Central Bank of Lesotho (CBL) has issued a stern warning to government ministries, advising them to accept payments made with South African banknotes.
This comes after reports that ministries have been rejecting payments in Rands, citing concerns over counterfeit notes or illegal money.
The CBL said such practices could have serious repercussions on Lesotho's economy and its international trade relations.
This was said during a stakeholder engagement meeting between the CBL and government revenue-collecting ministries held at the Lehakoe Recreational and Cultural Centre yesterday.
The ministries were trained on how to distinguish between fake and counterfeit money.
Rejecting South African banknotes, according to CBL, is not only unlawful but also detrimental to the country's economic growth.
Many government officials, however, expressed concerns about the lack of equipment, such as UV light detectors, to verify the authenticity of the money.
CBL's Head of Legal, Thato Ramosena, explained that the issue arose after a series of ATM bombings in South Africa, where dye-stained money entered circulation in Lesotho. Institutions such as supermarkets and retailers are advised to use detection machines, to detect any stained notes, rather than reject the currency outright.
"The Maloti and Rand are equal in value and circulate together in Lesotho. Refusing to accept the Rand can have negative consequences, as both currencies are integral to our economy," Mr Ramosena said.
He said refusing South African banknotes disrupted economic transactions and hindered government operations, as ministries were mandated to accept payments for services.
Mr Ramosena also noted that rejecting the Rand breached the Multilateral Monetary Agreement which allows free flow of capital between Lesotho, South Africa, eSwatini, and Namibia. Such actions could result in sanctions or penalties against Lesotho on international markets.
CBL's Statistics and Forecasting Officer, Palesa Manoza, explained that counterfeit currency could lead to a loss of public confidence in the monetary system, which in turn harms the economy. She warned that counterfeiters often targeted large denominations like M100 and M200 notes.
However, Nthupi Marathane from the Department of Crops in the Ministry of Agriculture, expressed frustration over their lack of equipment, explaining that they receive large amounts of South African banknotes from farmers purchasing fertilisers and seeds.
"We receive large sums of money, sometimes up to R80 000, without any machines to detect if the money is real or fake. Sorting through these large amounts manually makes it difficult to spot counterfeit notes," Marathane said.
She said due to time constraints and the pressure to serve clients quickly, the department often rejected South African banknotes.
The Acting Director of Operations at CBL, Mamokhali Shale, reiterated that it is illegal for ministries to deny services to Basotho when they present legal tender.
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"You cannot refuse service without evidence that the money is counterfeit. We receive numerous complaints from citizens denied services despite having legitimate money."
Ms Shale urged ministry officials to report to their managers and request the necessary equipment, such as detection machines, to help them properly verify banknotes.
"The pressure should be on your bosses to provide you with the tools you need. Denying services to Basotho without proof of counterfeit money is unlawful," she said.
She also warned that Basotho have the right to take legal action against ministries that refuse to accept legitimate currency and noted that the CBL itself may take legal steps in response to these violations.
