MDC nods Lesotho for further assistance

  • 10 January, 2019

By Tmglive

In what the finance ministry considers a major boost not only to government, but the teams on both sides that have worked assiduously to conclude the second compact, Lesotho has been reselected for continued compact development.

At its quarterly meeting, the U.S. Government’s Millennium Challenge Corporation (MCC) Board of Directors met to select countries eligible for MCC assistance, which is designed to spur economic growth and reduce poverty.

The Millennium Challenge Corporation is an independent U.S. Government agency working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants and assistance to poor countries that meet rigorous standards for good governance, from fighting corruption to respecting democratic rights.

According to the letter written to Prime Minister Motsoahae Thabae dated December 31, 2018 by MCC Chief Operating Officer and Head of Agency Jonathan Nash, following its quarterly meeting on December 11, 2018, the U.S. Government’s Millennium Challenge Corporation (MCC) Board of Directors reselected Lesotho to continue developing MCC second compact which is designed to spur economic growth and reduce poverty.

“This is a testament to the strong partnership that MCC and Lesotho have built and to the sustained progress Lesotho has made in strengthening democratic institutions, maintaining sound economic policies, and investing in its people,” said Nash.
He said the decision also reflects the Board's acknowledgement of the government of Lesotho's initial steps to implement the recommendations of the Southern African Development Community's (SADC) Commission of Inquiry and to demonstrate its commitment to the rule of law and accountability adding that the board will continue to monitor these actions carefully over the coming year.

According to the Press Secretary at the Prime Minister's Office Thabo Thakalekoala “this is not the first compact which Lesotho develops. In the first compact Lesotho benefited immensely through construction of health centres across the country, water and sanitation where most households, especially in rural areas were built toilets and have access to clean drinking water.”
Thakalekoala added that development planning and health ministers together with MCC are yet to meet in order to deliberate on which sectors they are going to focus on in the second compact as well as determining the start and ending of the compact.

The objective of the development of the second compact with funding from MCC is to unlock equitable and sustainable economic growth in partnership with the private sector by loosening key constraints. The initial analyses identified four areas of potential investment being health, job skills, land and the regulatory environment.

According to the finance ministry, the estimate is that signature of the compact will take place early in second half of 2019 and implementation by May 2020.

Nash stated that due to increased competition for MCC funding, the corporation places great importance on country ownership, sound economic rationale and a demonstrated commitment to timely and quality compact development saying they are looking forward to the government's continued engagement in compact development during the crucial stages of the project design and its commitment to an environment conducive to the long-term sustainability of the compact.
He said MCC also continued to expect the government of Lesotho to provide evidence of sustainability of the first compact's results saying in this respect MCC expects the government of Lesotho to continue its support for maintenance of the health clinics, water infrastructure and other investments made in the first compact.
He explained: “Eligibility does not guarantee access to MCC funding. It is an important step in MCC's compact development process. Successful development of a compact coupled with continued strong policy performance on MCC''s scorecard which includes demonstrating commitment to the rule of law and accountability is essential for board's approval of a compact.”
Lesotho developed the first compact in 2008 to 2013 and it benefited 1,041,422 people where it focused on three sectors water, health and private sector development with the aim of stimulating economic growth and building critical infrastructure needed to combat the HIV/AIDS epidemic in coordination with MCC partner.

According to MCC analysis, Lesotho, despite being part of the rapidly growing Southern African Development Community (SADC), the country historically has been unable to unlock the potential of its two greatest resources - its water and its people. Economic growth has remained sluggish for more than 20 years. MCC signed a $362.5 million compact with the Government of Lesotho designed to increase economic growth and reduce poverty in July 2007.

The compact funded work with other international donors on one of the largest infrastructure improvement projects in Lesotho’s history, the Metolong Dam, as well as work with PEPFAR (the President’s Emergency Plan for AIDS Relief) to mitigate the negative economic impacts of poor maternal health, HIV/AIDS, tuberculosis and other diseases.

Development needs were jointly identified by the government and MCC as a result of broad collaboration with key stakeholders, including the private sector, non-governmental organizations and civil society. The Lesotho Compact funded projects in three areas: water sector; health sector; and private sector development.

The MCC compact integrated conclusions from Lesotho’s poverty reduction plan, the result of a three-year consultative process led by the government involving 20,000 people in 200 villages across the country.

By the end of the compact in September 2013, the government and MCC had spent nearly 99 percent of anticipated compact funds to improve water supply, increase access to essential health services, and remove barriers to private sector investment. Approximately 1 million people are expected to benefit from the investments.

When giving the description of the project, the MCC says the crisis in human health resources is a major issue in Lesotho, as in the rest of southern Africa.

“This has the potential to severely hamper the country’s efforts to reduce poverty and promote economic growth. The country faces difficulties retaining nurses and clinicians due to poor working conditions and greater career opportunities offered outside the country. Lesotho has one of the highest HIV/AIDS prevalence rates in the world - more than one of every five adults in Lesotho is HIV-positive, according to United Nations figures.

“Because only half of Basotho women give birth at medical facilities, there is also no way to ensure that they are taking appropriate precautions to avoid spreading HIV, leading to infection in many new-borns,” stresses MCC.

MCC was created in 2004 as a new and different model of development assistance – one focused on reducing poverty through economic growth. Built on the lessons of decades of development experience, MCC provides time-limited grants to developing countries that meet rigorous standards for good governance, from fighting corruption to respecting democratic rights, as evaluated on MCC’s scorecard.

The country scorecards consolidate an individual country’s scores for each of the policy indicators MCC uses to determine eligibility for its assistance programmes. By using information collected from independent, third-party sources, MCC allows for an objective comparison of all candidate countries.

MCC takes a business-like approach, with bedrock commitments to data, accountability, and evidence-based decisions. MCC’s investments are improving the lives of millions of people around the world.

Arnold Schwarzenegger

“Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength.” – Arnold Schwarzenegger