Govt to stop settling MPs’ loans
THE government says it will no longer pay loans on behalf of defaulting legislators in the event of a premature dissolution of parliament.
This was said by Finance Minister Moeketsi Majoro when he presented his 2020/21 budget speech to parliament.
Each MP qualifies for a M500 000 interest-free loan from any local bank as part of their employment benefits. They are supposed to repay the loan over the course of their five-year term in parliament. The government underwrites these loans and often steps into repay them whenever the MPs default especially after the premature end of their tenures due to the instability of Lesotho’s politics which has seen three governments prematurely collapse in the space of five years in 2012, 2015 and 2017.
In December 2017, the government settled M43 million on behalf of MPs from the ninth parliament. This after it had spent another M32 million in April 2015 for the defaulting eighth parliament legislators after a snap election.
But last week Dr Majoro said the government wants to do away with the practice by amending the relevant laws.
“I can confirm that cabinet has approved that MPs’ loans be eliminated and that the government should under no circumstances settle these loans,” Dr Majoro said.
In her 2018 audit report of the government’s consolidated financial statements, Auditor General Lucy Liphafa described the practice of repaying loans on behalf of defaulting MPs as an “injustice”
“The repayment of outstanding loans for honorable members of parliament following dissolution of parliament before the expiration of the constitutionally specified term constitutes a substantial loss of funds to the government.
“The loss calls for the need for the government to consider an enactment of the law that will alleviate unjust enrichment such as prohibiting honourable members whose loans were previously written off to have access to new loans,” Ms Liphafa said.
The parliamentary Public Accounts Committee (PAC) estimated that the government spent M76 million in settling the MPs loans for the eighth and ninth parliaments.
The PAC therefore recommended that all sections relating to the statutory loans of the Members of Parliament Salaries (Amendment of schedule) Regulations should be repealed to stop the government from paying on behalf of the MPs.