MASERU
Friday 17 May 2024 marked a noteworthy day where the Central Bank of Lesotho (CBL) and its Strategic Partners officially launched a Technical Assistance Program. The event took place at the Lehakoe Recreation and Cultural Centre. The strategic partners that funded and supported the project were the World Bank and European Union respectively. This development’s main objective is to improve the country’s financial sector.
The Governor of the Central Bank of Lesotho, Dr Emmanuel M Letete expressed that this partnership comes at a time when the country is in a crisis for jobs and a better quality of life in general. The financial sector is put in place to benefit the Basotho. The World Bank and European Union came together to bring to fruition a vision of a more resilient and stable financial sector. The outcomes of this vision include inclusive growth and financial sector inclusion. He said that the products of the financial sector should be utilized for the betterment of the country’s state. He also added that it is highly imperative to develop a strategy and ensure that it works. Inclusion is chief and strides have been made however, it seems that they are not enough because not everyone is included especially women.
The collaboration will also assist in improving the payment system and provide meaningful and visual progress. Dr. Letete challenged everyone to reverse the adverse situation and motivated the serving of people. He said he believes that the partnership will go a long way and that 3 or 4 years down the line much difference will be noticeable, and all these can be achieved if we work together. Be that as it may, he did note that some of the challenges that have been met are cyber incidences, but he said that it is these challenges that strengthen and create a very resilient society.
Her Excellency Mrs Paola Amadei who is the Ambassador of the European Union in Lesotho said that in Lesotho, as in many counties, reliable and effective financial systems are a basic prerequisite of having a dynamic private sector that can thrive and create decent jobs. Coming together not only mitigates risks but can also unlock potential for innovation, resilience, and sustainable development. The European Union injected M6,000,000 which is expected to assist in enhancing key areas such as Financial Sector Development Strategy (FSDS), Policy and regulatory reforms, increasing Electronic Payment Acceptance (EPA) and strengthening Credit Reporting System (CRS). Currently, there is a technical assistant embedded in the Ministry and supporting it with public finance management reforms. The technical assistance that the Central Bank of Lesotho will benefit from this collaboration is the Rapid Response Window for Investments and Business Environment facility.
To the persisting challenges faced by the financial sector in the country, they will be alleviated in the following ways:
– Advancing and finalizing the development of Lesotho’s Financial Sector Development Strategy (FSDS) and setting high level outcome targets in key financial sector domains
– Identifying and prioritizing set of legal, policy and regulatory reforms to be implemented during the strategy’s implementation period.
– Increasing Electronic Payment Acceptance (EPA) both from the demand-side (consumers and merchants) and the supply side (payment of service providers).
– Strengthening Credit Reporting System (CRS) to also complement the activities financed by the CAFI project and engaging in a policy dialogue with the authorities on the validity and feasibility of the policy, institutional and infrastructure reforms recommended by the initial assessments.
Remarks made by a representative from the World Bank cited that the partnership allows the World Bank to aid the Central Bank of Lesotho and the Ministry. He said that as much as the strategy is a good one, but it will, just like any other have its own distinct challenges along the way. Data from 1995-2015 indicates that financial sector strategies help improve financial sector inclusion and stability. He advised that Lesotho’s financial sector should integrate multiple sub-sector strategies that are under development such as the financial inclusion strategy, financial education strategy and payment system strategy. With this program, the World Bank will also be permitted to undertake an electronic payment assessment.
The keynote address was delivered by Hon. Rets’elisitsoe Matlanyane who is the Minister of Finance and Development Planning who thanked the pioneers of this grand initiative. She commented that there is a need to consolidate so that efforts that are supported are not duplicated so that costs and time spent doing similar things is saved because not doing so hinders development. She said the government of Lesotho is committed to the development of this country. Furthermore, she said that the partnerships such as these should be done in an effective manner because not much is achieved when operation is done in silos. The financial sector is key and strategic as well as a basic requirement to a country’s development.
Hon. Matlanyane further stated that we live in a challenging landscape with a series of unprecedented shocks which have caused a bit of a drag when it comes to recovery. She said that she will always advocate for financial intermediation, and she strongly believes that Electronic Payment Infrastructure is essential as it will assist in the delivery of services more efficiently. She says that the ‘manual’ means of collecting money which ultimately puts people at the risk of handling cash must be done away with because most times that money does not end up where it is supposed to. Much more revenue can be collected if digital platforms are used. Finally, transactions should be done through systems where they are traceable and auditable.
