From September 21 to September 28, 2012,a joint World Bank and Macroeconomic and FinancialManagement Institute of Eastern and Southern Africa (MEFMI)team visited Maseru, Lesotho to undertake a comprehensiveassessment of debt management functions. The team used theDebt Management Performance Assessment (DeMPA) tool. In thegovernance and strategy area, there is a clear delegation tothe minister of finance for borrowing and issuance ofguarantees, but the mechanisms for coordination are not welldeveloped. The coordination with macroeconomic policiesgenerally meets the minimum requirements even though thereis no clear separation with monetary operations. Cashmanagement is not actively conducted despite very large cashbalances in the Central Bank of Lesotho (CBL). There is nocash flow forecasting and no interest is earned ongovernment cash balances. Strengths have been identified inthe operational risk management area. There is a dualityrequirement for recording of both domestic and externalloans. The debt records are not complete as domesticguarantees generally are not recorded. The treasury bondsand bills are recorded by the Public Debt ManagementDivision (PDMD) with an average lag of three months.
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