Chapter four: Economic governance and management and Auditors was established to advise the government on the latter (Basel II). Finally, the CRM found that the Insurance Supervisory Principles had been fully adopted without there being any indication as to whether they had been signed. iii. Recommendations 372. The APR Panel recommends that Lesotho: • Direct each ministry or agency to keep proper records of the standards, codes and practices that it has agreed to as the basis for monitoring their status adequately. Periodic reports should be submitted to the Ministry of Foreign Affairs and International Relations for centralised recording. These reports should indicate progress regarding the domestication of agreed standards and codes in the context of government efforts to improve economic governance (Ministry of Justice and Human Rights and Correctional Services, Ministry of Foreign Affairs and International Relations). 4.3 Assessment of performance on APRM objectives Objective 1: Promote macroeconomic policies that support sustainable development 106 i. Summary of the CSAR 373. Lesotho’s macroeconomic policy framework is defined in the context of several regional integration arrangements, to which the country is a signatory, particularly SACU, the SADC and the Common Monetary Area (CMA). The latter includes South Africa, Namibia and Swaziland. Monetary policy management in Lesotho is determined by the country’s historic relationship with South Africa. The CMA allows for unrestricted (unrecorded) flow of funds for both current and capital transactions within the area. The smaller economies, especially Lesotho and Swaziland, have limited control over monetary policy and none over exchange rates. 374. Lesotho’s development policy making and economic future are thus firmly linked to these arrangements. The discussions of Lesotho’s policy framework which follow are conducted in the context of these arrangements and assess the extent to which the framework and its ensuing policies are supportive of sustainable development. Fiscal policy 375. The CSAR correctly observes that, given the relative impotence of monetary and exchange rate policies, the main instrument of demand management in Lesotho has been fiscal policy. This is done by introducing measures to improve revenue collection and by setting ceilings on public expenditure. Lesotho’s revenue consists of four major components: customs or SACU revenue; non-SACU tax revenue (mostly income tax and value-added tax, or VAT); nontax revenue; and grants.