Lesotho is a small landlocked countrywith a homogenous population of 2.1 million. Lesotho'sgross domestic product (GDP) per capita was 1,023 dollarsand gross national income (GNI) per capita was 1,080 dollarsin 2010. The country also faces numerous challenges to itssocial and human development. In this context, moreattention on the role and quality of public investment iswarranted. To improve public accountability andtransparency, the Government of Lesotho (GoL) introduced theautomated integrated financial management information system(IFMIS) in April 2009. The study directly responds to anexplicit request of technical assistance from the ministryof finance and development planning (MoFDP) and aims atsupporting the GoL in its major reform efforts to enhancethe efficiency of public investment management (PIM) andincrease the "value for money" in capitalspending. The overarching objective of this study is tosupport the GoL in its efforts to prioritize public resourceallocation and enhance efficiency in capital spending, withthe ultimate goal of contributing to improved governance,service delivery, and economic growth. The work is alignedwith the World Bank country assistance strategy (CAS) 2010to 2014, in particular its first pillar on fiscal adjustmentand public sector efficiency. This report emphasizes thecomplementary aspects of the institutions, incentives,capacity, and process-related constraints to the functioningof PIM. The focus of this report will also complementongoing public financial management (PFM) support by otherdevelopment partners. The report is presented in fourchapters, which are organized as follows: chapter one offersa macro-level country analysis; chapter two presents recenttrends in public investments; chapter three focuses oninstitution mapping and the diagnostic assessment of the PIMsystem; and chapter four concludes with policy implications.
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