Financing for Education and Health in Lesotho: Proposals for Sustainable Alternative Mechanisms

The trend of private investment in social services delivery has made an intrinsic mark on how African governments allocate resources to finance sectors such as education, health, public services and social protection. In Lesotho it has led to an increase in private sector role and subsequent privatisation of education and health to the extent that government ministries have clung on to the mantra of privatisation and private public partnerships (PPPs) as the financial panacea to resource mobilisation and freeing up of fiscal space for development. As such, it is important to note the risks associated with privatisation that include higher user fees, high fiscal risks for governments, limited development impact and the exacerbation of inequality. This paper makes proposals on the need to institute sustainable alternative financing to not indebt the Government of Lesotho. These include amongst others broadening sin taxes and earmarking renegotiating the SACU revenue sharing agreement and modernisation of the country’s tax systems to plug leakages.