Lesotho Budget Processes The budget process in Lesotho follows a formal cycle that begins in April and ends in March of the following year. It starts with policy planning and revenue forecasting, after which the Ministry of Finance formulates a draft national budget that includes a medium-term perspective spanning three years. The immediate fiscal year is detailed for allocations and expenditures, while the two outer years provide a framework for future planning. Parliament approves the budget only for the coming fiscal year, ensuring accountability, while the outer years serve as reference points. A key component of this process is the Medium-Term Policy Statement (MTBPS), or Budget Speech, which outlines macroeconomic trends, revenue and expenditure estimates, and strategic priorities to guide decision-making. After approval, funds are implemented across ministries, monitored for compliance, and later audited to inform future budgets. Medium-Term Expenditure Framework MTEF What is a Budget? A budget is a plan that shows how government expects to collect and spend money over a specific period, usually one year. It is more than just numbers—it reflects the country’s priorities and how resources will be used to improve services like health, education, and infrastructure. Why is it important? 1. It ensures public money is spent wisely and transparently. 2. Helps government plan ahead and avoid waste. 3. Allows citizens to see where funds go and hold leaders accountable. 4. Supports economic stability by balancing spending with available resources. How MTEF and PBB Make Budgets Smarter The Medium-Term Expenditure Framework (MTEF) helps government plan spending over several years, not just one, so projects and services can be sustained. It sets clear limits and priorities for the future. Program-Based Budgeting (PBB) makes sure money is allocated to programs that deliver real results—like improving schools or healthcare—rather than just listing expenses. Together, MTEF and PBB make the budget more transparent, accountable, and focused on outcomes that matter to citizens. Step-by-step Activities in the Budget process Here is an organized and detailed description of the budget process steps in Lesotho: Medium-Term Fiscal Framework (MTEF): Establishes the government’s medium-term fiscal strategy and priorities, setting the parameters for budget allocations and ensuring alignment with strategic goals and fiscal discipline. Approval and Issuance of a Call Circular: The Ministry of Finance issues a call circular to Ministries, Departments, and Agencies (MDAs) detailing the guidelines and deadlines for submitting their budget requests. MDAs Budget Requests: MDAs submit their budget requests for both expenditure and revenue, outlining their financial needs and expected revenues for the upcoming fiscal year. Budget Officers' Review: Budget officers review the budget submissions from MDAs, evaluating both expenditure and revenue requests for accuracy, feasibility, and alignment with strategic priorities. Budget Hearings: Conducted to discuss and assess the budget requests submitted by MDAs. These hearings allow for detailed examination and adjustments based on feedback and strategic priorities. Executive Budget Approval: The executive, including the relevant ministries and the finance department, reviews and approves the consolidated budget proposal before submission to Parliament. Budget Adoption by Parliament: Parliament reviews the executive’s budget proposal, making amendments if necessary, and votes to adopt the final budget. Budget Implementation: Once approved, the budget is implemented according to the allocations and plans. MDAs carry out their activities and expenditures in line with the approved budget. Monitoring and Evaluation: Ongoing monitoring and evaluation of budget implementation to ensure that expenditures are in line with allocations and that financial resources are used efficiently and effectively. Auditing and Oversight: Conducted by audit institutions to ensure transparency, accountability, and adherence to budgetary regulations and standards. This step involves reviewing financial transactions and reports to identify any discrepancies or issues. Medium-Term Budget Framework (MTBF) The Medium-Term Budget Framework (MTBF) aligns with the Medium-Term Expenditure Framework (MTEF) and the Medium-Term Fiscal Framework (MTFF) to enhance public financial management. The MTBF outlines budget priorities over three to five years, while the MTEF translates these into detailed expenditure plans. The MTFF addresses overall fiscal health, including revenue and debt management. Together, they improve planning, coordination, and accountability, supporting effective governance and sustainable development.
