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Millennium Challenge Corporation Compact II Development Approaches Final Stages in Lesotho
October 14, 2021



Maseru, Lesotho, October 14, 2021: The Government of Lesotho, through the Lesotho Millennium Development Agency (LMDA), is currently developing its second compact with the support of the Millennium Challenge Corporation (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.

In continuing the Compact II development dialogue, the MCC is conducting a hybrid, in-country, and virtual mission to finalize decisions on the proposed compact project design and to secure the government’s commitment before submitting the Investment Memo for technical review.  MCC Lesotho Country Team Lead Karen Fadely Craig is leading the in-country mission and is accompanied by Administrative Officer Emily Ruhm.  The MCC team is in Lesotho for two weeks to meet with government officials and all relevant stakeholders to further discuss the objectives, scope, costs, possible collaborations, benefits, and risks associated with each proposed project.

Among the highlights of the MCC mission trip was the stakeholder engagement workshop held on October 7, where the findings of the Irrigated Horticulture feasibility study were presented and discussed by key stakeholders.  During the discussions, Mrs. Fadely Craig noted that although the second phase of the feasibility study is yet to be conducted, the first phase results confirm the technical potential to embark into viable commercial irrigated horticulture.  Speaking at the same event, LMDA CEO Mr. Keketso Chalatse emphasized the importance of meaningful participation by all stakeholders in developing this second compact to ensure maximum benefits to Lesotho’s economy.  The enthusiasm observed from all stakeholders during the workshop gives confidence that the proposed compact is truly what the Basotho nation aspires to achieve.

This week, the MCC and LMDA teams have engaged with various Ministers to review possible interventions, discuss government commitments, and decide on the final project design. The discussions have centered around the following:

  • The Market-Driven Irrigated Horticulture (MDIH) project proposes up to 2,000 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 program.  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.
  • The Business Environment and Technical Assistance (BETA) project is proposed 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.
  • The Health System Strengthening (HSS) project is proposed to increase the efficiency and efficacy of health resource utilization 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 labor productivity, complementing the first project.  Improved private sector productivity will contribute directly to a growing economy.

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 complete process is outlined in the diagram below and includes the timeline depicting Lesotho’s reselection through the commencement of Compact II implementation.

MCC’s mission was supported by the United States Embassy in Lesotho in collaboration with the LMDA.  MCC’s last mission was conducted in February 2020.

For more information, please contact LMDA’s Office of the Public Outreach & Stakeholder Engagement:

Palesa Motleleng

Email: motlelengp@lmda.org.ls

Telephone: +266 2231 7017

Cellphone: +266 5886 7600

Matselane Mosoaboli

Email: mosoabolim@lmda.org.ls

Telephone: +266 2231 7017

Cellphone: +266 594106858