Case Study 1. Old Age Pension, Lesotho OVERVIEW In the April 2004 budget speech for the 2004/05 ﬁnancial year, the Government of Lesotho announced the introduction of a universal noncontributory pension for all citizens aged 70 and over. The pension came into force six months later in November 2004, set at a level of M150 (US$25) per month, and was formally legislated as an entitlement in the Old Age Pensions Act passed in January 2005. In taking this step, Lesotho became one of only seven sub-Saharan African countries to provide noncontributory pensions, the other six being Botswana, Mauritius, Namibia, Senegal, South Africa and Swaziland. In this group, Senegal and Lesotho are much poorer countries than the others, having per capita GNIs of US$700 and US$950 respectively in 2005. The Old Age Pension (OAP) cost M126 million (US$21 million) in its ﬁrst full ﬁscal year of operation, 2005–06. This corresponded to about 2.7 per cent of government expenditure. By May 2005, the pension was reaching 69 046 beneﬁciaries, or roughly 3.3 per cent of the total population. Owing to the lower life expectancy of men in Lesotho, as in most human populations, roughly 60 per cent of recipients are women and 40 per cent men. At the time of its introduction the pension amount was almost exactly equal to Lesotho’s oﬃcial national poverty line, set at M146 (US$24) in 2002. On its return to power after the 2007 general election, the government announced...
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