operations. Cash management is not actively conducted despite very large cash balances in the Central Bank of Lesotho (CBL). There is no cash flow forecasting and no interest is earned on government cash balances. Strengths have been identified in the operational risk management area. There is a duality requirement for recording of both domestic and external loans. The debt records are not complete as domestic guarantees generally are not recorded. The treasury bonds and bills are recorded by the Public Debt Management Division (PDMD) with an average lag of three months.