The Dynamics of Savings Mobilisation in Lesotho

Open access

Abstract

This paper provides a conceptual analysis of the dynamics of savings in Lesotho for the period 1960 to 2017. The study is motivated by the low and sometimes negative savings rate and the declining level of economic growth prevailing in Lesotho during the period from 1960 to 2017. The study analyses the behaviour of savings in Lesotho, using the savings trends for the country ever since it obtained independence in 1966. The study further examines the policies that the government of Lesotho has implemented in order to promote savings in the country. The government adopted a policy on rural savings and credit schemes as a means of promoting savings in Lesotho. The purpose of the policy is to improve access to credit for the rural population. The study has identified some challenges that impede savings mobilization in Lesotho. The major savings challenge in Lesotho is the lack of banking facilities in rural areas.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • 1. African Development Bank (2008) Annual Report.

  • 2. Agrawal P. (2000) Savings Investment and Growth in South Asia Indira Gandhi Institute of Development Research India.

  • 3. Agrawal P. (2001) The Relation between Saving and Growth: Co-integration and Causality Evidence from Asia Applied Economics Vol. (33) pp. 499-513.

  • 4. Alguacil M. Cuadros A. and Orts V. (2004) “Does Saving Really Matter for Growth? Mexico (1970 – 2000)” Journal of International Development Vol. 2. pp. 281-290.

  • 5. Bankole A.S. and Fatai B.O. (2013) “Relationship between Savings and Economic Growth in Nigeria” The Social Sciences and Medwell Journals 8(3) pp. 224-230.

  • 6. Carroll C.D. and Wel D.N. (1994) “Saving and Growth: A Reinterpretation” Carnegie-Rochester Conference Series on Public Policy 40: pp. 133-192.

  • 7. Central Bank of Lesotho (CBL) (1990-2017) Annual Reports. Maseru Lesotho.

  • 8. Central Bank of Lesotho (2004) Supervision Annual Report. Maseru Lesotho.

  • 9. Central Bank of Lesotho (CBL) (2012) Kingdom of Lesotho Rural Financial Intermediation Programme (RUFIP). Maseru Lesotho

  • 10. Centre for Financial Regulation and Inclusion (2014) “Lesotho. Demand Supply Policy and Regulation” Making Access Possible (MAP) Diagnostic Report.

  • 11. Domar E.D. (1946) Capital Expansion Rate of Growth and Employment Econometrica Vol. (14) pp. 137-147.

  • 12. FinScope (2011) “FinScope Consumer Survey for Lesotho” Conducted in Collaboration with the Central bank of Lesotho.

  • 13. Gavin M. Haussmann R. and Talvi E. (1997) “Saving Behavior in Latin America: Overview and Policy Issues” In Promoting Savings in Latin America.

  • 14. Harrod R.F. (1939) An Essay in Dynamic Theory Economic Journal Vol. (49) pp. 14-33.

  • 15. Haussmann R. and Reisen (Eds.) Organization of Economic Cooperation and Development and Inter-American Development Bank Paris.

  • 16. Ijeoma O. Moshoeshoe R.E. and Paramaiah Ch. (2011) “Financial Development Savings and Economic Growth in Lesotho: Evidence from Trivariate Causality Test” International Journal of Economics and Business Studies Vol. 1 Issue 2 pp. 41-55.

  • 17. International Labour Organization (ILO) (2011) The Performance of Lesotho Credit Union Movement: Internal Financing and External Capital Inflow Working Paper No. 17.

  • 18. International Monetary Fund (IMF) (2012) IMF Lesotho Country Report No. 12/101.

  • 18. Jappelli T. and Pagano M. (1994) Saving growth and liquidity constraints The Quarterly Journal of Economics Vol. 109 No. 1 pp. 83-109.

  • 19. Kalebe M. (2015) “Determinants of Private Savings in Lesotho” International Journal of Recent Research in Interdisciplinary Sciences (UJRRIS) Vol. 2 Issue 1 pp. 10-16.

  • 20. Kudaisi B.V. (2013) Savings and Its Determinants in West Africa Countries Journal of Economics and Sustainable Development Vol. 4 No. 18.

  • 21. Lukhele A.K. (1990) Stokvels in South Africa: Informal Savings Schemes by Blacks for the Black Community Johannesburg.

  • 22. Makoa F.S. (2004) Electoral reform and political stability in Lesotho African Journal on conflict resolution 4(2) 79–96 viewed 15 December 2017 from https://www.ajol.info/index.php/ajcr/article/view/39379/30304

  • 23. Mowatt R. and Zulu T. (1999) “Intra-Regional Private Capital Flows in Eastern and Southern Africa: a Study of South African Investment”.

  • 24. McKinnon R.I. (1973) Money and Capital in Economic Development Brookings Institution.

  • 25. Odhiambo N.M. (2009) “Savings and Economic Growth in South Africa: A Multivariate Causality Test” Journal of Policy Modeling 31(5) pp. 708-718.

  • 26. Saltz I.S. (1999) “An Examination of the Causal Relationship between Savings and Growth in the Third World” Journal of Economic Finance Vol. 23 pp. 90-98.

  • 27. Sekantsi L.P. and Kalebe K.M. (2015) “Savings Investment and Economic Growth in Lesotho: An Empirical Analysis” Journal of Economics and International Finance. Vol. 7(10) pp. 213-221.

  • 28. Shaw E.S. (1973) Financial Deepening in Economic Development Oxford University Press.

  • 29. Sinha D. and Sinha T. (1998) “Cart before the Horse? The Saving – Growth Nexus in Mexico” Economics Letters 61 pp. 43-47.

  • 30. Solow R.M. (1956) “A Contribution to the Theory of Economic Growth” Quarterly Journal of Economics 70(1) pp. 65-94.

  • 31. United Nations Conference on Trade and Development (UNCTAD) (2013) Service Policy Review for Lesotho.

  • 32. World Bank (2004) “Lesotho Financial Sector Review” The World Bank Financial Sector Division Africa Region paper number 28547.