The World Bank, in collaboration with the Government of Lesotho, released a new report assessing the performance of Lesotho’s social protection policies and programs. As the country continues to face weak growth and limited fiscal resources further constrained by the economic shocks of the COVID-19 pandemic, strong effective social protection programs are needed to help protect vulnerable people and ensure that they can meet their basic needs.
The Social Protection Program and Systems Review acknowledges Lesotho’s progress to establish safety net systems and programs and suggests a selected range of policy options to increase fiscal savings and improve the coverage and effectiveness of the programs.
“This report will help inform the design and implementation of our social protection programs and policies to ensure that they are efficient and equitable,” said Matebatso Doti, Minister of Social Development for Lesotho. “It will also help us improve the efficiency gains of existing programs to allow us to fund more programs such as the disability and infant grant.”
Lesotho has made significant investments in developing social protection programs over the last 20 years. The country’s social protection programs tackle vulnerabilities throughout the life cycle from children to the elderly. However current programs are costly with social protection spending representing about 6.4%of gross domestic product (GDP) making Lesotho the highest spender among any African country.
The review found that while several social assistance programs in Lesotho are effective in reducing poverty, they have low cost-effectiveness and poor targeting with a large share of the support going to the non-poor. The operational systems used to deliver the programs remain largely manual and have leakages which impact the efficiency of the programs. Simulations show that if programs such as tertiary bursaries were retained only for poorer students with savings reallocated to a transfer targeted to poorer households, the national poverty rate could be reduced by 3.2 percentage points at the food poverty line.
“It is our hope that this research will enhance policies to ensure that the important investments the government is already making in social protection will help to break the cycle of poverty for the next generation, keep children healthy and in school, and help households transition from social grants for their livelihoods to more sustainable income generating opportunities,” said Marie Francoise Marie-Nelly, World Bank Country Director for South Africa, Botswana, Namibia, Lesotho and Eswatini.
The report suggests that the government reviews the allocation of spending across social protection programs with to the aim of improving value for money while enhancing their benefits for the recipients. It suggests scaling and re-allocating social protection spending towards poverty-targeted programs such as the child grant program whose total costs accounts for only 0.15%of GDP. It also suggests improving social protection systems by shifting payments from cash to digital payments and introducing “Cash Plus” measures to link beneficiaries to productive activities, and link child grants to better investments in human capital.