Lesotho Disaster Risk Financing Diagnostic
This diagnostic study is prepared at the request of the Ministry of Finance (MoF), Government of Lesotho (GoL)and aims to identify options to strengthen the country's financial resilience to disasters. It includes a review of disaster response...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/555701578344878017/Lesotho-Disaster-Risk-Financing-Diagnostic http://hdl.handle.net/10986/33141 |
| Summary: | This diagnostic study is prepared at the
request of the Ministry of Finance (MoF), Government of
Lesotho (GoL)and aims to identify options to strengthen the
country's financial resilience to disasters. It
includes a review of disaster response costs and the current
disaster risk financing (DRF) arrangements of the GoL,
including institutional and legal frameworks, and proposes
some recommendations. Lesotho is prone to weather-related
perils such as droughts, floods, and storms. Drought affects
the largest number of people. For instance, a drought in
2015/16 affected almost half of the population. Over
two-thirds of the population—71 percent—is involved in some
form of agricultural activity. The majority of the rural
population engages in subsistence agriculture, working on
small rain-fed farms or are livestock producers. Disasters
can severely impact agriculture, thus devastating
livelihoods and increasing food insecurity in a country
already characterized by low agricultural productivity and
reliance on food imports. Natural disasters in Lesotho
jeopardize efforts to eliminate extreme poverty and boost
shared prosperity Poverty in the country is declining
slowly, and as of 2017 remained high, at 49.7 percent (at
the national poverty line). Disasters disproportionally
impact poor and vulnerable households, pushing them back or
further into poverty (Hallegatte et al. 2017). According to
the World Bank (forthcoming) Poverty Assessment, without the
2015/16 drought, poverty in Lesotho would have decreased
twice as fast over the past 15 years. Natural disasters can
also impact the macro-fiscal situation of the country. The
average annual cost of disaster response is estimated at
US$19.3 million, or 1.6 percent of the total budget
expenditure in the 2019/20 fiscal year. For more infrequent
and severeshocks, the costs can be much higher: US$31.8
million (or 2.6 percent of total budget) for shocks that
occur every 10 years, and 45.3 million US Dollars (or 3.8
percent of total budget) for shocks that occur every 50 years. |
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