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International Monetary Fund. African Dept.
Lesotho has been simultaneously hit by the pandemic, declining transfers from the Southern African Customs Union (SACU), and the impact of the war in Ukraine. The pandemic exacerbated the impact of sluggish regional performance, climate shocks, and longstanding structural issues such as regulation, governance, political stability, financial inclusion, and diversification. Public expenditure has continued to increase, such that the decline in external transfers precipitated significant financing pressures and growing domestic arrears. With limited inflows to the private sector, the resulting public sector-driven external imbalances have continued to put pressure on international reserves needed to maintain the exchange rate peg.
International Monetary Fund. African Dept.

maintains one exchange restriction arising from single discretionary allowances of LSL1 million per individual per calendar year, for residents over 18, and of LSL200,000 on the same basis for residents under 18. Foreign exchange transactions beyond these limits need CBL approval. As of May 16, 2022, the maloti rate per U.S. dollar was LSL16.21. Article IV Consultation : The 2019 Article IV Consultation was concluded by the Executive Board on April 26, 2019. Lesotho is on the standard 12-month Article IV Consultation cycle. Capacity Development : The Fund has been

International Monetary Fund

are limited to certain public sector entities. Foreign exchange rationing Elimination of the foreign exchange budget under which most current transactions were regulated and supervised by the Central Bank of Libya (CBL). With the elimination of the foreign budget, access to foreign exchange for current transactions is now unrestricted and does not require CBL approval. Exchange taxes The 15 percent GMR tax has been made explicit at the unification of the exchange rate. A tax of 15 percent is levied on the purchase of foreign exchange for the

International Monetary Fund
The Libyan economy remains saddled with extensive controls, restrictions, and subsidies that continue to distort prices and resource allocations, hinder efficiency and competitiveness, and impede the performance of the economy. Executive Directors commended the liberalizing of the economy, and stressed the need to improve macroeconomic management, remove trade restrictions, accelerate structural reforms, and tighten monetary and fiscal policies. They supported the authorities' request for technical assistance from the IMF in the areas of statistics, financial programming, development of money markets, and financial instruments, and tax reform.
International Monetary Fund
This Selected Issues paper on the Kingdom of Lesotho reviews the broad objectives and key institutional features of the Common Monetary Area (CMA) relating to currency arrangements. The CMA Agreement provides for the three small member countries to have access to South African capital and money markets, but only through prescribed investments or approved securities that can be held by financial institutions in South Africa. Lesotho’s exchange rate arrangement under the CMA shares certain characteristics of a currency board.
International Monetary Fund

nonresident, or a resident. Outward direct investment Effective June 27, 2003, residents are free to invest abroad through domestic banks up to the equivalent of M 250,000 a person. Subject to CBL approval, resident corporations and businesses are allowed to invest abroad up to the equivalent of M 50 million in SACU countries or M 30 million in other countries. Previously, outward direct investments were prohibited. Inward direct investment Effective June 27, 2003, nonresidents may invest freely in Lesotho if the maturity of the investment exceeds 365

International Monetary Fund. African Dept.

, allowing previously-excluded socioeconomic groups to access financial services. Telecommunication companies are providing insurance products and are also planning to extend microloans in the next months. Banks are catching up by launching e-wallets and establishing their own agent networks. Post Bank is awaiting CBL approval to start issuing mobile money, and a decision is expected soon. While the increased access to financial services contributes to financial deepening and inclusion, the authorities should continue to closely monitor any potential build-up of financial

International Monetary Fund
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
International Monetary Fund

the CBL's approval, advance payment of up to 33.3 percent of the ex-factory cost of capital goods if suppliers require it or if it is normal practice in the trade concerned. c. Advance import deposits No. 3. Documentation requirements for release of foreign exchange for imports a. Domiciliation requirements Yes b. Preshipment inspection Yes c. Letters of credit Yes d. Import licenses used as exchange licenses Yes e. Other Yes 4. Import licenses and other non tariff measures Yes

International Monetary Fund. African Dept.
This 2019 Article IV Consultation highlights that while international reserves are at adequate levels and banks remain well-capitalized in the Republic of Lesotho, domestic arrears are beginning to impact the broader economy, exacerbating growth challenges posed by structural impediments. The recently passed FY2019/20 budget envisages an ambitious consolidation that could begin to lay the groundwork for a transition to private-sector driven growth. Construction related to the second phase of the Lesotho Highlands Water Project will support medium-term growth, and the diamond and textile industries have positive prospects. Fiscal adjustment is needed to address government arrears, buttress debt sustainability, and safeguard the link to the rand. Generating strong and inclusive growth will require improved public service delivery and the private sector to become the primary engine of job creation. Better targeting of the government’s resources, Public Financial Management reforms, and reorienting both expenditures and the role of government in the economy will be critical to achieve these goals.