Compact II set to generate 90 000 jobs



MASERU – The Millennium Challenge Corporation (MCC)’s Compact II is poised to generate over 90,000 job opportunities, providing a beacon of hope for Lesotho’s struggling economy. The Minister of Finance and Development Planning, Dr. Retšelisitsoe Matlanyane highlighted the potential of Compact II to rejuvenate the country’s ailing economy during recent celebrations jointly hosted by the governments of Lesotho and the United States in Thaba-Bosiu.

Compact II, a project initiated by the United States, aims to catalyse economic growth, foster social development, and alleviate poverty in Lesotho. Through a US$322.5 million (equivalent to M6 billion) health and horticulture compact grant, Lesotho stands to benefit significantly.

These funds, integral to the USA Assistance Strategy for Lesotho, will be channelled towards enhancing the quality of life for Basotho citizens, fortifying the business landscape, and fostering economic diversification to spur inclusive growth and job creation. Over the course of its five-year implementation period, Compact II is projected to generate more than 90,000 direct and indirect jobs, offering a tangible solution to unemployment woes.

Building upon the successes of its predecessor, Compact I, which attracted $362 million in investment between 2008 and 2013, Compact II aims to build on achievements such as improved water supply, expanded access to essential healthcare services, and the removal of barriers impeding private sector investment.

The current Compact, valued at over M6 billion, targets three critical areas: the Health Systems Strengthening (HSS) Project, the Market-Driven Irrigated Horticulture (MDIH) Project, and the Business Environment and Technical Assistance (BETA) Project. Under the Health Systems Strengthening (HSS) Project, the aim is to enhance the delivery of health services and the management of primary healthcare in Lesotho.

An investment of approximately M1.4 billion will be allocated to bolster health services, including gender-based violence (GBV) services and responses, as well as improve the capacity, confidentiality, analysis, and usability of Lesotho’s healthcare management units. The Market-Driven Irrigated Horticulture (MDIH) Project, with M2.2 billion in investments, seeks to revitalise the sector by promoting commercial agriculture, particularly benefiting women, youth, and the rural poor.

It also aims to establish a sustainable and inclusive model for irrigation, water resources, and land management. Extensive technical assistance and investments will be provided for institutional reforms and capacity building, with plans to irrigate about 1,500 hectares of land for orchards and farms.

Meanwhile, the Business Environment and Technical Assistance (BETA) Project primarily targets youth, women, and businesses in rural areas. With an investment of M1.1 billion, the project aims to boost the profitability and formal employment of emerging businesses, including micro, small, and medium enterprises (MSMEs). Grants will also be disbursed to support entrepreneurial opportunities for women and youth, contributing to sectoral improvements.

These investments are geared towards enhancing infrastructure, systems, and frameworks, as well as fostering improved policies. According to Dr. Matlanyane, the compact reflects a commitment to harnessing the economic potential of Basotho, spanning families, women, youth, and future generations. Each project is intricately designed to advance the shared objective of poverty reduction through sustainable economic growth.

“There is a deliberate focus on gender equality and inclusion to ensure that marginalised groups have equal opportunities,” the minister stated. At the event, Chidi Blyden, the Chief Executive Officer (CEO) of MCC, extended her congratulations to Lesotho for reaching the significant milestone of securing Compact II.

She underscored the longstanding partnership between MCC and the government of Lesotho, emphasising their collaborative efforts to advance development, with a specific emphasis on empowering women and youth. Blyden also outlined plans to invest in irrigation and agricultural production in Lesotho, aiming to bolster climate resilience, particularly for local farmers.

“In the end, each of these investments will tackle unique challenges to foster greater prosperity for the people of Lesotho,” she said. The implementation of MCC Compact II aligns with the passing of three bills by Parliament: the Administration of Estates and Inheritance Bill 2024, the Occupational Safety and Health Bill 2024, and the Labour Bill 2024. Despite facing rejection by the Senate, the Administration of Estates and Inheritance Bill 2024 was approved by the National Assembly.

The Upper House voiced concerns regarding the lack of consultations prior to the formulation of this legislation and the potential revocation of Basotho customary laws administered through the Laws of Lerotholi.

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