America warns of threats to second MCC compact

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Bereng Mpaki

THE United States (US) ambassador to Lesotho, Rebecca Gonzales, has warned that Lesotho risks losing out on the multi-million-dollar second compact under the Millennium Challenge Corporation (MCC) due to concerns about “unacceptable” corruption and police brutality against citizens.

Ms Gonzales also warned of a “delay or derailment (of the second compact) if we do not continue purposefully on the path of reforms and political stability”.

She issued the warning during yesterday’s ceremony to mark the signing of a US$5, 78 million (about M82 million) grant to assist Lesotho in the processes towards the development of the second MCC compact. Finance minister Moeketsi Majoro signed on behalf of the government.

The MCC is a multilateral American foreign aid agency established by the United States Congress in 2004, with beneficiary countries expected to meet certain conditions with regards to good governance and respect for the rule of law to qualify.

In 2007, MCC and Lesotho signed the first US$362, 6 million (more than M3 billion) compact to reduce poverty and spur economic growth.

In 2015, the MCC stalled in renewing the compact programme over rampant human rights abuses perpetrated under former Prime Minister Pakalitha Mosisili’s regime.

Lesotho’s eligibility for the second compact was first confirmed by the MCC Board in December 2017 after the ouster of the Mosisili regime in the June 2017 elections and the advent of the Thomas Thabane-led coalition.

However, there have been increasing reports of police brutality against citizens and graft in government in recent times.

The government and the opposition have also been dragging their feet on the multi-sector reforms process. There has been very little progress towards the implementation of the reforms despite a May 2019 Southern African Development Community (SADC) deadline for Lesotho to have fully implemented constitutional and security sector reforms.

And yesterday, Ms Gonzales warned that all these shortcomings on the part of government threatened the granting of the second compact.

“It is vital to understand that we still have a lot of hard work to do before we actually sign a compact between Lesotho and the United States,” the Ms Gonzales said.

“There is still potential for delay or derailment if we do not continue purposefully on the path of reforms and political stability. If we stray from that path, it will be even more difficult to find our way again.

“I am deeply concerned about alarming reports of corruption and police brutality – behavior that is unacceptable and non-negotiable.  The consequences of an interrupted compact development will not be as serious as the negative impact to the people of Lesotho caused by failure to address these critical issues,” she added.

Ms Gonzales said she however, remained hopeful that the obstacles to the second compact would be cleared.

“I look at Lesotho’s progress and remain hopeful. The United States counts on the sustained commitment of the Lesotho government to ensure that the resources we put in place today will develop an MCC compact that will truly reduce poverty and grow the economy for all benefit of all Basotho.  Therefore, today we are taking a positive next step on the journey to a compact by entering the development and facilitation phase.”

She said she has also been impressed by the efforts to maintain the legacy of the first MCC compact, although there were still some significant challenges.

“Lesotho can be proud of its progress toward reaching to epidemic control in the fight against HIV/AIDS, including investments made in MCC’s first compact that strengthened the country’s health care system and its ability to deliver quality services.  We have gotten closer to achieving the 90/90/90 targets, yet Basotho still suffer from HIV/AIDS at alarming rates.   We must remain focused, committed, and determined – with a renewed sense of urgency – in order to save lives.

She added that Lesotho should be proud of developments in the water sector under the first compact. The first compact supported Lesotho’s vision to provide secure, adequate, sustainable and clean water and sanitation services to rural and urban consumers.

“But we cannot rest as hard work remains.  There are still many Basotho who do not fully benefit from this vital resource (water) and vulnerability increases in times of drought.

“The people of Lesotho can be proud of developments in the private sector. The MCC First Compact Private Sector Development Project aimed to stimulate private sector activity within the country by improving access to credit, reducing financial transaction costs, and increasing the participation of women in the economy. The entrepreneurial spirit is alive and well in Lesotho.

“Yet we cannot bask in our progress because critical work remains to be done. The promise of economic development still eludes so many Basotho who dream of a day when the vicious threat of poverty is not staring them in the face.  We can and must confront these challenges together to achieve our common objective of a healthy, prosperous, and peaceful Lesotho.

“The true prosperity of a country is not determined solely by gross domestic product (GDP).  True prosperity is also determined by good governance, respect for human rights, rule of law, a security sector including the police dedicated to protecting citizens, a vibrant media, constructive political discourse, equal access to opportunity, a military under civilian rule, a healthy environment, a fearless judiciary, a professional civil service.

“Accountability is a necessary condition for all of these ideals.  Strengthening institutions of accountability is necessary for progress on a second MCC compact.  The watchdogs of public interest must be empowered and able to take action.

“When those pieces are in place, then the United States can be confident our investments will reach into every corner of this beautiful country to help all Basotho. As part of compact development, we look forward to working with our Basotho partners to identify concrete steps to strengthen institutions of accountability around public goods delivery.

“Simultaneously, we call upon the people of Lesotho themselves to demonstrate their commitment to fostering a culture of accountability,” Ms Gonzales added.

On his part, Dr Majoro said the second MCC compact was necessary for job creation to address the “serious challenge of the unemployment crisis”.

“I recently travelled around the country and I learned from people the seriousness of the challenge of unemployment. We urgently need to address this issue which is also affecting economic growth. So, we have agreed with the United States to focus on job creation in the second compact.

“The second compact aims to reduce poverty in Lesotho through improved planning and delivery of public goods and services and to create the environment for inclusive, equitable and sustainable private sector-led growth targeting the productive sectors of commercial agriculture, manufacturing, tourism, culture and creative industries and health.”

Dr Majoro added that the current phase of the compact development process is expected to be completed in April, with the final phase expected to be completed in June 2020.

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