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Momentous occasion as Lesotho, US sign US$300 million Compact II

by Lesotho Times
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Staff Reporters

THE big day has finally arrived.

Today all roads lead to ‘Manthabiseng Convention Centre for the official signing ceremony of a US$300 million (about M4, 8 billion) grant to Lesotho from the United States (US)’ Millennium Challenge Corporation (MCC).

In a statement, the US embassy in Lesotho this week said MCC CEO Alice Albright will sign on behalf of the corporation while Foreign Affairs and International Relations Minister ‘Matšepo Ramakoae will sign on behalf of Lesotho.

“They (Albright and Ramakoae) will be joined by The Right Honourable the Prime Minister Moeketsi Majoro, US Ambassador to Lesotho Maria Brewer, and more than 200 government, community and private-sector leaders from across the country,” the embassy said.

After the signing, the next step the disbursement of funds this year. In terms of the two parties’ timeline, implementation of the agreed Compact II socio-economic projects will begin next year until 2028.

The compact has three proposed projects — Market-Driven Irrigated Horticulture (MDIH), Business Environment and Technical Assistance (BETA), and the Health System Strengthening (HSS) project, and each project has several components.

In a detailed explanation, the US embassy said the compact entailed the following:

  • “A market-driven irrigated horticulture project which proposes up to 2000 hectares of irrigation at several sites to drive growth in the irrigated horticulture sector. The project has a strong focus on empowering communities, landholders and farmers to demonstrate the success this sector can have in Lesotho.  The project will focus on ensuring women and youth participate in the programme.  Institutional reforms and capacity strengthening in land, water, agriculture, and gender will help ensure that Lesotho can sustain the project’s success and replicate in other areas.
  • “A business environment and technical assistance project to strengthen the business ecosystem to address system-wide or horticulture sector-specific challenges such as horticulture standards and quality conformity, access to finance for horticulture subject matter experts (SMEs), and the promotion of women and youth-owned SMEs.
  • “A health system strengthening project to increase the efficiency and efficacy of health resource utilisation resulting in a reduction in per unit treatment cost, improved health outcomes, and ultimately improved cost-efficiency of the Ministry of Health’s expenditures. In addition, the project will reduce household medical and associated expenses and increase labour productivity, complementing the first project.  Improved private sector productivity will contribute directly to a growing economy.”

The Compact II signing is a huge relief to Lesotho which has endured a five-year wait for a definite funding agreement.

Lesotho got the first compact grant worth US$362, 6 million (about M3 billion) back in 2007. It was used to fund various projects to reduce poverty and spur economic growth.

However, in 2015, the MCC refused to renew the compact programme over rampant human rights abuses under then Prime Minister Pakalitha Mosisili’s regime.

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

Lesotho’s eligibility for the second compact was initially confirmed by the MCC Board in December 2017 after the ouster of the Mosisili coalition in the June 2017 elections and the advent of former Prime Minister Thomas Thabane’s second coalition government.

However, the Thabane administration, which lasted until May 2020 when it was replaced by the current Majoro-led coalition, was accused of failing to tackle police brutality against citizens and corruption.

The former government also dragged its feet on the multi-sector reforms process. It even missed the May 2019 deadline set by SADC for the full implementation of the constitutional and security sector reforms. All of these issues were part of the eligibility criteria for the second MCC compact.

More importantly, the Thabane government was accused of ignoring repeated warnings to address human trafficking concerns.

The US government defines human trafficking as “modern-day slavery” which involves the movement of persons locally and beyond a country’s borders against their will to get them into forced labour, involuntary servitude and debt bondage.

Due to the Thabane administration’s failure to address human trafficking concerns, Lesotho was in 2020 placed in Tier 3—the lowest tier in the US State Department’s Trafficking in Persons (TIP) Report.

This meant that Lesotho could not qualify for various forms of US development assistance.

To its credit, the Majoro administration, which took over the reins in May 2020, worked resolutely to get Lesotho off Tier 3.

Under the capable stewardship of Home Affairs Minister Motlalentoa Letsosa, the government began implementing the US Trafficking in Persons Report’s recommendations for “increased efforts to investigate, prosecute and convict traffickers through independent and fair trials including officials complicit in trafficking in persons”.

To that end, Mr Letsosa said cabinet had directed the police to establish regional focal points for the coordination of anti-trafficking activities “while the long-term strategic objective is to establish fully fledged anti-trafficking units, with sufficient resources at district level”.

He also said that eight cases were referred to the Director of Public Prosecutions (DPP), Hlalefang Motinyane, for prosecution in 2021.

“Further, the Ministry of Labour and Employment; the Home Affairs’ Department of Immigration and the police’s Anti-Trafficking Unit have an operational joint task force for the inspection of the regularity of foreign workers and employers to ensure compliance with the law and to detect potential cases of trafficking. As a result of this effort, there are cases being detected and investigations are ongoing and this will determine whether or not government officials are involved,” Mr Letsosa said in November 2021.

None of the eight unnamed suspects have been prosecuted to date despite their cases being referred to the DPP for trial. Nevertheless, the Lesotho government’s efforts thus far have been enough to convince the US of its seriousness in tackling the trafficking scourge hence the compact funding agreement.

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