. . . LHWP Agreement is the “3rd largest contributor to the fiscus”
Mohloai Mpesi
LESOTHO receives at least M350 million every month for transferring water to neighbouring South Africa, the Minister of Natural Resources, Mohlomi Moleko, has said.
He was addressing Parliament during Thursday’s question and answer session.
Mr Moleko was responding to a question asked by Basotho Action Party (BAP) Proportional Representative (PR) MP, Manyaneso Taole, who wanted to understand the total socio-economic benefits Lesotho derives from implementing the Lesotho Highlands Water Project (LHWP).
The project transfers an average of 780 million cubic litres of water annually into the Ash River in South Africa, although the actual transfer volumes vary from year to year depending on rainfall patterns, reservoir levels and maintenance activities such as the major tunnel inspection and maintenance works undertaken in 2024.
Ms Taole probed the minister to break down the benefits in figures as the signing of the LHWP Agreement commemorates 39 years.
She also asked the minister to reveal the total number of professionals and artisans, which the Project has hired since its inception, as well as the total number of households that have been relocated and the total amount of compensation disbursed so far.
Mr Moleko revealed that Lesotho receives M350 million monthly from South Africa as per the Agreement between the two countries.
“Since the water deliveries began, Lesotho has earned over M20 billion in cumulative royalties from the Lesotho Highlands Water Project.
“Currently, average royalty’s receipts amount to M350 million per month or approximately M4.2 billion annually. This makes the LHWP the third largest contributor to the national fiscus after tax revenues and SACU receipts.
“All royalties are paid into the government of Lesotho’s consolidated fund, from which they support national development programmes across sectors, including education, health, infrastructure and community development, thereby benefiting all Basotho including those in project affected areas through targeted social programmes implemented by the Lesotho Highlands Development Authority (LHDA),” he said.
Since its inception in 1986, the Lesotho Highlands Water Project (LHWP) has been one of the largest sources of employment and skills transfer in Lesotho, he added.
Mr Moleko said the project has created thousands of jobs for Basotho.
“Under phase IA, the project generated . . . approximately 10, 000 jobs for Basotho, resulting in M400 million paid in wages and M68 million spent on Basotho owned businesses. Additionally, 783 rural Basotho received formal skills training,” he said.
He added, “Under Phase IB, employment amounted to . . . close to 9 000 in total for both short- and long-term jobs.
“The total earnings for Basotho workers exceeded M623 million, while Basotho companies earned over M300 million through contracts and supply of services.”
He added that under Phase II, which is currently underway in Mokhotlong District, a total of 16, 165 jobs have been created.
“Under Phase II, which is currently underway, employment reporting has transitioned to absolute numbers, distinguishing between skills and unskilled workers. To date, 16, 165 job opportunities have been created, of which 12, 035 were skilled and 4, 130 were unskilled.
“Basotho nationals constitute 14, 766 of these positions, reflecting the strong local participation in the project. The young professionals project introduced under Phase II has engaged 92 graduates to date, with 15 percent female participation and over 95 percent Basotho representation, promoting youth inclusion and professional development.
“Skills testing and accreditation done in partnership with the Ministry of Education has trained, tested and accredited over 1, 000 Basotho in unskilled trades,” he said.
“Collectively, these figures illustrate the LHWP’s pivotal role in generating employment, strengthening local capacity and equipping Basotho with technical and managerial competence that continue to benefit the broader economy,” he said.
Mr Moleko explained that a total of 374 households have been resettled under Phase IA, with 321 relocated under Phase IB, while a further 296 have are earmarked for resettlement.
“LHWP has maintained a strong commitment to social responsibility by ensuring that all affected households are properly compensated and resettled prior to any project impacts.
“The authority follows internationally recognised resettlement and compensation frameworks to safeguard the livelihoods of project affected communities. Under Phase IA, a total of 374 households were resettled. Under phase IB, 321 households were relocated to make way for Mohale Dam and associated infrastructure.
“For phase II, the total number of households earmarked for resettlement is 296. As construction progresses, this figure may differ slightly to accommodate new developments identified during detailed design and site works,” he said.
“To date, 21 households have already been resettled, while the remainder will be relocated according to the project resettlement schedule, ensuring that no household is affected before suitable arrangements are made.”
Mr Moleko said M626 million for compensation has been paid, covering both the first and second phases.
“In financial terms, the total compensation paid by the project to date amounts to M628, 543, 960. 44, broken down as follows; phase I, M475, 769, 767.28, and Phase II, M157, 774, 253. 16, covering mostly individual household compensation with communal compensation scheduled to begin in the coming year.
“This demonstrates LHDA’s continued adherence to fair and transparent compensation practices that promote sustainable community restoration.
“The LHWP has been instrumental in transforming Lesotho’s transport infrastructure . . . These developments have had lasting economic and social benefits,” he said.