LESOTHO HAS THE "BEST PERFORMING OTA PROJECT IN THE WORLD"

UNCLAS MASERU 000409 SIPDIS DEPARTMENT FOR AF/S AND INR; TREASURY FOR DIRECTOR OF OTA, MIKE RUFFNER AND BILL REMINGTON E.O. 12958: N/A TAGS: PREL TRSY LT SUBJECT: LESOTHO HAS THE "BEST PERFORMING OTA PROJECT IN THE WORLD" -------------- Summary -------------- ¶1. Ambassador Rob Nolan and Mike Ruffner, the visiting director of the Department of Treasury's Office of Technical Assistance (OTA),met with the Minister of Finance on Friday, November 13. The discussion focused on the various projects which the OTA has undertaken in the Kingdom. OTA is very pleased with its Lesotho projects, and the director's visit to Lesotho came because he wanted to see for himself the Lesotho projects, which his Washington staff describes as the "best performing project in the entire world." -------------- -------------- Minister explains delays, reaffirms commitment to Treasury's work -------------- -------------- ¶2. Dr. Timothy Thahane, Lesotho's Minister of Finance, indicated in the meeting that he has made a personal commitment to get the public finances of Lesotho sound and strong before he leaves office. He repeatedly expressed his appreciation to Treasury for all the support they have given the Government of Lesotho. He also mentioned that the next budget, which will be presented to the public in April 2010, will prioritize strengthening the financial sector. To that end, he expressed a strong desire that current and future OTA projects focus on building capacity; training the local staff to take over initiatives; and leaving behind an infrastructure that is sustainable once OTA advisors have departed. Thahane reassured Director Ruffner that his concerns about delays in the development of the country's Financial Investigative Unit (FIU) are unnecessary. Things might take a little longer in Lesotho, he said, but they have to follow a certain procedure, and starting things off correctly means that there should be no problems once the FIU becomes operational. -------------- Lesotho is a good partner for OTA -------------- ¶3. OTA has several projects on-going in Lesotho. One of the unique features of OTA's involvement in Lesotho has been the source of funding. Current OTA projects in Lesotho are funding by the United Kingdom's Department for International Development (DFID). Projects include an anti-money laundering system, which resulted in a comprehensive anti-money laundering act which established the FIU; engagement with the Debt Management working group and development of a debt management manual; and an audit management process, including development of standard operating procedures for audits. As evidenced by the anti-money laundering law and the concrete products which have been produced, all these programs have been highly successful. ¶4. In addition, it is likely that an OTA budget advisor will be posted to Lesotho in early 2010 to provide "budget and financial accountability technical advisory services" to the Minister of Finance, as well as the Ministry of Finance's budget controller and staff. The budget advisor would work in the areas of budget analysis and development, budget execution monitoring and evaluation, capacity building of the department of budget, cash management training, and other areas that the Ministry identifies. The advisor would be funded by OTA, under the oversight of the U.S. Ambassador, and under the supervision of the OTA associate director for budget and financial accountability. -------------- Comment -------------- ¶5. Post is extremely grateful to OTA for the work that they have done to strengthen the Lesotho Revenue Authority. We support the Minister's priority of strengthening the financial sector and encourage a more transparent budget and taxation process. We also welcome the addition of an OTA budget advisor to our growing Mission team. Lesotho is a country of relatively low levels of corruption and very low levels of revenue collection. We hope that OTA's assistance will help to increase levels of revenue collection while at the same time, creating a more transparent system which will make it even more difficult for unscrupulous individuals to take advantage of this economically challenged nation. NOLAN