United States Department of State (Washington, DC)
Kathryn McConnell
1 August 2007
Washington, DC — Lesotho's economic growth prospects have become brighter with the recent Millennium Challenge Corporation (MCC) decision to help the small southern African country build a much-needed dam.
The dam, in Lesotho's Metolong region, will capture water from mountain springs. The harnessed water then can be stored in tanks for later use by households and by the country's expanding garment manufacturing industry.
The project will preserve 28,000 existing jobs in garment factories and in communities around the dam waterway and create 6,000 new jobs, Kumar Ranganathan told USINFO. Export sales of garments are Lesotho's main income generator, said Ranganathan, MCC's director of infrastructure.
No residents will be permanently moved because of the project, although some livestock may be moved temporarily to other grazing areas, he said.
MCC agreed in July to invest $164 million in the dam and in urban area water system upgrades. An estimated 304,000 people will benefit from the urban water activities.
The U.S. aid agency agreed to fund the dam project following its analysis of initial designs prepared by international experts recruited by Lesotho's government and a World Bank-supported independent environmental impact study, Ranganathan said.
The Lesotho water project funding is a key part of an overall $362.6 million grant that includes $122 million for strengthening the country's health care infrastructure and increasing access to anti-retroviral drug therapy for people living with HIV/AIDS.
Approximately 24 percent of Lesotho's adults are HIV-positive. That is the third-highest prevalence rate in the world, according to MCC.
Another portion of the grant -- $36 million -- will be used to help Lesotho expand its private sector through legal reforms and efforts to help women become more involved in the country's economy, according to MCC.
MCC Chief Executive Officer John Danilovich signed the grant agreement -- which is called a compact -- with Lesotho Minister of Foreign Affairs and International Relations Mohlabi Kenneth Tsekoa June 23.
"By unlocking the potential of its two greatest resources -- its water and its people -- and by fully engaging private enterprise, Lesotho is maximizing the impact of its compact with the Millennium Challenge Corporation to tackle poverty and make the promise of sustainable development a reality," Danilovich said at the signing ceremony at the State Department.
"The compact will help the government and people of Lesotho to build the infrastructure for long-term progress and prosperity by encouraging economic and legal reform," Secretary of State Condoleezza Rice said at the signing.
The compact will nearly double Lesotho's rate of economic growth in five years, Prime Minister Pakalitha Mosisili said at a public forum the next day.
Lesotho, located within the expanding Southern African Development Community, now stands to gain from that soon-to-be common market.
Since 2004 MCC has awarded 14 multiyear development grants to countries that have involved their communities in prioritizing their poverty reduction goals. Seven of the grants, totaling more than $2.4 billion, have been made to African countries.
(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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