Lesotho - Supplemental Financing of the Lesotho Tax Modernization Project (LTMP) (AFDB-P-LS-KF0-004)

  • Lesotho
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • African Development Bank (AFDB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Jun 30, 2021
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
The Kingdom of Lesotho
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
  • Finance
  • Law and Government
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 4.33 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ AFDB website

Updated in EWS Jun 28, 2022

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to bank provided information, the overarching development objective of the Project is to promote economic growth and poverty reduction by improving effectiveness of tax administration to create fiscal space (i.e. increased tax revenues) to finance the country's development plan. The specific objective is to strengthen tax administration capacity by expanding the tax base, modernizing collection and compliance procedures, amending, and consolidating the legal framework, and strengthening the institutional framework.

The proposed intervention is an ADF Loan of UA 3 million to the Kingdom of Lesotho for the supplementary financing to the Lesotho Tax Modernisation Project (LTMP) approved in 2017 for an original estimated cost of UA 5.0 million. The Project is aligned to (a) Lesotho's long-term development agenda as laid out in the National Strategic Development Plan II (NSDP II, 2018/19-2022/23), which places renewed emphasis on addressing the challenges of unemployment and poverty through promoting an inclusive and sustainable economic growth. The LTMP activities are advancing well with several contracts having been signed. Notwithstanding the progress, the Project is faced with a financing gap due to cost overrun. Some activities, especially e-taxation, VAT compliance solution, and data analytic capacity were under budgeted and during project implementation, the actual costs for the such activities (both for goods and consulting services) have been determined. The supplementary financing proposal seeks to enhance the realization of the Project development objective. These additional resources are provided to finance existing shortfalls under e-Taxation and VAT compliance which are the backbone of the project. The Project components remain the same as approved under the on-going LMTP and are as follows: (i) Enhancing tax modernization, (ii) Institutional strengthening, and (iii) Project Management Support. It is anticipated that all the activities will be completed by 30th June 2023.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

U.A 3,000,000

Contact Information
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Email k.gebre-selassie@afdb.org 


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The Independent Review Mechanism (IRM), which is administered by the Compliance Review and Mediation Unit (CRMU), is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an African Development Bank (AfDB)-financed project. If you submit a complaint to the IRM, it may assist you by either seeking to address your problems by facilitating a dispute resolution dialogue between you and those implementing the project and/or investigating whether the AfDB complied with its policies to prevent environmental and social harms. You can submit a complaint electronically by emailing crmuinfo@afdb.org, b.kargougou@afdb.org, b.fall@afdb.org, and/or s.toure@afdb.org. You can learn more about the IRM and how to file a complaint at: https://www.afdb.org/en/independent-review-mechanism/ 

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