3 June 2016

Lesotho to Improve Efficiency and Poverty Impact of Transfer Programs

press release

World Bank Group approves $20 million for social assistance

The Government of Lesotho's efforts to alleviate poverty got a boost. This follows the approval of $20 million International Development Association (IDA)* credit by the World Bank Group Board of Executive Directors for a project that will help the Mountain Kingdom modernize social assistance programs and expand coverage of the poorest.

The Social Assistance Project will help Lesotho improve the efficiency and equity of five existing social assistance programs. These are the Child Grants Program, Orphan and Vulnerable Children Bursary Scheme, Post Primary Bursary, Public Assistance Program and Old Age Pension Program. Evidence shows that these social protection programs vary in their effectiveness in reaching the poor despite high levels of social spending by the Government of Lesotho.

"The Project will support a shift in the provision of social welfare in the country, to support both immediate but also long-term needs and vulnerability, promoting graduation," said Lesotho Minister of Social Development, Molahlehi Letlotlo.

The project aims to improve the administration of these programs by modernizing their processes and management of information, and ultimately save public resources. At the same time, the project will promote the expansion of coverage of the Child Grant Program, which has proven to be effective in alleviating vulnerability and encouraging schooling among poor children. It will also help expand the registry of poor households, to enhance the coordination of programs and facilitate identification of the poor. This project is in line with the World Bank Group's strategic goals of supporting the most vulnerable by ending extreme poverty and boosting the incomes of the poorest people in the world.

"Lesotho's level of social protection spending demonstrates a fierce commitment to fighting poverty and with this project we will help improve the efficiency of social assistance interventions which will lead to savings that can be used to further increase the coverage of poverty targeted programs and help many out of extreme poverty," said World Bank Country Director for Lesotho, Guang Zhe Chen. "This project will also improve the overall targeting accuracy of Lesotho social protection spending".

The project will comprise two complementary components: the first to strengthen the administrative efficiency and equity of selected social assistance programs in order to improve the coordination and harmonization of the delivery processes of these programs, as well as remove ghost beneficiaries from program databases.

Second, the project will provide implementation support, through technical assistance aimed at strengthening the capacity of the government to design, implement and monitor social assistance programs. This includes starting a pilot program of Livelihood Enhancement to further support household's income generating capacity in the medium and long term.

* The World Bank's International Development Association (IDA), established in 1960, helps the world's poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people's lives. IDA is one of the largest sources of assistance for the world's 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $19 billion over the last three years, with about 50 percent going to Africa.

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