The governments of Lesotho and the United States (US) will today launch the Entry Into Force (EIF) arrangement of the MCC Compact II to unlock the USD$322 million (M6.7 billion) Lesotho health and horticulture compact signed in 2022.
The launch comes after the Lesotho government successfully passed the three outstanding pieces of legislation which were a requirement for implementation of the project.
These are the Labour Code Amendment Act 2024, Administration of Estates and Inheritance Act 2024 and Occupational Safety and Health Act 2024.
Prime Minister Sam Matekane said the laws were collectively crucial in protecting rights of workers and those of women and children, in particular those who were not able to defend themselves from the injustices entrenched in society by cultural practices.
Now that the project is finally off the ground, Lesotho Times (LT) journalist, Mathatisi Sebusi, had a one-on-one interview with the MCC Deputy Chief Executive Officer, Chidi Blyden, to establish whether Lesotho was delivering to the US government’s satisfaction and how the funds will be rolled out.
LT: Now that we are at the MCC Compact II implementation stage, can you say Lesotho has successfully implemented what was expected of it and is ready for the start of the compact? If yes, how so, if not, where are the shortcomings and how can they be addressed?
Blyden: With His Majesty’s assent on March 29, 2024, we applaud the government of Lesotho for passing all necessary legislation required for the compact to enter into force and we proudly announce that the compact officially started implementation on March 30. When compact development began, the government of Lesotho approached MCC to support this work in order to ensure compact investments are available to all Basotho. This accomplishment is no small feat, and we were honored to support the government of Lesotho in enacting this transformative legislation.
Now that the legislative conditions precedent (or requirements) have been met—with the passage of the Counter Domestic Violence Act, Harmonization Act, inheritance reforms, Labor Act, and Occupational Health and Safety Act—the compact can start implementation. As with all partner countries, MCC expects the government to continue to demonstrate its commitment to the principles of democratic governance that underpin MCC’s eligibility criteria throughout the life of the partnership.
LT: How are the funds going to be rolled out?
Blyden: Now that the compact has launched, all compact funds are available for disbursement. MCA-Lesotho II will lead the process of commitment and disbursement of funds, requesting spending authority quarterly from MCC. MCC pays the compact’s contractors and consultants directly, utilizing several systems to ensure compact disbursements meet rigorous review and requirements. This includes oversight mechanisms of Fiscal and Procurement Agents who ensure MCC’s processes are followed.
LT: Which projects under the Compact II will be given priority and why?
Blyden: The compact has four projects, and all are important to achieving the goals and benefits anticipated of the entire program.
-The Health Systems Strengthening Project aims to improve primary healthcare services and standards of care, improve healthcare financial and management systems, and work with the Ministry of Health to modernize health data systems.
-The Market Driven Irrigated Horticulture Project aims to increase rural incomes through investing in climate-smart irrigation infrastructure and attracting commercial farmers to collaborate with local small-holder famers to produce high-value crops and build strong value chains. The project will also support government reforms and capacity to ensure inclusive and sustainable growth of the horticulture sector.
-The Business Environment and Technical Assistance Project plans to increase profits for high-growth potential firms, including enterprises owned by women and youth and firms in rural areas. The project will work across key productive sectors like agriculture, creative industries, manufacturing, and tourism to support the growth of existing and new firms through technical assistance, business development services and linkages to financing opportunities.
-The American Catalyst Facility for Development Project supports blended finance transactions that will catalyze private investment into Lesotho.
LT: Why was it important that Lesotho should have passed the stipulated laws before implementation of the project? Why are they so important that you made them pre-requisites to the beginning of the entire project and what could have been the impact of their absence?
Blyden: This compact is a critical example of addressing structural inclusion, enabling women, youth, micro, small and medium enterprises, and the rural poor to access and benefit from development investments. Inclusive economic growth is a human rights issue and means ensuring that the benefits and impacts of development policy reforms and investment opportunities are fairly distributed across all members of society.
Studies show that economies grow faster, grow for longer, and grow more dynamically when prosperity is more equally distributed among all people. These are all important to support Lesotho’s journey to self-reliance. When growth isn’t inclusive, it threatens everyone’s prosperity. Working with our government of Lesotho partners, MCC supported the bills to also ensure that our compact’s impacts will be experienced inclusively. We extend our heartfelt congratulations to all Basotho.
LT: Lesotho is among countries which are hard hit by climate change impacts and is currently experiencing severe weather conditions including but not limited to severe rains, storms and drought. Has this been considered especially in the horticulture project which the country will embark on with funds from the compact?
Blyden: Yes, absolutely. As you note, climate change is particularly relevant to the Market Driven Irrigated Horticulture Project. The compact will facilitate passage of a Water Bill and Irrigation Bill that will allow Lesotho to create management plans that promote sustainable water use, including within the irrigation schemes.
The project also will dedicate funds to address issues of land degradation in the catchment areas around the schemes selected for development. Finally, we know that climate change has increased food insecurity in Lesotho. MCC hopes that the Market Driven Irrigated Horticulture Project will also be able to address issues of food insecurity by not only increasing the amount of food grown in Lesotho but by providing those impacted with improved farming skills.
