The objectives of this note areidentifying the fiscal implications and the shortcomings ofthe corporate governance of the SOE sector through aninitial stock taking of the sector.This policy note firstpresents a description of the SOE sector in Lesotho,analyzing its scope, size, performance and major problems.For the purposes of this Policy Note, the term SOE refers toall legal entities which undertake commercial activities onGovernment’s behalf, although in reality some SOEs have bothcommercial and social objectives. The coverage of this studyis limited to commercial, revenue generating enterpriseswhere Government has a significant control through full orpartial ownership. It does not include non-revenuegenerating statutory or regulatory bodies which dependentirely on transfers from Government. The policy note thenfocuses on the financial relations between the state and theSOE sector, examining the sector's impact on governmentfinances. This is followed by a section on the governanceframework for the sector, which identifies strengths andweaknesses and opportunities for improvement, this isimportant to identify opportunities for government tostrengthen its management of SOEs, increase the transparencyof the sector and, eventually, improve their performance.The final section makes policy recommendations based on theresearch findings and conclusions and on international bestpractices. A section at the end of the Executive Summaryproposes an action plan and timetable for an SOE program.
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