. . . govt says lucrative grant will “advance economic growth and poverty reduction”.
Staff Reporters
THE official signing ceremony for the US$300 million (about M4,8 billion) grant to Lesotho from the United States (US)’ Millennium Challenge Corporation (MCC) will be held next month.
Prime Minister Moeketsi Majoro’s spokesman, Buta Moseme, did however not give the exact date for the signing, saying this would be communicated in due course. Nor did he say whether the signing would take place in Lesotho or the US.
“The signing of this compact is scheduled for May 2022 with an exact date to be communicated at a later stage,” Mr Moseme said in a statement.
His statement was in response to the weekend announcement by the MCC that its board of directors met on 31 March 2022 and voted to approve the lucrative US$300 million grant to enable Lesotho to fund various socio-economic projects under a second compact (Compact II) programme.
The lucrative grant is now in the bag following the MCC board’s approval. All that remains is for the official signing ceremony before disbursement of the funds can commence this year. In terms of the two parties’ timeline, implementation of the agreed Compact II projects will begin next year until 2028.
In a weekend statement, the MCC said the board held its quarterly meeting in the US capital, Washington DC, where they approved the US$300 million grant to Lesotho. The board also approved a US$60 million grant for Kenya.
The grants to Lesotho and Kenya will “drive sustainable, inclusive economic growth” in the two African countries, the MCC said in its statement.
“The MCC’s proposed compact with the Government of Lesotho seeks to improve health outcomes through better primary healthcare delivery, increase incomes in rural communities through the provision of irrigated land for high-value crops, and boost profits and formal employment for women- and youth-owned enterprises.
“The proposed threshold program with the Government of Kenya aims to bolster the Nairobi transport authority, connect Nairobi residents to public transportation, counter pervasive sexual harassment on minibuses, modernise land use planning, and catalyse financing for bus rapid transit to promote lower greenhouse gas emissions,” the MCC said.
MCC CEO Alice Albright added, “through these partnerships, MCC will help the Kenyan and Lesotho governments tackle tough policy and institutional reforms and invest in critical infrastructure in the health, agriculture, finance, and urban planning sectors, creating pathways to prosperity for more than 2, 5 million people”.
United States Ambassador to Lesotho, Maria Brewer, welcomed the MCC board decision to approve the US$300 million grant.
“The approval of this compact is a critically important step in Lesotho’s continued achievement of its development goals for the citizens of Lesotho. The approval of this second compact between the MCC and Lesotho demonstrates the United States government’s commitment to remain a strong and enduring partner with Lesotho.
“The compact will address three development objectives. The first will focus on health systems strengthening to improve efficiency and delivery of primary health care services in Lesotho.
“Through a market-driven irrigated horticulture project, the compact’s second initiative will seek to increase rural incomes by an investment of up to 2000 hectares in climate-smart irrigation infrastructure, human capital development, increased women and youth participation in horticulture, and support for key reforms.
“The third initiative — the business environment and technical assistance project — will aim to improve the business climate in Lesotho with a focus on empowering local business service providers, public-private dialogue facilitation, and inclusive financial services,” Ms Brewer said.
Reacting to the MCC board announcement this week, Mr Moseme said, Compact II “will advance economic growth and poverty reduction by addressing the root causes of the constraint of ineffective policy planning, coordination, and execution across three key sectors: health, agriculture, and access to finance.
“The Compact aims to spur private sector growth by increasing workforce productivity through improved health outcomes, investing in the emerging horticulture sector, and supporting the creation and viability of private businesses through provision of technical assistance, incubation and acceleration services and access to finance. The Compact investments are also designed to target structurally disadvantaged populations, particularly the poor, women, and youth.
“The Government of Lesotho and MCC expect that a stronger, more robust, and organized private sector constituency will be able to demand more effective and efficient goods and services from government. In turn, a more effective and efficient government can provide the public with the goods and services necessary to stimulate and sustain private-sector led, poverty-reducing growth and job creation.
“To this effect, the Government of Lesotho is pleased to partner with MCC under this Compact Program and support building the country’s institutional capacity through select reforms to strengthen the efficiency and effectiveness of the government to provide public goods and business services in the health, irrigated horticulture and financial sector,” Mr Moseme said.
The approval of the grant comes just over a month after MCC officials reached an agreement with the Lesotho government over the US$300 million second compact facility.
The Compact II agreement will certainly bring 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.
Lesotho’s eligibility for the second compact was initially confirmed by the MCC Board in December 2017 after the ouster of Mr Mosisili in the June 2017 elections and the advent of the second Thomas Thabane-led coalition.
Through the assistance of the Lesotho Millennium Development Agency (LMDA), Lesotho has been involved in the process of developing its second compact with the support of the MCC since 2018.
