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Threat to Lesotho’s MCC eligibility

by Lesotho Times
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Herbert Moyo

THE outgoing United States Ambassador to Lesotho, Mathew Harrington, says the lack of a long-term maintenance plan to ensure the sustainability of investments that were made under the first compact Millennium Challenge Corporation (MCC) could be a stumbling block to the country’s hopes of securing a second compact.

Mr Harrington, whose three year tenure in Lesotho ends this month, said this in an interview with the Lesotho Times in Maseru this week.

The MCC Board is set to meet in Washington in the US to review Lesotho’s eligibility for the second MCC compact.

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

In 2007, the MCC and Lesotho signed the first US$362.6 million (over M3 billion) compact to reduce poverty and spur economic growth.

The five-year compact helped to expand water supply for household and industrial use, strengthened the country’s health care system and removed barriers to foreign and local private sector investment.

Lesotho was supposed to receive its second compact last year year, but on 16 December 2015, the MCC Board decided not to vote on the issue citing governance concerns, particularly after the killing of the former army commander, Maaparankoe Mahao.

The US government insisted that Lesotho would only continue to benefit from the African Growth and Opportunity Act (AGOA) and to receive a second MCC compact after taking “concrete actions” that address concerns about “impunity and the rule of law” as well as implementing recommendations made by the SADC Commission of Inquiry.

AGOA accords duty-free treatment to products exported by beneficiary sub-Saharan countries to the United States including Lesotho.

Mr Harrington this week told this publication that a determination on Lesotho’s MCC eligibility is expected to be made in December.

He said that while there would be a review of the progress towards the restoration of political stability, security and good governance, the MCC board was likely to consider whether or not Lesotho had a long-term maintenance plan to ensure that gains from the first compact including water and health investments were not lost.

“AGOA and MCC eligibility is tied to economic freedom and issues to do with the rule of law and human rights so the range of those issues will be considered and the decision will be made in December,” Mr Harrington said.

The issues they (MCC Board) will look will also include questions around the sustainability of the first compact and that is a real concern frankly.

“There were positives from the first compact where there was a US$362 million investment but the challenge that we are seeing now is that of sustainability.

“The sustainability of the first compact investments will be considered by the board in December and there was no long-term maintenance plan in place so that’s a big deal.”

He said it would be “hard” to make the case to the MCC board that the government of Lesotho should get a second compact if the investments under the first compact were not sustained.

“A lack of a long-term maintenance plan will be a big disadvantage to the government of Lesotho when the board meets in December.

“There is no long-term maintenance plan in place and it will be hard to advocate that the government should get more money under MCC. So my great hope is that that issue is resolved by December.”

He however, lauded the government for the steps it had taken towards addressing governance and rule of law concerns.

“I think the steps that government is taking to ensure accountability within the security sector will send a good message and a strong signal and those steps will certainly be taken into account,” he said.

The government has moved to implement the recommendations of the Southern Africa Development Community which include among other things, security sector reform and the prosecution of those suspected of killings and other human rights violations.

Some members of the army have been arrested and are currently on trial in connection with incidents that led to political instability from 2014 including the killing of a police officer during the 2014 army raid on key police stations.

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