Over 70 percent of Lesotho’s populationlive in rural areas and depend directly or indirectly onagriculture for their livelihood, and growth in the sectoris crucial for poverty reduction. Despite the importance ofgrowth in agriculture, productivity remains low and valueaddition activities in the sector are limited. Lowinvestment in agriculture has left the sector vulnerable toadverse weather impacts and poorly equipped to adapt toclimate change. Low agricultural output and productivity,poverty, and heavy reliance on food imports are closelyintertwined with food and nutrition insecurity in Lesotho,which impose high costs on the country. Recognizing theagriculture sector’s importance for job creation andinclusive economic growth under a new growth path led by theprivate sector, the Government of Lesotho (GoL) selectedagriculture as one of four productive sectors central in itsnew national strategic development plan (NSDP) II for2018-19 to 2022-23, currently under development. Tostrengthen the alignment between objectives and theallocation of public expenditures to the sector, the GoLasked the Bank for support to agriculture public expenditurereview (AgPER) as part of a larger GoL effort to strengthenpublic financial management. The report is structured asfollows: chapter one gives introduction: why an agriculturepublic expenditure review for lesotho? Chapter two providesan overview of the agriculture sector in Lesotho, outlinessome of its main challenges, and provides an overview of themain policy documents that guide investment in the sector.Chapter three describes the data and methodology used forthe analysis of this AgPER and is particularly intended fortechnical staff who work with agricultural budgeting andexpenditures. Chapter four is the main analytical chapter.It describes the budget cycle for allocation and reportingpublic expenditures to agriculture (PEA); looks atdiscrepancies between budgeted and executed amounts;assesses the nature of PEA between 2011 and 2017; discusseshow Lesotho’s PEA align with its own policy objectives forthe sector as well as with international commitments,especially under comprehensive Africa agriculturedevelopment program (CAADP); and seeks to understand if thepublic support to the sector is of a nature that may crowdout private investment. Chapter five summarizes the findingsof the analysis and provides recommendations for how tostrengthen effectiveness and quality of public expendituresto the agriculture sector.
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