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ANNEXURE 4- PORTFOLIO COMMITTEE ON THE NATURAL RESOURCES, TOURISM
AND LAND CLUSTER
• Introduction
On the 17th February, 2021, the Honourable Minister of Finance presented the Annual
Budget and Estimates of Revenue and Expenditure for the 2021/22 Financial Year to
the National Assembly, in terms of section 112(1) of the Constitution. Thereafter, the
Budget Estimates for the Fiscal Year 2021/22 were referred to various Portfolio
Committees for consideration and to make recommendations relating to budget
estimates, from their respectively assigned Ministries. This Report supplements the
main report, compiled and submitted to the House by the Portfolio Committee on the
Economic and Development Cluster.
• Methodology
Pursuant to Standing Orders No 95 (1) (a and d) and 95 (2) (a, b, c and d), the Portfolio
Committee held meetings with individual Ministries within its portfolio between 22nd and
26th February, 2021. The purpose of the meetings was to discuss their respective
2020/21 budget performances as well as their 20212/22 budget estimates, within the
context of the National Strategic Development Plan II and international obligations.
According to Standing Order No. 94 (d), the Portfolio Committee on the Natural
Resources, Tourism and Land Cluster is responsible for the Ministerial Portfolios of:
• Tourism, Environment and Culture,
• Water,
• Public Works,
• Mining,
• Energy and Meteorology,
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• Transport, and
• Forestry and Range and Soil Conservation.
This report is an outcome of the Honourable Minister of Finance’s budget presentation. It has
been structured to reflect individual Ministry’s mandates, 2020/21 budget performances, as
well as this year’s Ministerial budget allocations and plans for the year 2021/22. The report
also includes Committee’s recommendations.
3.0 MINISTRIES’ PRESENTATIONS TO THE PORTFOLIO COMMITTEE
3.1. MINISTRY OF TOURISM, ENVIRONMENT AND CULTURE
3.1.1 Revenue performance
The Ministry’s approved amount was M 4, 982,269.00; total collection was M822,520.80 and
the variance of M4, 159,748 was caused by the following:
• The Licensing Board has not sat since the beginning of January 2020 to consider
renewal and new applications due to Covid-19 restrictions;
• Non- renewal of site licenses due to Covid-19 restrictions;
• Most of the collections were made in Maseru district;
• The Ministry is unable to increase entry fees collection due to poor state of Tourism
facilities; and
• The Ministry had trouble in reconciling transfers into single Government account.
The Ministry anticipates a collection of M3,093,954.08 for the Financial Year 2021/22. New
sources of revenue have not been established in the coming financial year.
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3.1.2 Recurrent Budget for 2020/2021
The Ministry’s total amount released is M76,549,568.00, actual expenditure is M
72,783,590.00 and the variance is M3, 765, 978.00. The Ministry experienced the following
challenges:
• The unilateral cutting of budget by the Ministry of Finance on line-items where there
are commitments and contracts necessitated virements; and
• Due to Covid-19 restrictions, the Ministry was unable to perform most of its activities.
The Ministry has budgeted M79,135,798.00 for the Financial Year 2021/22.
3.1.3. Capital Budget
The Ministry’s approved budget from the Government of Lesotho was M23,490,000.00, the
total amount released was M10,220,746.00 and the actual expenditure was M10, 220,746.
Most of the donor funded projects did not perform well due to Covid-19 lockdowns; National
and regional workshops were needed before most activities are completed. M10, 000, 000.00
was reallocated from the project by the Ministry of Finance towards Covid-19 Fund.
The Ministry has budgeted M19,235,649.00 for the current financial year 2021/22.
3.1.4 Observations and Recommendations
The Committee made the following Observations:
• The proposed budget will negatively affect the implementation of Maloti Drakensberg
Transfonteir Program and Environmental Impact Assessment monitoring program;
• LTDC (Lesotho Tourism Development Cooperation) has no operational budget to
undertake market and policy research, destination marketing both locally and
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internationally, private sector capacitation, product development and investment
promotion;
• The Tourism and Creative sectors have been identified as sectors earmarked to increase
economic growth and generate income due to its rich heritage resources, however, the
Ministry’s budget allocation is not sufficient to implement such aspirations;
• Both Mpilo Hotel and Vitoria Hotel are no longer operational;
• The Ministry has not been able to collect rent from Lesotho National Convention Centre
as it is being used by Cabinet without payment of rent. The boardroom and other offices
at the National Library are also being used by the National Reforms Authority without
paying rent; and
• The Ministry is willing to improve on their previous mistakes by monitoring compliance of
their sector on signed contracts and issuance of new and renewal of licenses.
The Committee made the Following Recommendations:
• The Committee appeals to the House to grant LTDC funds to pay salaries, as the
current budget ceiling is too low and LTDC will not be able to deliver on its mandate;
• Innovative strategies should be implemented by the Ministry to improve revenue
collection; the LTDC needs to do effective marketing of the Country’s rich heritage
resources;
• The leases and prices on Government properties owned by the Ministry should be
reviewed in order to increase revenue; Cabinet and National Reforms Authority
should pay rent for the Ministry’s buildings that they are using; and
• The Ministry should help the Communities to protect botanical gardens to have
sustainable schemes.
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3.2. MINISTRY OF WATER
The Mission and Vision of the Ministry are aligned with SDG6 and NSDP II, and promise all
Basotho an improved standard of living through a well-developed and sustainable water
resource base and sanitation services by the year 2030.
3.2.1 Revenue performance
The Ministry’s 2020/21 approved budget was M1,061, 461, 378.00 and total collection of
revenue is at M887, 456, 817.00. This is due to the following:
• Low demand for contractors’ category registration and renewals;
• Limited consultancies undertaken due to Covid-19 restrictions; and
• More privatized Drilling works by private contractors were engaged in order to reduce
the backlogs.
The Ministry anticipates a revenue collection of M1, 178, 767,361.00 in 2021/22 Financial
Year.
3.2.2 Recurrent Budget
The Ministry’s expenditure is at 95% of the M122, 494, 095 total amount released for the
previous year. The variance was caused by the expenses to be covered in the last 2 months
of the financial year. The Ministry is requesting M145, 298, 836.00 for its recurrent budget for
2021/22.
3.2.3 Capital Budget
The Ministry’s expenditure is at 65% of the total amount released for the previous year. The
variance was caused by the following factors:
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• Delayed project consultancies and construction works due to covid-19 travelling
restrictions and lockdowns;
• Wetlands damage and degradation due to floods experienced recently; and
• Property damage in Polihali Dam Project and other rural water supply projects due to
heavy rainfalls.
The Ministry is requesting M709, 953, 701.00 for their 2021/22 Ministerial plans.
3.2.4 Observations and Recommendations
The Committee made the following observations:
• The reduced budget will negatively affect the maintenance of ‘Muela Hydropower
station and restoration of damaged infrastructure.
The Committee made the following recommendations:
• The Committee recommends that part of the Royalties should be saved in a revolving
account, to cater for maintenance and other urgent expenses.
3.3 MINISTRY OF PUBLIC WORKS
3.3.1 Revenue performance
The Ministry’s total collection of revenue for the Financial Year 2020/21 was M348,650.00
while the approved budget was M946,100.00. The variance of M597,450.00 was caused by
the following:
• Only 3 tenders were made for small projects; and
• There were no demands for podium-hire due to Covid-19 restrictions.
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The Ministry anticipates a collection of M831,500.00 for the Financial Year 2021/22. New
sources of revenue have not been established in the coming financial year.
3.3.2 Recurrent Budget
The Ministry’s approved budget for the previous year 2020/21 was M61,107,786, the total
amount released was M52, 076, 779.00, The actual expenditure was M44, 405,337.00 and
the variance was M7, 563, 717.00, which was caused by the following:
• Districts were not allocated funds due to insufficient budget; and
• Most of the budget is already committed, payments will be made by March,2021.
The Ministry has budgeted M73,982,477.00 for the Financial Year 2021/22.
3.3.3 Capital Budget
The Ministry’s approved budget for the Financial Year 2020/21 was M799,844,068.24, the
total amount released was M643,792,847.43 and the actual expenditure was
M389,053,714.23. The variance of M254,739,133.20 was caused by the following:
• The Ministry delayed to attend to remedial works for Oxbow, MapholanengMokhotlong road because of pending cases in the Courts of Law;
• The contractor had some challenges with performance of local subcontractors who
contracted Covid-19; and
• Some of the services are undertaken by most foreign personnel who were unable to
travel.
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M66, 500, 000.00 was reallocated from the project by the Ministry of Finance towards Covid19 Fund.
The Ministry budgeted M800,233,620.00 for the Financial Year 2021/22.
3.3.4 Observations and Recommendations
• Due to heavy rainfalls, most of the roads need rehabilitation, the Committee therefore,
recommends that the Ministry of Public Works work hand in hand with the Ministry of
Forestry on Integrated Wetlands Management Project to rehabilitate those roads.
• Most of the Ministry’s budget is utilized to pay contractors penalties, the Committee
therefore, recommends that the Ministry of Finance assists the ministry with those
penalties.
3.4. MINISTRY OF MINING
3.4.1 Revenue performance
The Ministry’s actual collection of revenue for the Financial Year 2020/21 was
M313,552,127.81. The approved budget was M 250, 360,208.85, after revision from
M465,984,927.84 and there was a variance of M63,191,918.96 (over collection) due to the
following:
• SMD and Mothae paid their due rent fees amounting to M3, 583, 492.00 well before
their exempted time; and
• Lets’eng Diamonds declared M60 million in dividends.
The Ministry anticipates a collection of M644,165,737.00 in the Financial Year 2021/22. There
are no new sources of revenue in the Financial Year 2021/22
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3.4.2 Recurrent Budget
The Ministry’s approved budget was M26,825,316.00. The total amount released was
M22,050,825.23 and the actual expenditure was M20,859,688.45. There was a variance of
M1, 191,172.78, making the overall performance at 95%. The Ministry has outstanding
payments to be made before the end of this financial year.
The Ministry has budgeted M23, 047, 760.00 for the Financial Year 2021/22 due to budget
ceiling and it leaves a shortage of M7,866, 377 in order to meet its recurrent expenses.
3.4.3 Capital Budget
The Ministry’s approved budget was M4, 157,905.00, total amount released was M845,
568.00 and the actual expenditure was M692, 914.00. There was a variance of M152,654.00
due to:
• A series of lockdowns which made it impossible to implement the field schedule as
planned;
• Samples could not be sent for analysis due to cross-border restrictions. Diifficult terrain
and heavy rainfall posed serious challenges for fieldwork to collect stream sediments
samples; and
• Delays in completing the laboratory design and also in issuance of payment
certificates for Mechanical, Electrical and Plumbing System (MEPS) Engineering consultants.
The Ministry has budgeted M2, 335, 294.00 for the Financial Year 2021/22.
3.4.4 Observations and Recommendations
• The Committee observed that budget ceilings have had a negative impact on the
current budget’s performance because most of the budget items do not have funds.
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3.5. MINISTRY OF ENERGY AND METEOROLOGY
The Ministry made the following achievements in 2020/21:
• Established of Lesotho Generation Company (LEGCO) to oversee the construction of
Phase I (30MW) and Phase II (40MW) of Ramarothole Solar Generation Facility and
also launched Ramarothole Phase I Project;
• Launched of the Lesotho Renewable Energy and Energy Access Project for off-grid
electrification in the country and grid extension to 6 industrial zones (Ha Belo, Tikoe
Phase II, Berea, Qacha’s Nek, Mokhotlong, Butha-Buthe, Mafeteng);
• Signed 8 Concession Agreements with private developers for the development of minigrids in rural areas to provide electricity to 6,000 households in the Matsoaing,
Tlhanyaku, Sehlaba-thebe, Lebakeng. Tosing, Sebapala, Sehong-hong and Mashai
villages;
• Signed Grant agreements for 7 Energy Centres (Kubung, Koebunyane, Linakeng,
Linakaneng, Malingoaneng, Litsoetse, Phamong); and
• Published Mini grids Regulations 2021.
3.5.1 Revenue performance
The Ministry’s total collection of revenue for the Financial Year 2020/21 is at 60% due to the
following:
• LEC still owes electricity supplied by ‘Muela Hydro Power Plant;
• Low response to tenders/adverts made due to required technical expertise;
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• Lockdown that happened in the first quarter of the Financial Year due to Covid-19; and
• Collection of February and March 2021 Oil Levy has not yet been received.
For the Financial Year 2021/22, the Ministry is anticipating a collection of M440,680,400.00.
3.5.2 Recurrent Budget
The Ministry’s expenditure is at 88% of total amount released for the year. The variance was
caused by late warrants issued and those released with lower amounts than requested.
The Ministry experienced the following challenges:
• Shortage of office space; and
• Lack of budget allocation for office furniture and equipment for the past four years.
The Financial Year 2021/22 budget is M28,802,381.00, which is lower than the previous
year’s budget by M404,972.00, resulting in M1.7million shortage.
3.5.3 Capital Budget
The Ministry’s expenditure is 86.5% of M882, 712, 182.00 total amount released for the year
2020/21. The variance was caused by the budget cut of M112,350,000.00 towards funding of
the COVID-19 response. The Ministry experienced the following challenges:
• Limited suppliers of Meteorological Equipment for procurement processes;
• Outstanding payment of M6,463, 348.00 on the Northern District Electrification Project;
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• Insufficient funds to cover operations and personal emoluments;
• Scarce qualified consultants resulted in retendering of services in the Meteorology
Sector thereby stalling the implementation of the projects;
• Inadequate financial resources to implement key programmes; the Ministry only
managed to electrify 8,500 households out of the budgeted 18,000 due to COVID-19
budget cut-off;
• The delay in accessing government co-finance resources resulted in difficulties in the
implementation of some activities, as well as delay in approval of virements; and
• Delay in project implementation due to COVID-19 restrictions.
The Capital budget for the Financial Year 2021/22 is M852, 000, 000.00, which is M22 million
lower than the previous’ year’s budget.
3.5.4 Observations and Recommendation
• The Committee observed a serious backlog of projects that are not fully completed;
• The Committee recommends therefore, that the Ministry should try and prioritise their
projects to be financed and implemented.
3.6. MINISTRY OF TRANSPORT
3.6.1 Revenue performance
The Ministry’s approved budget for the financial year 2020/21 was M20,059,178.00, the actual
collection was M32,584,206.80 and the variance of -M12, 525, 028.80 was caused by the
following:
• The new fees which were effected after the projects were made, based on the old fees;
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• Overcollection in vehicle inspection resulting from strict control measures implemented
by the Department of Traffic and Transport.
The Ministry also indicated that lockdown affected normal passenger flights resulting in lack
of collection for landing fees and airport service charges.
The Ministry anticipates a collection of M31,442,118 for the Financial Year 2021/22. New
sources of revenue have not been established in the coming financial year.
3.6.2. Recurrent Budget
The Ministry’s total amount released for the year 2020/21 was M58,530,711.76, the actual
expenditure was M36, 038,535.93 and the variance of M22, 492, 175.83 was caused by the
following:
• The Ministry has been operating under joint accounts for vehicle maintenance and
repairs and fuel and lubricants; this has resulted in payments alternating between the
Ministry of Public Works and the Ministry of Transport and causing under expenditure
on travel and transport; and
• The exit of budgeted Officers due to early retirement, compulsory retirement, transfer
on promotion and deaths during the Financial Year 2020/21;
The Ministry has budgeted M73,981,470.00 for the Financial Year 2021/22.
3.6.3. Capital Budget
The Ministry’s approved budget was M17,385,680.00, the total amount released was
M11,407,105.00 while the actual expenditure was M6,286,986.21. There was a variance of
M 5,120,118.79 which was caused by the commitments of the Moshoeshoe1 International
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Rehabilitation project, where Requests to Incur Expenditure (RIE) have already been made
to the Ministry of Finance to effect all payments and this money will be used before the end
of March, 2021.
M18, 000, 000.00 budgeted for Maputsoe Cross border was reallocated towards the fight
against Covid-19 by the Ministry of Finance, which resulted in failure by the Ministry to pay
the contractor; the contractor is now charging penalties of M426,000.00 on the delayed
payments.
3.6.4 Observations and Recommendations
The Committee made the following observations:
• There is lack of transparency when it comes to recurrent expenditure, whereby the
bills for Ministries of Transport and that of Public Works on certain line items have
been posted to the Ministry of Public Works, which results in both Ministries alternating
payments;
• The Committee noted that there’s a lot of corruption within the Ministry especially on
the services which generate the government’s revenue; and
• Trucks and other vehicles have a tendency of transporting overloaded equipment or
material across the country, which destroys roads, which costs the Government more
money to rehabilitate roads.
The Committee made the following recommendations:
• That both the Ministry of Transport and Public Works resolve the issues they have with
their service providers so that they may have separate bills;
• The Ministry should initiate strengthened measures and new Policies to curb
corruption; and
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• Weight bridges should be put in place at the borders and other parts of the country to
ensure that trucks and other vehicles are not making overloads when transporting
goods and equipment across the country.
3.7 MINISTRY OF FORESTRY, RANGE AND SOIL CONSERVATION
3.7.1 Revenue performance
The Ministry’s total collection of revenue for the Financial Year 2020/21 is M51,046.00 as
against the budgeted M177,500.00, due to Covid-19 restrictions which led to low demand for
wood.
The Ministry anticipates a collection of M113,300.00 in the Financial Year 2021/22.
3.7.2 Recurrent Budget
The Ministry’s approved budget for the Financial Year 2020/21 was M156,742,109.00, the
total amount released was M130,280,787.00 and the actual expenditure was
M91,248,157.63. The variance of M39,032,629.37 was caused by the following:
• Outstanding salaries for the month of March, 2021;
• payment of labourers for trips 3 and 4 to be made; and
• M1, 115,446.73 which will be utilized for special projects before the end of the
Financial Year 2020/21.
3.7.3 Committee Observations and Recommendations
The Committee made the following observations:
• The Ministry’s officers do not disseminate proper information about seedlings to the
farmers;
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• Labourers do not start work on time as information about their employment is not
circulated on time; and
• The Ministry needs M211, 961, 289.00 to allow the Integrated Watershed
Management Programme to operate for seven months.
The Committee made the following recommendations:
• That the Ministry should ensure they buy the seedlings that they had asked the farmers
to produce, as failure to do so may have negative financial implications on the part of
the farmers;
• That the Ministry sensitizes the farmers on their services and the quantity of seedlings
they are willing to purchase;
• That the Ministry works hand in hand with the Councillors so that information can be
transmitted smoothly to the wage paid workers; and
• That the House reconsiders the recurrent budget of the Ministry to enable the Ministry
to help fight some of the socio-economic impacts of Covid-19 pandemic.
4.0 General Observations and Recommendations
• The Committee observed that separation of the Ministry of Public Works and Transport
which was made during the financial year brought a lot of challenges for both the
Ministry of Public Works and the Ministry of Transport and it will be difficult to account
for certain funds in the future, as there were two Chief Accounting Officers in one
Ministry. The Committee, therefore, recommends that in future, separation of
Ministries be made before the beginning of the financial year so that there will be a
smooth transition.
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• The Committee noted that the budget ceiling across the Ministries was too low,
therefore the Committee appeals to the Minister of Finance to consider increasing their
budgets so that they can meet their objectives;
• The Ministries put in place good Policies, which were affected by a change of
governments; the Committee, therefore, recommends that there should be a law which
will bind governments to continue with those policies; and
• The Committee faced a challenge whereby some of the Ministries were not adhering
to the template submitted to them for their performance and budget estimates
reporting; the Committee, therefore, recommends that the National Assembly together
with the Accountant General and the Minister of Finance revise the current template
and come up with the user-friendly one for both the Ministries and the National
Assembly Portfolio Committees.
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LIST OF MEMBERS OF THE COMMITTEE
Hon. K. Mathaba (Chairperson)
Hon. T. G. Manyooko
Hon. M. M. Moremoholo
Hon. T. Ramatla
Hon. M. Lenkoane
Hon. L. D. Kompi
Hon. M. Muso Hon. M. Sello Hon. M.Molotsi
Hon. M. Moletsane
Hon. T. Kholumo
Hon. S. Ntsekele
Hon. L. Litšoane
Hon. T. Tšolo
Hon. P. S. Molefi
Hon. J. T. Molise
Hon. L. G. Mots’oane
Hon. S. S. Sekhamane
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Hon. E. Kaya
Hon. J. M. Sello