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Lesotho reselected for MCC funding

…second compact agreement expected early 2022,

…deal dependent on Lesotho meeting eligibility criteria.

Bereng Mpaki

LESOTHO has been reselected to continue developing a lucrative multi-million dollar compact under the United States government’s Millennium Challenge Corporation (MCC).

It was reselected along other countries like Malawi, Mozambique, Sierra Leone, Indonesia and Timor-Leste.

According to a weekend statement by the US embassy in Lesotho, the MCC board could approve the compact early next year and a definitive funding agreement will then be signed later in the year.

Implementation of the agreed projects will then begin in 2023 up to 2028.

All of this is however, dependent on the Lesotho government meeting eligibility criteria, particularly addressing human trafficking concerns that have been raised by the US government.

In a weekend statement, the US embassy said, “the government of Lesotho, through the Lesotho Millennium Development Agency (LMDA), is currently developing its second compact with the support of the MCC.

“The Lesotho compact development is an ongoing process that includes continuous dialogue between LMDA, MCC, and stakeholders to tap into different views and opinions, perspectives, and expertise to strengthen project outcomes.  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,” the embassy said.

Its statement is titled: “Millennium Challenge Corporation Compact II Development Approaches Final Stages in Lesotho”.

This gives hope that Lesotho, which was first given the nod to begin the compact development in December 2017, could finally be able to conclude the development process and sign a definitive funding agreement which would run into millions of dollars.

The statement notes that the “compact development process has been a long but worthwhile journey that started in 2018 after the Kingdom of Lesotho’s reselection in 2017”.

“The LMDA and MCC are currently working on feasibility studies to ascertain the proposed projects’ implementation and viability as well as draft the investment recommendations for Lesotho’s second Compact. The MCC and LMDA discussions have centred around 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 MCC hopes to approve the compact early next year and that a funding agreement will also be signed next year. Should this happen, the implementation of the compact will then begin in 2023 and be completed in 2028, the embassy statement says.

All this hinges on Lesotho meeting eligibility criteria, particularly addressing human trafficking concerns that have been raised by the US government.

The US government considers human trafficking a serious offence and countries like Lesotho, which are on its Tier 2 Watchlist for trafficking, are ineligible to receive various forms of US development assistance.

Compliance with the US government’s recommendations to deal decisively with the human trafficking is part of the eligibility criteria for Lesotho to sign a multi-million-dollar second compact.

Last month, US Ambassador, Rebecca Gonzales, acknowledged that the Lesotho government had made some “significant” steps over the past year including the passing the Anti-Trafficking (Amendment) Act last November to combat human trafficking by imposing lengthy and even life imprisonment on those convicted of the crime.

She however, said the government needs to do more including expediting investigations against government officials and others suspected of involvement in the trafficking of persons.

“As the US Ambassador to Lesotho, I will continue to reiterate that combating human trafficking is a top priority for the United States government,” Ms Gonzales said.

“My team and I want to support the government of Lesotho to make rapid progress towards achieving the recommendations in the 2021 TIP (Trafficking in Persons) Report to avoid any assistance restrictions. Time is of the essence.

“We want to see Lesotho’s meaningful anti-TIP progress that would warrant an upgrade to Tier 2 by the end of February 2022 because this means that we will have supported the protection of crucial foreign assistance and the country’s proposed second Millennium Challenge Corporation compact,” Ms Gonzales added.

On his part, Home Affairs Minister Motlalentoa Letsosa, said the government was working flat out to implement the TIP Report’s recommendation for “increased efforts to investigate, prosecute and convict traffickers through independent and fair trials including officials complicit in trafficking in persons”.

To that end, he said eight cases had already been referred to the Director of Public Prosecutions (DPP), Hlalefang Motinyane, for prosecution.

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