By Staff writers
Maseru, Nov 19 (The Night’s Watch) – Government was owed over M1 billion by struggling state-owned enterprises as at 31 March 2018, according to the Auditor General.
Lesotho National Development Corporation (LNDC), Econet Telecom Lesotho (ETL), Lesotho Electricity Company (LEC) and Water and Sewage Company (WASCO) are the flailing entities indebted to government.
“During the year under review, principal payments of on-lent loans amounted to M10,236,300. The closing balance at the end of the year amounted to M1,029,114,831,” Auditor General Lucy Liphafa noted in her report on the consolidated financial statements of the government for the year ended 31 March 2018.
Government borrows money to lend (on-lends) to the state-owned enterprises for specific purposes consistent with its development policy objectives.
The state-owned enterprises are obliged to pay interest and repay principal sums in accordance with the terms and conditions agreed between the parties.
However, Liphafa found that “a significant total amount of M161,898,291 being principal amount of M133,467,189 and interest of M28,431,102 owing to the government were in arrears as at 31 March 2018”.
This implies that the total amount at risk is equivalent to almost six percent of the government’s annual budget.
The information regarding each borrower is as follows:
- WASCO was able to make the principal repayment on one account but could not pay interest on all its four accounts.
It has a debt of M63 million on its first account (BADEA 132 Maseru Wat Supply 1), M78 million on its second account (BADEA 133 Maseru Wat Supply 2) and M85 million on third account (OFID 134 Maseru Supp 2).
It has about M49 million debt on its fourth account (IDA 3995 Wat Sect Imp Project).
WASCO was in arrears of M99,610,983 and M20,872,031 for principal and interest payments respectively, as at 31 March last year.
“It is worth mentioning that in 2016/2017 WASCO did not make repayments on both principal and interest on all four accounts,” Liphafa noted in her report.
2. LNDC was in arrears of M18,306,456 and M7,559,071 for both principal and interest payments respectively. In the last two financial years ended 2017/2018, no repayments of the principal were made on its two accounts.
3. Telecom/Econet had not made any principal repayment during the financial year 2017/2018 and were in arrears of principal repayments of M15,549,751. Econet owes government over M400 million.
4. LEC had made repayments on both principal and interest and had no arrears. Its debt to government was M39,866,677 as at 31 March 2018.
“On the basis of the information provided, I repeat my previous years’ recommendation that the statutory bodies should be encouraged to pay their debts as they become due, to avoid inconveniencing the government with the burden of more debt to pay on behalf of defaulters,” Liphafa said. NW