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Scramble to meet deadline for M6.14 billion aid package 

by Lesotho Times
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THE government has until end of this month to pass three laws central to unlocking the $322.5 million (about M6.14 billion) aid package from the United States under the Millennium Challenge Compact (MCC) II. 

Lesotho risks losing the humungous amount required for much needed interventions in health and horticulture to boost the economy if it fails to fulfil the qualifying criteria for the aid package.   

The three pieces of legislation in question are the Counter Domestic Violence Act 2022, the Harmonization of the Rights of Customary Widows with Legal Capacity of Married Person Act 2022 and Occupational Health and Safety Act 2022. They must be passed first before implementation of the Compact via the Millennium Challenge Account (MCA) Lesotho II. 

The Lesotho Times (LT)’spolitical reporter, Mohloai Mpesi, caught up with MCC Vice President, Cameron Alford, during his short visit to Maseru last week to understand Lesotho’s chances of getting the important funding. Excerpts:   

LT:  Take us through the purpose of your visit? Also, how often does the MCC visit Lesotho? 

Alford: This is my second trip to Lesotho, which is a follow up visit to assess progress on our program (MCC). We have the Health and Horticulture Compact program which we are looking to put into force by the end of this month. So, there are two purposes under the umbrella of assessing the progress. 

Firstly, we talked directly with the government to urge passage of the three laws which are the requirements for the launch of the program. Secondly, to talk directly with the MCA Lesotho II which is the entity responsible for implementing the program. 

We engaged them to understand the progress they are making because we have five years to implement our program. So it is critical that we do as much work as we can for us to mitigate any risks ahead of us and launch a successful program. 

LT: Based on past experiences, is the US government happy with the manner in which the Lesotho government has utilised MCC funds? 

Alford: This is MCC’s 20th birthday, and our relationship with Lesotho goes back to almost the beginning of the MCC tenure. I have to say we are very proud of the partnership that we have had with Lesotho and the government throughout the tenure. 

It is a relationship and partnership based on mutual respect, accountability, openness in communication and collaboration and that has been exemplified to date in this program. 

LT: You oversee all the compacts which are MCC’s signature grant investment vehicles to reduce poverty through economic growth. You also provide counsel to the board of directors and senior management of MCC on legal and policy matters. 

How does the US government ensure that the funds are used solely for the intended MCC projects? 

Alford: I take my job as a steward of the US taxpayers funds very seriously and MCC has a number of systems in place to ensure that those taxpayers’ dollars are used in a manner in which they are intended. 

Firstly, it is about starting with a great team which we believe we have in the MCA. Secondly, we have fiscal agents, procurement agents that are responsible for ensuring that MCC’s policies are followed. 

Disbursements are done on a quarterly basis and only after the MCA submits a number of reports that demonstrate accountability of how previous funds were spent. It is only when MCC is satisfied that the next batch would be disbursed. 

Lastly, we disburse directly to contractors and consultants, so disbursements to the MCA are only for administration funds of the MCA itself.      

LT: Lesotho has been experiencing political problems which have seen security institutions interfering in politics, among other things. As a result, there have been delays in passing the required qualifying laws. Will that have any impact on the implementation of the MCC Compact II? 

Alford: MCC only works with certain partner countries and our selection criteria are such that only countries that demonstrate a commitment to ruling justly, economic freedom and investing in their people, are eligible. 

It is Lesotho’s adherence to those things that makes it eligible in the first place, which is why our board selected Lesotho and we have chosen to move forward. 

At the same time, our board demands that our partner countries adhere to those criteria throughout the life of our program and in particular I think some of the things you referenced on… such as the political debacles. Lesotho needs to ensure there is adherence to the rule of law and protecting fundamental freedoms including freedom of speech and political association. 

If a country fails to meet the criteria, there could be consequences for the program. We are all mindful of that and our partners including Lesotho are mindful of that. 

LT: Which laws are a requirement for the implementation of the Compact and what is your take on the country’s progress in passing those laws? 

Alford: When we signed our program back in 2022, there were a number of conditions that the government had to meet including passage of laws. The government passed some of those back in 2022, even this past December they passed the law establishing the MCA to get that up and running. 

Currently three laws are yet to be passedbefore launching the program. They relate to inheritance reforms to ensure that all people can inherit property equally and others relating to domestic violence and occupational health and safety. 

I should say, these aren’t just conditions for their own sake, they are about establishing the foundation for the success of the program and being able to deliver positive impact for the benefit of all Basotho. 

I have had a meeting with the government heads and had a very constructive conversation yesterday with the Prime Minister (Sam Matekane), Deputy Prime Minister (Nthomeng Majara) and the Finance Minister (Retṧelisitsoe Matlanyane) who share the urgency of passing the laws and meeting the March 31st (2024) deadline. 

They have laid out a very detailed plan on how they will ensure passage of those laws and meeting the deadline. I think we all recognise that missing that deadline introduces significant programmatic, financial and reputational risks to the program and because of that, we are collectively focused on meeting the deadline.      

LT: What advice would you give to Lesotho to ensure that it does not jeopardise the implementation of the compact? 

Alford: Sure, I have referenced our selection criteria has been a key part of MCC and MCA model. Partnership is another one, but there is also country ownership. Which means Lesotho is in the driver’s seat in this instance. They own the program therefore have to ensure its implementation. 

Of course, we are partners, and we work closely with them. My advice would be to continue the active engagement and coordination both at the government level but also with the MCA. Part of that is to deal with problems or issues that may arise quickly and efficiently. But also, to get ahead of problems before they arise.  That will help to ensure a smooth compact implementation. We are on a tight five-year timeline, we can’t extend that, so being able to efficiently and quickly deal with those issues as they arise will be key in order to have the full success and benefits of the program that we have collectively designed. 

LT: When is the implementation of the Compact in light of the fact that the Lesotho government has not yet completed the reforms process? Will we see any extension of the deadline to give the government time to pass the required laws? 

Alford: We all recognise there are risks associated with missing the March 31st deadline, and those risks compound frankly with each passing day. So right now MCC and the government are focused on doing everything that we can to meet that March 31st deadline. 

LT:  Are there any other remaining conditions for Lesotho to be able to get the funds under the Compact and what will be the consequences if it fails to meet those conditions? 

Alford: At the moment the remaining conditions to entry into force by the kick-off of our implementation period are the passage of the three laws: inheritance reform, labour and occupational health and safety. MCC and the government recognise the imperative around doing that to prevent any of the risks that will arise from a delay. So, I think collectively we are focused on March 31st. 

LT: You maybe aware that the current parliament has had problems in passing legislation since its induction in 2022. This includes the laws that you said are a requirement to obtain the MCC Compact. What do you make of the behaviour of the members of parliament and the government in as far as getting the Compact is concerned? 

Alford: The parliament has been successful in passing a number of laws that have been conditions for the Compact to enter into force. I currently take encouragement and comfort from the open direct conversations I had with the Prime Minister and the Deputy Prime Minister over their commitment to doing everything they can to legislate so as to meet the deadline. 

Legislating is hard, it’s not easy passing laws. If you look at the US Congress, it has a difficult time passing laws from time to time. I recognise that, but again, I think it is their commitment and broad support for the reforms in recognising that this isn’t just about one government but a program for all Basotho. We collectively share that commitment.      

 

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