The human face of poverty

Poverty has a human face, and in Lesotho it is frequently the face of an unqualified person without employment, who is poorly dressed, has no money and lives in a decrepit house far from basic services. Often - but not always - the person is a women or a child, frequently left more vulnerable by disease and death. Without protection, the person is often a victim of crime and feels abandoned by Government in general, and by the legal system in particular. He or she fears that political struggles may easily result in conflicts or the inappropriate use of resources.

Wage employment critical, but limited

From the image above, built from descriptions given during the community consultations, it is clear that poverty in Lesotho is very closely associated with the absence of wage employment and income. This is not surprising as Lesotho has a harsh and erratic climate with rugged terrain and poor soils, all of which make agriculture a risky enterprise. For generations the most secure form of income for Basotho has been migrant labour on the mines of South Africa, but with the number of miners now less than half what they once were rural households are struggling to survive. Some households have been able to find work, mostly for younger female members, in the new textile industries. These are, however, concentrated in a few of the urban areas, whereas miners were recruited from all over the country. The availability of waged work makes the urban areas more prosperous, but the influx of job seekers far exceeds the number of positions available. As a result, conditions in the fast growing peri-urban areas are in decline: services are overwhelmed and the quality of life is deteriorating.

Different ways of measuring poverty

From the community consultations and from previous studies, it is apparent that poverty has to be assessed from both a quantitative and a qualitative perspective. Money-metric approaches make it possible to compare socio-economic groups across geographic entities, while a poverty line is a useful way of determining the minimum income or expenditure levels required to maintain a specific welfare level. An assessment of livelihood assets and access to services also offers a viable way of determining relative poverty. However, it is clear that people also perceive poverty as being associated with broader issues relating to peace, good governance, security and justice which they see as being fundamental requirements. In this section, a brief attempt is made to provide a holistic description of the nature and extent of poverty, based on these different perspectives.

A poverty line

Establishing Lesotho’s poverty line involved converting expenditure on 30 items of food and 10 own-produced consumption items into quantities and calories. The minimum expenditure on food necessary to meet the internationally accepted threshold of 2,200 kilo-calories required for a healthy and active life was then calculated, based on the cost per calorie actually incurred by Basotho families. By including an amount based on actual expenditure incurred on non-food items by households from the more deprived segments of the population, a per capita “poverty line” (in constant 2002 prices) of M146 per person per month was calculated. Half this level was defined as the “ultra poverty line”.

Increasing number of ultra-poor

Analysis between the two points shows that the incidence of poverty increased between 1986/1987 and 1994/1995. Approximately 58% of the population was poor in both survey years, but the percent of households that was ultra-poor increased from 35% to 39%. Taking population growth into account, in absolute and rounded figures, the number of poor people increased from 850,000 to 950,000 while the number of ultra-poor people grew from 500,000 to 600,000.

Confirmation from other studies and the community consultations

A series of poverty mapping exercises carried out in 1990, 1993 and 1999 confirms this trend. Although data are more limited (based on income and only major items of expenditure), they show that the rapid economic growth which Lesotho experienced up to 1998¹⁰ had limited or no impact on the majority of households.¹¹ The studies show that the exception was the relatively small proportion of the population with access to waged employment, confirming the community perception that employment is the key to sustained poverty reduction. Unfortunately the number of households with a wage earner (as opposed to general employment, which includes informal sector activities) declined from 59% in 1990 to 49% in 1999, while the number of adults with work fell from 30% in 1990 to 23% in 1999.¹² The statistical trends in employment were confirmed in every community consultation. Throughout the country people spoke of the declining work opportunities that they see as primarily being an outcome of the retrenchment of miners and the destruction of businesses during the unrest of September 1998.

High levels of growth needed

In order to reach the Millennium Development Goal (MDG) of halving the incidence of poverty by 2015, Lesotho’s economy has to grow by an estimated 7.5% per annum. In view of current growth trends of 3% to 4% per annum this target is unlikely to be achieved. Only with much greater and more focused effort will the goal be met.

Inequality is severe

Another major constraint to translating growth into poverty reduction is the persistently large inequalities in the distribution of income. The Gini coefficient, which is the most widely recognised inequality statistic, ranges from 0 (perfect equality) to 1 (perfect inequality). Gini coefficients computed for the country as a whole show that inequality in Lesotho increased from 0.60 to 0.66 in the period between 1986/7 and 1994/5, suggesting that inequality grew rapidly during this time. A new household budget survey has recently been completed and analysis of the data will update this critical indicator.

2.4.1 Education

Obtaining some form of employment in Lesotho is difficult under any circumstances. For those who are poorly educated it is virtually impossible. Studies show that there is a strong relationship between educational attainment of the head of the household and the incidence of poverty. A Mosotho’s chances of being in wage employment are determined by education, age and technical training, in addition to location and gender. Nearly 80% of those with a diploma, senior secondary or higher education, are employed, compared to 40% of those with less education. Educational achievement, especially secondary education, dramatically affects earnings, which increase marginally with education until 11 years, but then triples with the completion of the last year of education.

As indicated in Chapter 9, Government has made significant progress in improving access to education. Nonetheless, Lesotho’s educational system shows high repetition and dropout rates, with at least one half of primary enrolment traditionally dropping out before completing the primary cycle and about two thirds of secondary enrolment dropping out before graduating. Until recently primary enrolment was in decline, falling from 71% in 1996 to 61% in 1998.¹³ GOL took a bold step to reverse these trends in 2000 when it introduced Free Primary Education, which is being implemented one year at a time, raising enrolment to 85% in 2002.¹⁴ In addition, a targeted equity-based programme to cater for disadvantaged students at secondary and high school level is in operation. In this manner, the needs of the poor are being addressed in a meaningful way. Nonetheless, further reforms are necessary as there are valid concerns about the quality and efficiency of the education system, the high allocation of the budget to tertiary education and the supply-driven nature of technical and vocational training.

2.4.2 Water and Sanitation

Various studies show that significant progress has been made in the provision of clean water, rising from 52% to 63% in the 1990s. This has been achieved largely through the efforts of the Department of Rural Water Supply that has the mandate to serve all rural areas. However, the situation has deteriorated in the peri-urban areas, especially with regard to the number of people per collection point.

Similar progress has been achieved with sanitation, with the percentage of households with some form of latrine increasing from 31% in 1990 to 49% in 1999. However, less than 20% of households had proper VIP latrines, considered to be the only standard that affords adequate protection from a health point of view.

3.2.1 Context

Lesotho is a predominantly mountainous country, with an average altitude of more than 1600 metres above sea level. It covers approximately 30,350 square kilometres and has limited natural resource endowments. One-quarter of the land is lowlands and the remainder is highlands. Although it remains a least developed country, it has achieved a real annual average GDP growth rate of 4.2% between 1980 and 2002 and the national economy (GDP) has now reached M 7.5 billion (approximately US$ 1 billion). Lesotho has a population of 2.2 million growing at an average of 2.1% per annum and a literate but largely unskilled labour force represents the main national resource. It is entirely landlocked within the territory of the Republic of South Africa (RSA) and its economic development centres on its membership and participation in activities of SACU, the Common Monetary Area (CMA) and the Southern African Development Community (SADC).

3.2.2 Objectives

The macroeconomic policy framework and the consistent application of sound macroeconomic management are critical to the implementation of the Poverty Reduction Strategy. In setting an attractive environment for foreign and domestic investment, the policy is designed to: encourage domestic savings and foreign capital inflows; ensure that Lesotho experiences low and stable inflation; encourage rapid economic growth; influence the structure of economic growth to support the creation of productive employment opportunities; and set tax and expenditure policies which have a beneficial impact on the distribution of incomes and wealth. It should be noted that the discipline needed to achieve efficient economic growth must be provided by maintaining a stable and open incentive structure e.g. market-determined interest rates are required to ensure that the financial sector achieves an appropriate balance between the needs of both savers and borrowers.

The main objective of the comprehensive macroeconomic policy framework is to ensure economic stability by maintaining sustainable levels of fiscal deficit, inflation and external balances. In addition, it will address the critical challenge posed by the high levels of poverty by:

• providing the basis for sound and consistent macroeconomic management;

• creating an attractive macroeconomic environment which will support efficient production and generate faster economic growth by attracting both domestic and foreign investment; and

• improving public sector performance by consistently applying the principles of sound public expenditure management (i.e. achieving aggregate fiscal discipline; concentrating public resources on a core set of activities which contribute significantly to a pro-poor growth strategy; and improving operational efficiency).

3.2.3 Fiscal Policy

The main instrument of macroeconomic policy is fiscal strategy. The Government actively manages aggregate expenditures and revenues in order to ensure the sustainability of public deficits and debt and to contain aggregate demand.

The Government is committed to maintaining its membership in SACU, which governs trade for the member countries of Botswana, Lesotho, Swaziland, Namibia and South Africa. The Union has a common external tariff and guarantees free movement of goods amongst member countries. Currently, the SACU revenue-sharing formula generates approximately 50% of public revenue. However, there are concerns that the recent renegotiation of the SACU Agreement and the revenue-sharing formula in the context of impending Free Trade Agreements with the EU and USA will lead to a decline in customs revenues over the medium-term and this will reduce Government’s share in the economy.

3.2.4 Monetary Policy

The overall objective of the Central Bank of Lesotho (CBL) is to ensure price stability. Within the context of the common monetary area, price stability is attained by maintaining an adequate level of reserves which underwrite the fixed exchange rate system and reduce domestically-generated inflation. The fixed exchange rate regime pegs Lesotho’s currency, the loti, at par with the South African rand. Although monetary policy is conducted under the constraints of the CMA agreement, which prevents excessive money creation to finance fiscal deficits, the CBL has established a policy framework: the operating target is reserve money (i.e. currency in circulation plus bankers deposits); the intermediate target is interest rates, particularly on Government of Lesotho treasury bills; and the ultimate monetary policy target is net foreign assets of the CBL.

Interest Rates: If interest rates in Lesotho diverged significantly from those prevailing in South Africa, the demand for rand would outweigh the demand for loti. Financial resources would leave the country and the resulting loss of reserves would threaten the parity of the currency. Thus, interest rates in Lesotho must move in line with regional rates of interest. In September 2001, the Central Bank moved from the use of direct controls to the indirect instruments of monetary policy. The new system is intended to remove rigidities by introducing market-determined interest rates and allowing the rates to reflect the true scarcity of savings in the economy.

Net Foreign Assets: The integrated money and capital markets of the CMA make it imperative that Lesotho, as a small open economy with a fixed exchange rate regime, maintains a sufficient level of reserves, as measured by the gross foreign assets held by commercial banks and the CBL. A favourable reserve position enables Lesotho to honour its foreign financial obligations e.g. financing imports of goods and services, making debt repayments, meeting the foreign exchange demands of travellers and assuring investors of their ability to repatriate profits.

3.5.1 Overview

The Fiscal Strategy was prepared on the basis of an economic forecast covering the period up to 2007. The economic projections depict a baseline scenario for the movement of key economic indicators from 2003 to 2007. They are based on developments in five main sectors: production as recorded in the national accounts; price movements; the external accounts; monetary aggregates; and public finance.

Economic growth is dependent on the performance of the private sector, notably the exceptionally strong growth of the manufacturing sector. Overall, GDP in constant prices is projected to grow by an annual average of 4.0% over the period, while GNI will grow at 3.4% per annum. Although the rate of growth in GDP is well above the expected population growth of 2.4% per annum, suggesting that a sustained reduction in the incidence of poverty may be achieved, the slower growth in GNI remains a cause for concern.

The main instrument of macroeconomic policy is fiscal strategy. Several indicators can be used to assess the viability of the fiscal strategy, including various deficit concepts, the public sector borrowing requirement and key debt ratios. As presented in the background to the Budget 2004/05, in order to ensure that the overall fiscal stance remains within sustainable limits, the fiscal strategy is designed to:

• a) ensure that the exceptional SACU revenues anticipated for 2004/05 and 2005/06 are translated into overall budget surpluses;

• b) maintain the real value of public expenditure by ensuring that the main categories (other than interest payments) are increased by at least the annual rate of inflation;

• c) ensure that aggregate public expenditure grows by less than nominal growth in GDP, thus achieving a gradual reduction in the ratio of expenditure to GDP, in line with the forecast of a long-run decline in the ratio of revenue to GDP;

• d) ensure that the projected substantial primary surplus of revenue (including grants) over expenditure (excluding interest) is utilised to achieve a sustained reduction in the amount of domestic debt outstanding;

• e) maintain a surplus of current revenue over current expenditure in order to ensure that the public sector does not expand aggregate demand excessively; and

• f) secure additional external finance on concessional terms.

Achieving the goals listed above will have several beneficial effects on macroeconomic management and economic performance. The projected primary surplus will allow a reduction in the level of public debt and generate savings from the resulting decline in debt service payments. It will also contribute to stability in the balance of payments. The current surplus indicates that public saving is being used to finance the acquisition of assets. Securing concessional external finance will limit public demand for domestic capital (ensuring that private sector borrowers have access to the domestic capital market on reasonable terms and that potential investors are not crowded out). The gradual reduction in the share of the economy controlled by the public sector should improve key financial indicators (e.g. releasing resources to the private sector will encourage additional investment).

This Fiscal Strategy should also contribute to a significant improvement in public expenditure management by setting a sustainable aggregate expenditure ceiling and by targeting public resources on a core set of poverty-targeted programmes and on activities which contribute to a pro-poor growth strategy. A summary of the Fiscal Strategy is given in Table 3.1:

Table 3.1:

SUMMARY OF THE FISCAL STRATEGY, 2003/04 - 2006/07

Table 3.1:

SUMMARY OF THE FISCAL STRATEGY, 2003/04 - 2006/07

		2003/04	2004/05	2005/06	2006/07
Domestic Revenue		3,359.8	4,232.8	4,333.8	4,348.7
Grants		276.8	304.2	307.4	310.8
External Principal Repayments		206.0	254.0	275.7	293.4
Statutory Charges (exc. Principal)		336.7	419.6	386.4	392.6
Ministerial Expenditures		3,441.5	3,884.4	4,050.4	4,318.3
Of which: Wages & Salaries		1,117.8	1,215.9	1,319.2	1,431.3
	Goods & Services	1,062.2	1,210.2	1,146.6	1,209.7
	Transfers & Subsidies	520.6	648.2	683.9	721.5
	Capital	740.9	810.1	900.7	955.8
Net Lending		−13.7	−17.8	−1.0	−1.0
Total Expenditure (exc. Principal)		3,764.5	4,286.3	4,435.9	4,709.9
Deficit (including Grants)		−127.9	250.7	205.3	−50.5
Primary Surplus		91.1	466.8	372.6	106.2
Current Surplus		613.0	1,060.8	1,106.1	905.4

View Table

Table 3.1:

SUMMARY OF THE FISCAL STRATEGY, 2003/04 - 2006/07

		2003/04	2004/05	2005/06	2006/07
Domestic Revenue		3,359.8	4,232.8	4,333.8	4,348.7
Grants		276.8	304.2	307.4	310.8
External Principal Repayments		206.0	254.0	275.7	293.4
Statutory Charges (exc. Principal)		336.7	419.6	386.4	392.6
Ministerial Expenditures		3,441.5	3,884.4	4,050.4	4,318.3
Of which: Wages & Salaries		1,117.8	1,215.9	1,319.2	1,431.3
	Goods & Services	1,062.2	1,210.2	1,146.6	1,209.7
	Transfers & Subsidies	520.6	648.2	683.9	721.5
	Capital	740.9	810.1	900.7	955.8
Net Lending		−13.7	−17.8	−1.0	−1.0
Total Expenditure (exc. Principal)		3,764.5	4,286.3	4,435.9	4,709.9
Deficit (including Grants)		−127.9	250.7	205.3	−50.5
Primary Surplus		91.1	466.8	372.6	106.2
Current Surplus		613.0	1,060.8	1,106.1	905.4

The projected resource envelope allows limited “fiscal headroom” to finance new investments and additional recurrent expenditures justified by the PRS to encourage growth and reduce poverty. The Government can create some additional fiscal headroom by implementing substantive public sector reforms. Ministries are expected to make sustainable improvements in the productivity of their expenditure on goods and services and these potential savings should be reallocated to activities targeted at national development priorities as defined in the PRS.

The Government will need to strike a sustainable balance between budget reallocations, additional external borrowing and more grants. It will be desirable to secure a medium-term commitment from donors for both concessional loans and grants linked to the implementation of a realistically costed PRS.

Even more important than increasing the quantity of public investment, the Government must improve the quality of investments it undertakes and ensure that capital expenditures generate a commensurate improvement in national welfare. It is vital to use management information to identify locations and sectors where the returns to investment are likely to be high.

3.5.2 Deficit and Financing Strategy

Fiscal deficits measure the difference between total government expenditure (including interest payments but excluding principal repayments on the outstanding stock of public debt) and total receipts, including tax and non-tax revenue and grants but excluding loan repayments. The nominal value of the overall deficit (including grants) anticipated for the financial year 2003/04 is M 127.9 million. However, the projected windfall receipts from SACU will allow Government to achieve budget surpluses in 2004/05 and 2005/06, although the subsequent decline to more normal revenues means that this will revert to a balanced budget by 2006/07. There will be primary surpluses throughout the period but they are expected to fall from M 466.8 million in 2004/05 to M 106.2 million in 2006/07.

4.1.1 Overview

4.1.2 Constraints to further industrial growth, entrepreneurial development and job creation

While legislation is intended to protect all parties involved in industrial development in as fair a manner as possible, one consequence is that the process of licensing a new investment can be unnecessarily long and complex. There are currently too many Government departments involved in the process. The issuing of licences is centralised in Maseru, making it inconvenient for firms wishing to operate elsewhere in the country. These problems have negative effects that have hindered industry from reaching its full growth potential.

4.1.3 Potential threats to investment and industrial growth

In addition to the constraints listed above, there are a number of potential threats to the expansion of industry that will be monitored with a view to developing possible mitigation measures. Of particular importance to Lesotho, various international and regional trade agreements could have drastic implications for the country’s position vis-à-vis that of other investment destinations. These include the status of AGOA, the Multi-Fibre Agreement, the EU-RSA Free Trade Agreement, the SADC Free Trade Agreement and the SACU-USA Free Trade Agreement. Significant developments in any one of these could mean that the advantages Lesotho has gained through AGOA could disappear.

Another very critical threat is the HIV AND AIDS pandemic, which has major implications for workers well-being, productivity and turnover.

4.3.1 Attract domestic investment and foreign direct investment (FDI)

Attracting more FDI into Lesotho as well as enhancing domestic investment will not be confined to the garment sector. Serious efforts have been/will be made to identify other types of industries that can be attracted to Lesotho in order to add value to local products and diversify the industrial base. Under this broad objective, a number of strategies will be deployed during the three year implementation period of the PRS.

• Reduce administrative procedures to speed up the licensing process. In the first year of the PRS (2004/05) the legal framework will be established to set up a one-stop-shop that will speed up the licensing process. At the same time the Investment Promotion Centre of LNDC will be strengthened to improve efficiency. Particular attention will be given to the complex problem of facilitating access to land (outside of the LNDC estates) and to ensuring that immigration and work permits are efficiently processed.

• Improve the efficiency of the Department of Immigration. Government has taken heed of the concerns of ordinary people whose livelihoods are being impaired by service delivery in this critical area. Particular actions to be taken in the next year include: computerising the passport issuance systems; undertaking stringent supervision to curb corruption; decentralisation of Immigration functions to offices throughout the country; and improvement of human resource capacity to clear the back-log of applications.

• Provide basic infrastructure. The Government will give top priority to seeking viable and sustainable fast-track solutions to the provision of water supply. The findings from the Lesotho Lowlands Water Supply Feasibility Study will be examined in detail in 2004/05, with a view to providing water to high priority ‘wet industry zones’. Government will ensure that all new industrial estates have built-in water recycling measures.

  High priority will be given to providing factory shells when needed, as well as to upgrade the Maseru Terminal Depot in collaboration with Spoornet.

• Promote and facilitate investment. Activities aimed at investment promotion will continue with vigour. In 2004/05 new investment promotion materials will be developed and the capacity of Lesotho’s overseas missions to promote Lesotho as a prime investment site will be enhanced. In addition, Government will improve Customs efficiency and the capacity of trade negotiators.

• Improve workers’ productivity. Productivity is a multi-faceted issue which needs to be addressed, in the long-term, by addressing attitudes towards work and employment (through the school system). Training and capacity building of workers with a view to increase their productivity will be given due priority. Training will be geared towards equipping Basotho with skills that are necessary for assuming key positions. A skills development fund will be established to finance training of these entrepreneurs and of workers in key positions.

• Improve labour stability. The key activity here will involve the strengthening of tripartite relationships through an Economic Forum or National Employment Council. Current policies and legislation pertaining to labour will be reviewed and revised. Dispute resolution mechanisms will be decentralised to key districts where major industrial development is planned.

• Establishment of a comprehensive social security scheme. The Government will continue to explore means and ways to establish a comprehensive social security scheme that will cover both the formal and the informal sector workers. When the scheme is fully operational it will improve the welfare of the ex-workers and their dependants by providing them with income after they have stopped working. In 2004/05 the Government will introduce an old age pension scheme for those aged 70 years and above as a safety net measure. The scheme will also entail an investment portfolio that will provide a potentially large pool of financial resources that could also be directed to support certain sectors of the economy.

4.3.2 Support local business

While appreciating the very significant impact of FDI, the long term goal of promoting local businesses owned by residents of Lesotho will not be overlooked. In the three year PRS implementation period the Government will pursue the following key strategies:

• Build the skills of Basotho entrepreneurs and productivity of workers. The Government will seek to improve the resources and capacity of local training institutions to run appropriate courses designed specifically to increase the skills of local entrepreneurs and to promote self-employment. In the first year proposals from institutions will be reviewed.

• Develop sustainable market opportunities. Over the next three years key people will be selected from Government ministries (MTICM, MOFDP, MOFA) and the private sector to be trained in market identification and negotiation skills. The key to the success of this will be the creation of linkages and niche marketing of the opportunities presented by Lesotho’s alpine climate. Local entrepreneurs will be encouraged to organise themselves into partnerships that will enable them to supply quality products to common markets. If successful, Government believes the employment creation possibilities of such efforts will be significant and will have a direct impact on the poor.

• Support adoption of appropriate technology. The Bethel Business Community Development project²⁴ provides an ideal model for technological multi-disciplinary skills- development. A study will be conducted on how best to up-scale this model. Where appropriate technology is proven to have lasting benefits, Government will seek to link it to a subsidy or credit scheme.

4.3.3 Increase support to Small, Medium and Micro-Enterprises

Experience in Lesotho and elsewhere suggests that direct intervention by Government, in the form of subsidies and supply-driven training, is not effective in encouraging sustained entrepreneurship and profitability for SMMEs. Instead, it creates a culture of dependency and poor debt servicing. Thus, the objective for Government during the PRS period is to provide an effective institutional support that facilitates growth driven by private investment and SMMEs.

The prosperity of the SMMEs requires a conducive environment created by supportive legislation, policies and a favourable institutional framework. The Ministry of Trade and Industry, Cooperatives and Marketing (MITCM), in collaboration with relevant stakeholders, is in the process of implementing the SMME policy. Government is firmly committed to furthering this process during the PRS implementation period.

The vision of the Government for future institutional support starts with the following premises:

• the development of the SMME sector will only be sustainable if it can provide goods and services in a competitive market;

• Government should not crowd out the private sector by distorting domestic markets, by competing with private sector producers or by raising the cost of resources (either pushing up capital costs by an inappropriate fiscal strategy or labour costs through excessive regulation);

• Government should establish the necessary legal framework to facilitate the development of savings mobilisation by SMME groups to provide the basis for lending;

• Government will actively encourage deregulation to allow informal sector activities to flourish;

• Government should provide information to SMMEs about relevant regulations and local and regional market opportunities; and

• Government should not provide small business finance but instead encourage groups to secure commercial loans when they need capital.

In addition to providing an appropriate policy and legislative framework, core strategies to be implemented in support of the SMME sector include:

• Access to Business Development Services. Business skills development and demand-driven training and business counselling are fundamental. In Lesotho there is a limited entrepreneurial culture and limited business experience. There is a need to develop understanding of how markets operate, how to take advantage of them and how best to make use of facilities and services that are available. Previous Government interventions have produced very limited entrepreneurial culture due to their supply orientation. In order to change this situation Government is committed to implement a number of interventions which will be implemented during the PRS period:

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    Development of Entrepreneurial Culture. Through the Ministry of Education and Training (MOET), MITCM and private sector business associations, Government will improve the national curriculum to strengthen its business component. MOET will complete its policy paper that has already received positive support from a variety of stakeholders.

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    Business Counselling. Government will endeavour to integrate local SMMEs into an overall economic development programme and will strengthen its multi-agency strategy to be coordinated by the MITCM in the provision of training, counselling and mentoring. Where Government does not have enough practical experience or expertise for this, it will outsource such services from the private sector. Priority will go to new enterprises that have high export potential, high value addition to the economy and an impact on poverty reduction.

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    Support to Business Associations. For the purposes of monitoring progress, ensuring quality and protecting consumers, Government will collaborate very closely with the local SMME business councils and Lesotho Chamber of Commerce and Industry (LCCI) and will provide information and support on a regular basis. It will strongly promote public-private sector dialogue that results in further improvements in policies and strategies. During the first phase of the PRS, Government will spend time creating these essential working relationships so as to develop mutual trust and cooperation between the private sector and the public sector. It will promote greater use of information technology that fosters an entrepreneurial culture and provides useful contacts for the purposes of marketing and networking.

• Access to credit for the poor. During the PRS period the government will conduct a study to assess how credit can be made more accessible to the SMMEs in a viable and sustainable manner. This study will aim to consolidate all past studies and work done so far in this regard with a clear aim to:

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    establish demand and supply for credit;

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    identify constraints hindering the present credit schemes and commercial banks from meeting the credit demand of the SMMEs;

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    learn positive and negative lessons from past schemes, with a view to emulate successes if any;

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    suggest how the identified constraints can be addressed.

  The study will serve as a basis towards the formulation of a long overdue micro credit policy. The policy will guide all future activities geared towards making credit more accessible and more effective in stimulating growth and employment creation. In developing a micro credit policy the government will adopt a participatory approach by involving key stakeholders, including credit institutions, the SMMEs and business support institutions. The objective will also be to adopt an integrated approach, as credit alone will not solve the SMMEs’ constraints, unless accompanied by concrete measures such as those proposed below.

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    Rural Finance Savings and Credit Groups. Under this scheme, the Central Bank of Lesotho (CBL) encourages commercial banks to lend to groups through a credit guarantee scheme with funds mobilised either from donors or Government to underwrite loans extended. During the PRS period the Government will extend this scheme with a view to build confidence in private banks to extend credit to local investors. This scheme will also facilitate linkage between these groups and banks where groups will open savings accounts in which they will deposit their savings regularly. The savings mobilised in this way should be able to facilitate credit to its members.²⁵

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    Export Finance and Insurance Scheme. Government will support this through a modification of an earlier scheme established in 1988. The Scheme aims to ameliorate the financial impediments faced by Lesotho exporters and to expand and diversify the country’s export base. This will be done by assisting exporters to access credit from commercial banks to meet their working capital requirements (through a loan guarantee fund) and to manage particular risks through insurance cover. In order to ensure that SMMEs benefit fully from this scheme, about 60% of the fund will be apportioned to this category of exporters while the rest will be reserved for large scale exporters.²⁶

  Government recognises that the success of credit schemes will depend on the following factors: availability of financial services, access to markets, business development training, the extension of property rights and functioning commercial courts. Government is committed to two particular areas to be explored and furthered during the PRS period:

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    Financial services. This entails increasing access in rural areas through Postal Banking Services announced in the 2004/05 budget.

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    Credit Bureau. The Bureau will assist lending institutions to assess the credit worthiness of borrowers before their loans are approved. However, this depends on the introduction of national identity cards that are necessary to ensure loan repayments. During the PRS period the Government will explore the feasibility of this further.

• Access to markets. SMMEs often have poorly developed marketing strategies and struggle to sell their products. Promotion of any product will henceforth need to be linked to marketing to ensure the balance between supply and demand. To date, Government’s efforts have included provision of industrial estates, market stalls and sites for street vendors. Service providers have held district trade fairs and flea markets are organised by BEDCO on a monthly basis. These efforts have had limited success, partly because in rural areas entrepreneurs cannot access these facilities due to distance and cost of transporting their merchandise.

During the PRS period, the Government will undertake the following activities to enhance market access for the SMMEs:

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  Review Government procurement policy to give preference to SMMEs in order to encourage them to participate meaningfully in the economic growth of the country. The policy will encourage sub-contracting and joint ventures with local SMMEs wherever practical without compromising the quality of supplies and/or services.

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  Establishment of market centres equipped with modern technologies that facilitate easy access to information on markets and marketing for existing and potential local products in strategic and accessible places countrywide. The Government will provide sites, market shells, display areas, sanitation and water systems in market places and key areas where licensed street vendors operate in urban areas.

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  Piloting of rotational markets - through a network of BDS providers - that combine provision of mobile basic services (e.g. post, bank, health and telecommunications) with marketing opportunities.

4.3.4 Make optimal use of natural resources

Lesotho is a country that is blessed with a unique blend of natural resources. Although the rocky terrain of high mountains and deep valleys is an impediment to development, the Government also sees opportunities to use these very features in the struggle against poverty. While the cold, harsh winter climate is a constraint to agriculture, the Government is seeking to identify high-value, niche crops that can only flourish if exposed to the cold. Even the gullies that scar much of the lowlands are a resource waiting to be harnessed as it is here that moisture and soil nutrients can be captured and exploited for productive purposes. In short, a concerted effort will be made to turn commonly perceived “problems” into opportunities for development. Three areas will receive particular attention: agri-business, tourism and mining. Over the PRS period the Government will:

• Develop agri-business. Government has recently completed an Agricultural Sector Strategy that describes the need to introduce new crops and agricultural technologies.²⁷ Over the last decade a series of studies have established the feasibility of growing various high value crops well suited to Lesotho’s exceptional African alpine climate.

  Working in six selected pilot areas, specialised production zones will be created where concerted effort is focused on one or two high value crops suited to the soils and micro-climate of the area. ²⁸ Promotion of the selected specialised crops will be based on commercial links (e.g. to the walnut de-shelling plant in Hershel) or guaranteed markets (e.g. out-growing contracts for herbs).

  Ownership and production will be by individuals on their land, while training and marketing will be through producers’ groups or co-operatives. As far as possible, the high value trees and herbs will be intercropped between food crops for local consumption. Communities will be encouraged to identify fields that have been left fallow for more than five years for re-allocation to landless people wishing to participate in the programme (in keeping with the 1979 Land Act or subsequent legislation).

  Where irrigation is necessary this will be done wherever possible through appropriate water harvesting, gravity fed systems or manual pumps. Agricultural subsidies will be focused on rewarding innovation and effort. Larger commercial schemes (involving land pooling) will be encouraged where protection of the poor is clearly demonstrated through fair and transparent rental arrangements or provision of work. By the third year, Government anticipates that at least three of the pilot projects will be showing enough promise to be significantly expanded.

• Develop and diversify the tourism product and encourage community-based income generating activities on the tourism sites

  Lesotho’s dramatic alpine scenery and villages offer a unique product within Southern Africa. With over 300,000 tourists visiting Lesotho per annum there is considerable potential for their expenditure to create employment and income generating opportunities in parts of the country that will never attract other investment. For this reason Government believes tourism should be given high priority, especially where investors are able to demonstrate links between lodge-based services, such as accommodation and food, and community-based services such as guiding, pony-trekking and cultural activities (as is the case, for example, at Malealea, Morija and Semonkong).

  Over the next three years the Government will aim to extend the average number of days spent by tourists in Lesotho from two and a half to four and to increase average expenditure from M132 per day to M200. This will be done primarily by a joint tourist promotional package with the Republic of South Africa, where Lesotho is promoted as one of the main stopovers in the circuit. The Morija Arts and Cultural Festival, the Roof of Africa Rally, the Maseru-Mohale bicycle race, and other national events will be promoted and strengthened as a means of increasing awareness of the Lesotho brand.

  Working under the Tourism Policy of 2001 and the Tourism Act 2002, the Lesotho Tourism Development Corporation (LTDC) will strive to diversify what is on offer by developing one new tourist site per annum over the next three years. Community awareness campaigns will focus on these areas. Consideration will be given to introducing a tourism levy to generate a fund that assists community-based initiatives to improve the quality of their product. A new grading system will enable even the poorest households to participate in these developments through the provision of over-night hut accommodation linked to hiking and trekking routes mapped out and promoted by LTDC in collaboration with private lodges.

• Develop mining industry. For centuries Basotho have made use of natural stone for building their homes. From these homes men have migrated to South Africa to produce minerals that have fuelled Africa’s most powerful economy. No wonder then that ordinary people throughout the country believe poverty can be alleviated through exploiting rocks and minerals. Some progress has been made in promoting use of local building materials through Government’s policy that new public buildings should feature sandstone. Over the next three years, Government will evaluate sandstone reserves and seek to strengthen market links. Mining initiatives that generate employment will be provided with access to credit and training. New sandstone products (such as those being produced by the Mineworkers’ Development Agency groups) will be actively promoted.

  Lesotho already exploits reserves of dolerite and clay. Over the next three years production will be increased by the private sector in particular areas, including Ha Teko, Ha Motloheloa (clay), Kolo, Letšeng and Kao (diamonds).

  Government will strive to create an enabling environment for these activities by implementing the new Mines and Minerals Act 2005 and monitoring the use of resources to ensure safety, health and environment.

Goal:
Number One: Employment Creation and income generation
Indicators	Baselines	Targets
Unemployment rate	31% in 1999	27% in 2006
Key Strategies and Activities for Implementation:
Create a conducive environment for attracting domestic and foreign direct investment. Increase support to the SMMEs in a targeted manner in line with the SMME policy in order to meet their most basic needs, such as access to credit, appropriate technology and markets and create viable linkages between SMMEs and large scale enterprises. Develop sustainable market opportunities for locally produced products and improve their quality and price competitiveness through demand-driven capacity building activities targeted at trade negotiators, entrepreneurs and the workforce. Provide basic infrastructure such as factory shells where needed, develop the Maseru terminal depot and the four new industrial estates in Tikoe, Mafeteng, Mohale’s Hoek and Butha-Buthe in a phased manner depending on established financial and economic viability. Facilitate international trade e.g. by improving customs efficiency. Intensify investment promotion measures by strengthening the capacity of the Investment Promotion Centre of LNDC and of foreign missions in strategic countries in order to improve efficiency in attracting foreign and local investment. Establish a sound industrial relationship through tripartite economic forum or National Employment Council. Make optimal use of natural resources by developing agro business, tourism and mining in a manner that is anchored in community participation and private sector development.
Total Incremental Costs:
2004/05	2005/6	2006/7	Total
M 92,756,890	M49,970,191	M46,919,066	M189,646,147
Key Implementing Sectors:
Trade, Industry, Cooperatives and Marketing Employment and Labour Agriculture and Food Security Natural Resources Tourism, Environment and Culture Private Sector
Comment:
Efforts were undertaken to harmonise this section with the Integrated Framework due to commonality of strategies and objectives.

View Table

Goal:
Number One: Employment Creation and income generation
Indicators	Baselines	Targets
Unemployment rate	31% in 1999	27% in 2006
Key Strategies and Activities for Implementation:
Create a conducive environment for attracting domestic and foreign direct investment. Increase support to the SMMEs in a targeted manner in line with the SMME policy in order to meet their most basic needs, such as access to credit, appropriate technology and markets and create viable linkages between SMMEs and large scale enterprises. Develop sustainable market opportunities for locally produced products and improve their quality and price competitiveness through demand-driven capacity building activities targeted at trade negotiators, entrepreneurs and the workforce. Provide basic infrastructure such as factory shells where needed, develop the Maseru terminal depot and the four new industrial estates in Tikoe, Mafeteng, Mohale’s Hoek and Butha-Buthe in a phased manner depending on established financial and economic viability. Facilitate international trade e.g. by improving customs efficiency. Intensify investment promotion measures by strengthening the capacity of the Investment Promotion Centre of LNDC and of foreign missions in strategic countries in order to improve efficiency in attracting foreign and local investment. Establish a sound industrial relationship through tripartite economic forum or National Employment Council. Make optimal use of natural resources by developing agro business, tourism and mining in a manner that is anchored in community participation and private sector development.
Total Incremental Costs:
2004/05	2005/6	2006/7	Total
M 92,756,890	M49,970,191	M46,919,066	M189,646,147
Key Implementing Sectors:
Trade, Industry, Cooperatives and Marketing Employment and Labour Agriculture and Food Security Natural Resources Tourism, Environment and Culture Private Sector
Comment:
Efforts were undertaken to harmonise this section with the Integrated Framework due to commonality of strategies and objectives.

Donor/GOL interventions have often created a dependency syndrome

The prospects for increasing staple food production are not good. Despite massive efforts by both Government and donor agencies, Lesotho remains highly dependent on cereal imports. Indeed, to a certain extent, it is likely that the interventions themselves may have limited increased productivity as they raised expectations and created dependencies that the state has been unable to address in a consistent manner. Erratic subsidies and emergency interventions, which vary from one year to the next, have often been counterproductive in the long run as families often wait to see what will be available from Government, and then miss critical planting dates.

Agriculture is often uneconomical while production is inadequate

It is not only Government that has been subsidising cereal crop production. Over the years, households have themselves subsidised ploughing and planting costs by diverting income from other sources - such as mine remittances - to crop production. Because few households keep proper records, they are not aware that their costs often exceed their returns. However, a cost-benefit analysis of crop production in the Lowlands, where there is greater dependency on mechanised traction and purchased inputs, shows that the majority of households are making a loss.³⁰ In the mountains, where direct costs are lower because people tend to use animal traction, manure and their own seeds, crop production is profitable, but the amounts grown fall far short of the requirements. Nationally fewer than 5% of households produce enough cereals to feed their families throughout the year, with the remainder having to purchase part or all of their cereal needs.³¹

Lesotho produces approximately 30% of the total food requirement

The country produces around 30% of the total food required to feed its population in a normal year. This means that 60% of the annual cereal requirement has to be imported at the going regional market price. Household purchasing power therefore plays an important role in household food security. This in effect means that overall households are probably more vulnerable to increases in the price of maize than they are to low crop production as a result of erratic weather patterns. Although the current situation in Lesotho cannot be characterised as an emergency, most rural populations will face Food/Income deficits and interventions will be necessary. However, interventions clearly need to go beyond food aid. This is because the current food access problems are a result of low food production, increases in the price of staple foods and depressed employment markets. It is within this context that the PRS aims to address food security through an increase in agricultural production, employment creation and income enhancement.

Mine retrenchments have exacerbated low production

The decline in mine remittances has had an impact on food production as far fewer households have the necessary income to invest in the required inputs. For poor households the annual practise of procuring the required inputs for cereal production is almost insurmountable. In the past this would have been overcome through sharecropping with other households but, as the number without wage employment grows, the prospects for sharecropping have declined.

Settlement patterns help to cause depletion of soils

Basotho live far from their fields. For reasons that can be traced back to the time of Moshoeshoe I, the pattern of settlement is such that people and animals are separated from the land which they use to produce their food. The most serious implication of this is that it is virtually impossible to maintain fertility as the distances between the sources of soil nutrition (manure) and the fields is excessive. Fertility and soil conditions steadily decline as the majority of families are unable to find the means to transport manure to the fields and are unable to afford artificial fertilisers. Depletion of organic matter in the soil - exacerbated by the removal of crop residues for fuel or fodder - results in a reduction of the soil’s capacity to retain moisture, which in turn means that crops are increasingly vulnerable to dry spells that they might otherwise have survived in the past.³² The decline in soil fertility and in its capacity to produce good crops needs to be appreciated in the context of Lesotho’s very limited arable land, estimated at less than 10% of the total area, or about 0.2 hectares per person.

Livestock conditions are also declining as communal land is not being well managed

In the livestock sector, productivity has not increased,³³ largely as an outcome of overstocking, uncontrolled grazing and the associated decline in range conditions in many parts of the country. To a certain extent, reduced levels of control stem from a reduction in the authority of chiefs who once had exclusive powers of control over natural resources. Until new local government structures are well established, the prospects for properly controlled grazing and range recovery are remote, which means the quality of the stock will remain low in most cases.

The impact of stock theft increases poverty

Stock theft, which the communities perceive as a significant cause of poverty, is limiting the growth of herds. Although this allows some recovery of range lands in certain places, this is of little consolation to those households who have lost their livelihoods overnight. During the community consultations, devastated individuals described how they had been thrown into poverty and hunger through stock theft. Descriptions of the thefts suggest high levels of organisation implying that the thieves are far from poor (in some cases trucks were involved in moving the animals). Moreover, there is a strong perception that some police, chiefs, officials and businessmen are involved in these criminal networks. In border areas, there are clear indications of the international dimensions to stock theft that will need to be addressed if any progress is to be made.³⁴

Distribution of livestock is highly skewed

In developing programmes to assist the poor, cognisance must be taken of the fact that the proportion of households that own livestock is declining (between 1993 and 1999 cattle ownership fell from 48% to 39% while sheep and goats ownership fell from 32% to 26%). The average number owned is low (1.43 for cattle and 3.96 for small stock) with very limited variation across income quintiles. However, a small percentage of rich households own large herds. These wealthier members of the community are able to benefit more from the communal resource than those who do not own any livestock. In the early 1990s an attempt was made to introduce locally-managed grazing fees which would have resulted in livestock owners effectively paying their communities something for use of rangeland, but this failed due to lack of popular support. The issue of unequal access to natural resources remains and it is necessary to work towards a consensus with the various stakeholders on a way forward.

Credit facilities are very limited and crop insurance unobtainable

Whether it regards livestock or crops, access to capital for farmers to procure inputs is very limited. Community-based schemes are sometimes able to offer very small amounts but formal rural credit is not accessible. This severely constrains farmer initiatives and the improvement of existing resources. For progressive farmers, no crop insurance is available.

Marketing facilities are poorly developed hindering sale of surplus production

Rural marketing facilities are very poorly developed in the country. Few traders operate in rural areas, and marketing infrastructure, including roads, storage facilities and market places have not been established. This makes it hard for farmers who have small and variable surpluses to dispose of them for cash. It is also possible that marketing structures fail to develop because surpluses are too small and variable to maintain them. As a result markets are poorly integrated and prices vary widely from place to place.

HIV and AIDS has an increasingly negative impact on production

As productive members of a household succumb to disease it is evident that this will have an impact on the amount of food they are able to produce. Poor health undermines energy levels making labour-intensive tasks, such as ploughing and planting, difficult to perform.

Socialisation/Education have tended to discourage agriculture

Because paid employment is seen as the most desirable option and because much of the emphasis for many years has been on book learning in schools, many Basotho rate agriculture as an undesirable mode of life and thus as a low priority. Although agriculture is subject to the variability of climate and other factors, certain men and youth ignore the obvious potential of homestead plots/fields and other local resources that could easily provide better food security and thus opportunities are lost.

Optimising land use can greatly promote food security

Despite the challenges facing the country, Basotho are convinced that Lesotho has land, livestock, labour and water resources that if brought together in the right way will go a long way towards ending malnutrition. Measures are planned to deal with all of the problems mentioned above. Agriculture forms a major part of the Government’s fight against poverty. It also recognises that it has the potential to play an even greater, and much more fully integrated, role in the economy. Although productive land is scarce in overall terms, in actual fact it is massively underused, with many fields lying fallow from one year to the next. By promoting and facilitating different forms of sharecropping, much of this land can be brought back into production. By optimising the use of the small amounts of land immediately around people’s homes even those who do not own fields can boost food security.

Intensive farming methods are now a high priority

Over the last decades, Basotho agricultural researchers (notably J.J. Machobane) have demonstrated that land, either around the home or in the more distant fields, can be intensely worked year round. With effort and the right combination of crops and organic farming principles, a family can live off a small piece of land in its possession and generate a surplus for sale. Combined with conservation farming and agro-forestry, the organic farming practices that have been developed locally and abroad can revive soils and restore productivity. Even in urban areas, much greater productivity can be achieved from the small parcels of land that people possess. Since agriculture and food security was a high priority during consultations, the battle for food security will be given high priority by Government over the next three years.

5.3.1 Adoption of appropriate farming practices and timely access to inputs

In order to achieve these objectives the Government will:

• Encourage farmers to adopt appropriate farming practices and to diversify field crops in areas that are ecologically suitable. It will also engage the private sector to ensure that the required inputs are available as widely as possible and that they reach the farmers in time. Those households who are prepared to engage in intensive farming practices will be supported through training and targeted subsidies.

• Explore block farming opportunities and mechanisation services. Government will encourage interested Basotho land owners to enter into block farming. This is to intensify and mechanise farming and reduce production cost by exploiting economies of scale. During the PRS period this approach will be piloted, with careful monitoring to determine its viability.

• Prioritise use of land around the homes. Greatest priority will be given to ensuring that the land around people’s homes (that is closest to animal manure and most easily defended against theft) is made as productive as possible, particularly for vegetable production.

• Construction of water tanks. As a growing majority of Basotho have built homes with corrugated iron roofing (as opposed to older styles using thatching grass), it is now possible to greatly improve household vegetable production using rain water collected in inexpensive water tanks constructed on site.

• Provide specialised support for HIV and AIDS-impacted households. Those families who have been impacted by HIV and AIDS, particularly those involved in home-based care programmes, will be targeted. A programme will be developed that minimises labour by using activities such as key-hole gardens and household water storage systems, as well as providing seeds of plants that are known to combat opportunistic infections and boost the immune system (such as garlic).

• Design packages for child-headed households. In the first year of the programme, a special package will be designed for child-headed households that will enable them to link intensive horticulture to other activities such as bee-keeping or free-range poultry production. Appropriate share cropping activities will be designed and implemented so that orphans who have land can be assisted with ploughing services and other agricultural inputs.

5.3.2 Development of appropriate irrigation systems

Government recognises that previous irrigation schemes have failed largely because large areas of land were targeted without proper consultation with farmers. The new approach will, therefore:

• Identify smallholder farmers and encourage them to use the appropriate gravity fed techniques and water harvesting. This will be closely co-ordinated with the activities described under the previous strategy with poor families being targeted for any subsidies.

• Explore opportunities for irrigation along the Caledon and Makhaleng rivers in partnership with South African farming communities. South African farmers are already taking advantage of these rivers for irrigation purposes. During the PRS period the Government will initiate a dialogue with neighbouring farmers on how best to collaborate on irrigation matters.

• Determine longer-term opportunities arising from the Lesotho Lowlands Water Supply Scheme Feasibility Study. The Ministry of Agriculture and Food Security will actively participate in discussions regarding the LLWSS with a view to identifying irrigation opportunities that can be implemented in a participatory and technologically appropriate manner.

5.3.3 Strengthening and decentralising extension services at area level within all districts

Government recognises that the above strategies cannot be achieved without the active engagement of poverty-conscious extension workers. Over the next three years Government will accelerate progress already made under the Unified Extension approach with the following activities:

• training of extension workers and decentralising them to area level;

• identifying and outsourcing components of the extension service;

• improving communications and networking with NGOs and business.

5.3.4 Ensuring an efficient and standardised land tenure system

Food security will not be achieved if the poor are not confident about their ownership of the land they want to make productive. Organic farming systems may be proven, but they require considerable commitment over many years to rebuild soil quality, establish water harvesting systems and plant trees. This commitment will not be forthcoming if land tenure is not secure. Government will therefore undertake the following in the next three years:

• amend the legislation in order to address any inequality between men and women with regard to land ownership;

• develop a National Land Policy and enact the Land Bill;

• develop a digitised land information system.

5.3.5 Improving livestock and fodder production

Animals have played a critical role in helping Basotho through difficult times. During the PRS period, Government will encourage appropriate animal husbandry and strengthen the links to homestead food production. Government will promote the use of dairy goats and indigenous chickens. It will also encourage the planting of lucerne and fodder tree species linked to water harvesting systems. In areas better suited to extensive animal husbandry the focus will be on improving range management through community-based associations. Government will also promote fodder (grasses) production on marginal land, especially in the Southern districts, as a substitution crop and a means of restoring soil fertility which can be followed by systematic cereal replanting. This will be linked - through cut and carry practices - to the intensive livestock and horticulture systems described earlier.

5.3.6 Improving marketing systems

Lesotho is not heavily dependent on agricultural exports. However, if successfully implemented, the strategies listed above will result in households moving fairly rapidly from meeting their own consumption needs to generating a surplus for sale. The successful sale of such surpluses will help to ensure that food security objectives are achieved as cash becomes available for other purposes. As homestead gardening results in the production of relatively small quantities of fresh produce it is important to find ways of disposing of this rapidly and as close to the homestead as possible. In places near factories, local gardeners are successfully selling large quantities of fresh vegetables to workers. The challenge ahead will be to strengthen and expand such opportunities. One way to do this is through the creation of rotating markets where both buyers and sellers know that on a given day sales of fresh produce will take place. If essential services (such as a mobile post office or bank) are provided at the same time, this attracts people, further stimulating sales of farmers’ produce.

Where marketing of surplus fresh produce is difficult, emphasis will need to be placed on food preservation and storage technologies. This can be done through well-established networks of Government nutritionists and NGOs such as the Homemakers Association.

Government will also facilitate links between farmers who start producing on a larger scale (through block farming, for example) and buyers looking for particular products. While such farmers may not be amongst the poorest they do generate employment and stimulate the economy.

As far as possible, Government will encourage the private sector to take the lead in marketing activities. The primary role of the Government will be to stimulate links, provide encouragement, regulate and promote high standards of produce. To this effect, the sub-sector will undertake the following strategies:

• enhance market research and market information services;

• ensure the maintenance of standards and enforce fair trading practices;

• improve the response to local, regional and international market opportunities;

• improve marketing infrastructure in partnership with the private sector;

• pilot rotating markets linked to provision of essential services, particularly for producers of fresh produce;

• provide training on the preservation of surplus fresh produce.

5.3.7 Strengthen food security database

During the medium term, the food security data base will be strengthened, in order to address the existing weak national information systems, inadequate analysis of food price data and inefficient early warning systems. This will facilitate better understanding of vulnerability and inform policy making and budgeting.

Goal:
Number Two: AGRICULTURE AND FOOD SECURITY
Indicators	Baselines	Targets
• Crop production (tonnes)
Maize	130,934 in 1997/98 - 2001/02	140,000 in 2006
Wheat	26,065 in 1997/98 - 2001/02	30,000 in 2006
Sorghum	28,047 in 1997/98 - 2001/02	30,000 in 2006
• Crop yields/Hectare
Maize	0.781 in 1997/98 - 2001/02	0.9 in 2006
Wheat	1.174 in 1997/98 - 2001/02	1.3 in 2006
Sorghum	0.883 in 1997/98 - 2001/02	1.0 in 2006
• Area under irrigation (hectares)	80 in 2002/03	150 in 2006
• % of households with food insecurity	36% in 2002	32% in 2006
• Livestock: Formal exports of:
Wool (tonnes)	1,327 in 2000/01	1,650 in 2006
Mohair (tonnes)	262 in 2000/01	325 in 2006
Key Strategies and Activities for Implementation:
Adopt appropriate farming techniques and practices and support production of suitable crops properly adapted to local conditions. Develop irrigation infrastructure to support large scale irrigation for commercial farmers. Identify smallholder farmers and encourage them to use appropriate gravity fed techniques, water harvesting, water management and irrigation techniques to supplement rain fed agriculture. Train a pool of extension agents and decentralise them to area level. Ensure that inputs are available to farmers on time. Promote and develop support for better market linkages and processing in a sustainable manner. Improve livestock through rearing of high quality stock and increasing access to veterinary services and drugs. Legislate land reforms for effective land management and increase access and security of title to land by local investors and women. Establish a sound data base on vulnerability as a basis for planning and executing safety net measures and targeting humanitarian assistance to those in need.
Total Incremental Costs:
2004/5	2005/6	2006/7	Total
M10,826,650	M9,406,650	M8,995,057	M29,228,357
Key Implementing Agencies:
Ministry of Agriculture and Food Security Food Management Unit Food and Nutrition Coordinating Office Disaster Management Authority Private Sector Civil Society Organisations Ministry of Local Government
Comment:
Budget values for FMU, DMA and FNCO still await approval of budget.

View Table

Goal:
Number Two: AGRICULTURE AND FOOD SECURITY
Indicators	Baselines	Targets
• Crop production (tonnes)
Maize	130,934 in 1997/98 - 2001/02	140,000 in 2006
Wheat	26,065 in 1997/98 - 2001/02	30,000 in 2006
Sorghum	28,047 in 1997/98 - 2001/02	30,000 in 2006
• Crop yields/Hectare
Maize	0.781 in 1997/98 - 2001/02	0.9 in 2006
Wheat	1.174 in 1997/98 - 2001/02	1.3 in 2006
Sorghum	0.883 in 1997/98 - 2001/02	1.0 in 2006
• Area under irrigation (hectares)	80 in 2002/03	150 in 2006
• % of households with food insecurity	36% in 2002	32% in 2006
• Livestock: Formal exports of:
Wool (tonnes)	1,327 in 2000/01	1,650 in 2006
Mohair (tonnes)	262 in 2000/01	325 in 2006
Key Strategies and Activities for Implementation:
Adopt appropriate farming techniques and practices and support production of suitable crops properly adapted to local conditions. Develop irrigation infrastructure to support large scale irrigation for commercial farmers. Identify smallholder farmers and encourage them to use appropriate gravity fed techniques, water harvesting, water management and irrigation techniques to supplement rain fed agriculture. Train a pool of extension agents and decentralise them to area level. Ensure that inputs are available to farmers on time. Promote and develop support for better market linkages and processing in a sustainable manner. Improve livestock through rearing of high quality stock and increasing access to veterinary services and drugs. Legislate land reforms for effective land management and increase access and security of title to land by local investors and women. Establish a sound data base on vulnerability as a basis for planning and executing safety net measures and targeting humanitarian assistance to those in need.
Total Incremental Costs:
2004/5	2005/6	2006/7	Total
M10,826,650	M9,406,650	M8,995,057	M29,228,357
Key Implementing Agencies:
Ministry of Agriculture and Food Security Food Management Unit Food and Nutrition Coordinating Office Disaster Management Authority Private Sector Civil Society Organisations Ministry of Local Government
Comment:
Budget values for FMU, DMA and FNCO still await approval of budget.

The situation at Independence

At the time of Independence, Lesotho consisted primarily of villages connected only by gravel roads and bridle paths. Only a very small elite had their own vehicles; most people travelled on horse back or used the buses if they had to travel long distances. Mineworkers used the South African Railways to make the long journey to the mines, returning only once a year. Virtually all schools and clinics belonged to the churches. Telephones hardly reached beyond Maseru district and most institutions that needed electricity outside the capital had to generate their own. The vast majority of villages did not have piped water supplies and latrines were rare. The most common fuels were cow dung, shrubs and crop residues.

Considerable progress

Since Independence Lesotho has made enormous strides in developing its infrastructure. Despite the challenges posed by a difficult terrain, the country has been transformed by continuously expanding infrastructure of all kinds. The road network now covers a distance of 6035 km, of which 1205 km are paved. The rural roads network covers 3800 km, or over 60 percent of all roads. In areas where vehicle transport is not justifiable because of low population density, 109 foot bridges have been constructed. Rural water supply has made equally impressive strides, with approximately 62% of the population now able to access 30 litres per capita per day within 150 metres of their homes (a standard higher than that of many African countries).

In urban areas sophisticated systems supply water not only for domestic purposes but also for the fast growing industries. Electricity supplies have been extended through most parts of the Lowlands and now reach all district headquarters in the mountains. Much of this power is generated by the award-winning Lesotho Highlands Water Project that also exports water to South Africa. As for communications, within a five-year period the number of fixed telephone lines (21,000) has been exceeded by mobile phones (27,000). A brief analysis of key areas is given below.

Challenges ahead

While the Government takes great pride in what has been achieved much remains to be done. Two massive challenges loom that will have to be tackled head on if the gains of the past are to yield benefits for the poor. These are equally important but require very different approaches and strategies. First, relevant infrastructure - especially water -must be provided as fast as is feasibly possible to the new industrial estates of Butha-Buthe, Maputsoe, Teyateyaneng, Maseru (Ha Tikoe), Mafeteng and Mohale’s Hoek. If this is not achieved within a reasonable time, potential investors will turn their backs on Lesotho and tens of thousands of job opportunities will be lost. The second great challenge is to maintain the momentum of providing basic infrastructure to rural areas. As much of the lowlands now has access to the water and roads, the task will be to take the process forward into ever remoter regions. During consultations for the National Vision and Poverty Reduction Strategy, community members in the mountain districts expressed the concern that they had been forgotten by the government because very few developments occur in their areas, compared to those of their counterparts living in the lowland parts of the country. As services are extended to these areas, the Government is aware that the per capita/unit costs will increase dramatically. Nevertheless, on the basis that every Mosotho is entitled to basic services the process must go on.

6.1.1 Transport

The Lesotho Road Network map shows that most of the roads are concentrated in the Lowland portions of the districts of Butha-Buthe, Leribe, Berea, Maseru, Mafeteng and Mohale’s Hoek. Roads are relatively few in the Mountain districts of Thaba Tseka, Mokhotlong, Qacha’s Nek, and Quthing. Although there are arterial roads that connect all the districts in the country, few rural roads connect villages and towns within districts in the mountainous parts of the country, which comprise 75% of the total area of Lesotho, and in which about one quarter of the population lives.

Experience from the transport sector demonstrates that the provision of infrastructure can have both long and short-term impacts on poverty alleviation. The Department of Rural Roads already makes a significant contribution in this respect, as it employs between 7,000 and 8,000 labourers on a rotational basis in construction activities. Without sacrificing efficiency, the Government will strive to ensure that wherever possible labour-intensive methods are used. Contractors who are able to demonstrate that this can be done in a timely and cost effective manner will be favoured.

6.1.2 Water

Lesotho is blessed with relatively abundant water resources.³⁶ Since 1986 efforts have been focused on developing these for export through the Lesotho Highlands Water Project. This has brought many benefits to Lesotho, including a steady stream of royalties that reinforce the Government’s capacity to provide essential services. However, with Lesotho’s own need for water reaching levels that could not have been anticipated 30 years ago, Government is determined to direct efforts towards developing sources to supply the fast growing urban areas of the Lowlands. Another important change since the Highlands Water Treaty was signed is that Lesotho is now a signatory to various international conventions that it has obligations to fulfil.³⁷ Under these conventions, all future projects will have to be undertaken in consultation, particularly with those states that are members of the Orange River Basin Commission. Government will maintain a high profile in these fora to ensure that the country’s needs are well represented, as the future of tens of thousands of households depends on this.

The enormous importance of providing water to new industrial areas has already been stressed (see Section 4.2.2). Here it is worth reiterating the fundamental point that unless fast track solutions can be found to the lack of water there is a real risk that investors will seek alternatives to investing in Lesotho. Government, with the support of its development partners, is already earnestly seeking ways of providing water not only to these industries but also to the peri-urban areas where most of the workers and job-seekers are to be found.

Two closely related feasibility studies are underway that aim to address the shortage of water in the Lowlands. The Metolong Dam Feasibility Study focuses on provision of water to Maseru and surrounding areas by 2007. A more comprehensive study, the Lesotho Lowlands Water Supply Scheme Feasibility Study, is examining how best to supply all Lowland settlements with populations greater than 2,500 by 2010.

While evaluating the study results for a long term solution, the government will continue to extend water supply systems to communities that are poorly supplied in order to address present demand in a viable manner. This is particularly important from a gender point of view: in the community consultations, women consistently ranked lack of water higher than men.³⁸

6.1.3 Sanitation and Solid Waste

Inadequately treated sewage and trade wastes are the main sources of surface water pollution and are responsible for the introduction of toxic substances into the aquatic environment. Untreated sewage also contributes to increases in micro-organisms, such as bacteria, viruses and protozoa, which, particularly in urban areas, presents a threat to the health of the population. In Maseru, spillage from septic tanks and the high concentration of latrines may contaminate groundwater resources, upon which many poor households depend (through the use of hand pumps). Urban areas generate large amounts of solid waste and, as accessible dumpsites are filling up, it is becoming increasingly difficult and more expensive to dispose of. Poor management allows disease vectors to proliferate, with serious consequences for health.

6.1.4 Telecommunications and Mass Media

The Telecommunications Policy of 1999 drives developments in the Communications subsector by providing a framework for improving communications connectivity throughout the country. The objective of the policy is to facilitate the restructuring of the sector and provide guidance to the new law that has allocated responsibilities to various role players: the Ministry of Communications is responsible for policy formulation; the Lesotho Telecommunications Authority is responsible for regulating operations in the sector while service providers are responsible for service delivery.

Over the last few years privatisation has made a significant contribution to improving access but communications development is largely concentrated in Maseru and the lowland parts of the northern and southern regions of Lesotho. In mid-2001 mobile telephone subscribers totalled 27,000 with an average of 1.35 mobile phones for a population of one hundred people. Data for May 2002 shows there were 21,416 fixed telephone network connections, translating to one telephone line for a population of one hundred persons. Maseru accounts for 71% of the main telephone lines, leaving the other nine districts to share the remaining 29%. Moreover, public telephones are only found in urban areas confirming that telephone communication is very limited in the rural areas. The challenge ahead is to ensure, through proper regulation, that the operators do not neglect rural areas in their bid to maximise profits in the more commercially attractive urban areas.

Radio plays a key role in promoting various development initiatives. The broadcasting service covers about 75% of the country with the larger percentage in the urban areas. In the last decade Government has issued a number of radio licenses for private radio stations that have extended listeners’ choice considerably.

6.1.5 Energy

Lesotho is experiencing a considerable energy shortage. Almost 90% of energy consumption in the rural areas is sourced from indigenous biomass fuels consisting of shrubs, firewood, crop residues and animal waste. This has resulted in the depletion of reserves for woody plants and animal droppings that might have been used to enrich the soil. The consequences on the environment have been devastating, further perpetuating the poverty cycle. Electricity access was limited to about 10% of households in 2002 and most connections are found in the Lowlands. Paraffin is used for cooking, heating and lighting, but its access in the rural areas remains a problem mainly due to inaccessibility and high prices. Other fuels such as liquefied petroleum gas and coal play a minor role in rural areas. Finally, few rural households use Photovoltaic (PV) systems or diesel/petrol generators.

Data show that the poorer the household the more time spent per day collecting fuel. The wealthiest households spend an average of eight minutes a day collecting fuel, compared to more than two hours a day for the poorest. Women and children are most severely impacted as they are the ones responsible for collection. In some mountain areas, school children spend almost one day a week collecting fuel for the school kitchen, seriously impairing their education. Between 1993 and 1999 the percentage of households that depended on collected fuel rose from 55% to 66%.³⁹ In short, energy is both an environmental and a poverty issue - and one which the Government of Lesotho is determined to tackle.

6.1.6 Urban Settlements and Access to Housing

An assessment of the housing sector undertaken in 1998 revealed that, while people are generally successful in their efforts to provide some measure of shelter for their families, most of this housing is provided informally and constructed by the owner, financed by individual savings and, in urban areas, often constructed on illegally-held land without basic services. Formal sector institutions have failed to respond effectively to the needs of the informal sector and lower income households.

The vast majority of housing is owner-constructed and financed. In urban areas, and to some extent in rural areas, owners typically collect materials over time and eventually build the houses after all the building materials have been assembled. In this way, it normally takes a household a minimum of three years to put the building materials together before the actual construction of the house starts. Households tend to apply this strategy with unreliable or irregular incomes. In rare cases home builders are able to access limited credit. Even where credit exists, it is unaffordable to the majority of the people because of the stringent conditions imposed by commercial banks, including high interest rates and deposits of around 10% of the loan. The formal real estate market is poorly developed and private sector developers are discouraged from playing a role in housing provision because of difficulties experienced in obtaining land.

The significant shifts from rural to urban areas exert immense pressure on the limited infrastructure services and the acute shortage of housing has become a contentious issue in urban areas. More than 600,000 people (27% of the population) live in urban areas and growth points at present, with Maseru absorbing the largest share and growing at the rate of 7% per annum. Government is determined to ensure that the residents of the peri-urban areas, areas that are filling with new arrivals searching for work, are not neglected.

Thus, comprehensive infrastructure plans will be implemented to ensure that not only the factories but also the people who work in them are well catered for.

Government is particularly concerned about the supply of utilities in peri-urban areas. For utility companies to provide a cost-effective service, it is important that they should have reasonably easy access to people’s homes. The lack of settlement planning in urban areas prevents this. One reason for the ad hoc pattern of settlement is that acquiring land through proper legal channels is cumbersome and expensive, leaving the poor with little alternative other than to work through chiefs and field owners. This underlines the need for a co-ordinated approach to urban development involving Government agencies, local authorities, utility companies and private sector developers.

6.3.1 Improve Access to Roads and Transport

In many cases, infrastructure can only be put in place once roads make this possible. Under this objective, the following strategies will form the focus of the PRS implementation period:

• Provide a conducive legislative, policy and institutional framework. The transport sector is making considerable progress on policy formulation, including how best to assess and manage environmental impacts of transport infrastructure development. This process will be continued and strengthened through:

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    reviewing road legislation with a view to clarifying the responsibilities of all the institutions involved in road construction and maintenance;

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    reviewing transport policy, particularly with a view to attracting private transport operators to rural areas through licensing procedures and enhancing inspection of transporters to reduce accident rates.

• Increase road access. Within the transport sector, Government sees roads as being most critical in the struggle to alleviate poverty. However, only where it is considered absolutely necessary (based on socio-economic criteria) will paved trunk roads be constructed to connect major towns or areas of strategic importance. In the first year of the PRS implementation, Government will conduct studies (including EIA) to determine the costs of constructing paved roads in the highlands. Maintenance of all national trunk roads will continue throughout the period. Instead, particular priority will be given to rural roads which are constructed and maintained with community involvement, but according to set standards and procedures. For this reason Government will aim to:

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    construct, rehabilitate and maintain roads linking rural communities to basic services;

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    train local communities in road construction and maintenance to ensure sustainability of rural road infrastructure;

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    construct foot bridges and river crossings in the rural areas.

6.3.2 Access to Water

Over the next three years Government will increase its efforts to better serve both rural and urban areas through a variety of projects and local schemes. Implementation of ongoing and new projects will be done in a co-ordinated manner under the leadership of the new Commissioner of Water’s office. The key strategies and projects are mentioned below.

• Monitor, refine and formulate water policies and legislation. The sustainable provision of water for various purposes cannot take place without a supporting policy and legal environment. For this reason, in 1999, a Water Resources Management Policy was adopted by Government. While useful in many ways, some key areas that relate to water resource development are not adequately dealt with in the Policy. As these have important implications for access by the poor to water, this oversight will be addressed over the next three years. In particular, policies will be formulated that deal with resettlement, sanitation, water pricing, water resources development and water conservation (including recycling). This process will contribute to the drafting a new Water and Sanitation Act that is intended to bring the Water Resources Act of 1978 into line with international agreements and developments in the sector. Another important revision to the legislation will consist of amending the Water and Sewerage Authority Order of 1992 to support new policies. In addition, Government will amend the law to require an annual review of tariffs. To ensure that the poor are adequately protected, Government will maintain a stepped tariff structure whereby poorer consumers are subsidised by those who are better off. To ensure that various pieces of legislation are enforced, Government will increase the capacity of the Department of Water Affairs to regulate and enforce water sector legislation.

• Improve institutional capacity to assess and monitor water resources. With numerous water sector projects due to be implemented in the next few years it is important that the institutional capacity to manage critical data and inventories is developed and maintained. Government will seek additional support for key institutions, including the Office of the Commissioner of Water, Department of Water Affairs (DWA) and the Department of Rural Water Supply (DRWS). Concurrently, Government will conduct a feasibility study to determine if there are any advantages to be gained from separating water supply and distribution functions, particular in view of the recommendations of the Lowlands Water Supply Scheme Feasibility Study.

  • Improve water storage, delivery and distribution. The central strategy for the water sector is to improve storage, delivery and distribution. The key activities are:

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      complete the Lowlands Water Feasibility Study and proceed to detailed design;

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      complete the EIA and detailed design of Metolong Dam and proceed to construction;

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      augment Maseru Water Supply System by raising Maqalika dam wall and upgrade water treatment works;

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      carry out detailed design and start implementation of the Pilot Programme of Maseru Consensus Building for Peri-Urban Water Supply Project;

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      implement WASA’s Peri-Urban Water Project Phase II;

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      complete the detailed design and construction of the Six Towns Water Supply and Sanitation project;

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      complete the Feasibility Study of Five Towns Water Supply and Sanitation project and procure consultants for detailed design stage;

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      extend rural water supplies to unserved areas;

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      rehabilitate and expand existing rural water supply schemes in areas that will not be covered by the Lowlands Scheme;

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      maintain flexibility in standards and service levels according to communities’ demand for water and their ability to pay.

  • Improve water conservation and management. Preliminary results from the Lowlands Water Supply Scheme Feasibility Study indicated that water conservation measures - particularly the recycling of industrial water - could significantly reduce the need for expensive new infrastructure. Some factories in Maseru have already invested in their own recycling plants and have found that up to 80% of the water can be recycled, cutting their recurrent costs, while at the same time protecting the environment and pleasing their clients. If 50% of industrial water were to be recycled, the pressure on Maseru’s overstretched supply would be immediately reduced. Equally important is the need to identify the quantity and reasons for water loss (currently approximately 30%) and determine the best options to minimize losses. Both of these activities will be given high priority over the next three years.

• Strengthen community capacity to manage rural water schemes. Many rural water systems are not functioning at all or are not meeting DRWS standards. In pursuing the goal of universal coverage - including to communities in the remote mountains - Government will focus on rehabilitating and maintaining existing rural water systems through implementation of the DRWS 5-year plan that encourages community ownership and management of completed water systems and outsourcing of work to private contractors and NGOs.

6.3.3 Access to Sanitation

• Improve water-borne sewerage systems in Maseru. Efforts will be made to expand the water-borne sewerage system and to up-grade the associated treatment works. Concurrently, the Government will re-examine mechanisms to assist poor households to up-grade their dry sanitation systems (latrines) to ensure that these provide adequate protection against disease and do not present a risk to ground water. Government will ensure the provision of public toilets, especially at key public transport nodes and markets.

6.3.4 Access to Telecommunications and Mass Media

• Develop a Universal Access Policy. The Universal Access Policy will ensure that these poorer parts of the country are provided with the necessary services wherever possible. Highest priority will be given to places where development is being targeted under other components of the PRS (e.g. rural police stations). Numerous studies have shown that radio is a particularly effective way of reaching poor households with critical information regarding projects, public health, education and employment. For this reason, over the next three years, Government will expand its public broadcast transmitters to cover 90% of the country (from 75%).

6.3.5 Access to Energy

As the vast majority of the poor use - and will continue to use - biomass as their primary fuel, the Government will increase the resources allocated to forestry, particularly to the expansion of private and public woodlots (this is discussed in more detail in Chapter 10). Further, to ensure that children are not deprived of part of their education because of the fuel needs of school kitchens the Government will conduct a feasibility study to determine how best to convert these to less demanding systems (see Chapter 9). This section focuses on Government plans to improve access in rural areas to modern fuels that are less demanding from both an environmental and social perspective.

• Develop and implement a National Rural Electrification Programme. Electricity is vital for the growth of businesses, the development of institutions and the well-being of families. For this reason it is essential that Government plays a role in ensuring that electricity is spread as extensively as possible. The Lesotho Electricity Corporation (LEC) is the sole organisation with responsibility for this task.⁴⁰ In order to ensure that it meets the huge challenges that lie ahead, the following key activities will take place in the next three years:

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    develop a Rural Electrification Master Plan;

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    identify economically productive/business centres in the rural areas for early electrification;

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    implement the access to electricity pilot projects and projects emanating from the Rural Electrification Master Plan;

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    establish the National Rural Electrification Fund (NREF) and mobilise funding to subsidise the costs of rural electrification projects;

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    reduce the existing backlog of applicants;

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    develop service delivery models and financing mechanisms for renewable energy technologies.

• Introduce appropriate reform measures, develop institutional capacities and responsibilities for electrification, and energy service delivery in rural areas. None of the very ambitious service delivery tasks listed above can be accomplished without a solid institutional base. For this reason, over the next three years, the Government will implement the following specific tasks:

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    establish the Lesotho Electricity Authority;

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    establish a Rural Electrification Unit/Agency to facilitate, co-ordinate and manage rural electrification projects;

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    complete the privatisation of LEC;

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    complete the financial restructuring of ‘Muela Hydropower Plant;

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    develop a training plan for capacity building of electricity institutions and their stakeholders;

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    study the potential social impacts of sector reform (including tariff adjustments) and determine the most effective measures to include the poor in new programmes and protect them from adverse adjustments.

• Improve the availability of commercial fuels in rural areas. The private sector supplies commercial fuels to most parts of the country but some areas are poorly served. Government will review the instruments at its disposal to assess how best to ensure that the private sector does not neglect poor areas. The Government policy will be to promote use of renewable energy for sustainable development.

6.3.6 Ensure planned settlement of peri-urban areas and affordable access to housing

In anticipation of the continuous growth of peri-urban areas, Government will carry out the following over the next three years:

• Ensure adequate provision for the land tenure needs of peri-urban areas

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    streamline land application and allocation procedures and make land more accessible to the poor;

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    ensure that the Local Government Act and the Land Act are in harmony;

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    train the new structures that will be responsible for land allocation under the new Land Act;

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    monitor implementation.

• Improve planning of settlements

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    review, up-date and implement the National Settlement and Shelter Policies in line with the legislation described above;

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    establish a National Housing Authority and ease access to land for private sector housing development;

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    review and/or establish regional, town and village plans that are community-based with a view to pro-poor interventions that can be implemented within three year plans (including proper public access to parks, transport terminals, community centres, grave yards, waste disposal sites, etc).⁴¹

NB: TBD is To Be Determined.

Goal:
Number Three: Infrastructure Development
Indicators	Baselines	Targets
• Kilometres of gravel roads constructed and maintained	6800 in 2002	TBD
• % of households with access to improved water resources	78.9 in 2002	TBD
• % of households with improved sanitation	47.4 in 2002	TBD
• % of households with access to electricity	10% in 2002	17% by 2006
• No. of people with access to telephone services	233,715	250,000 by 2006
Key Strategies and Activities for Implementation:
Provide a conducive legislative, policy and institutional framework for the development of the sector. Construct, rehabilitate and maintain roads and river crossings for enhance access to basic services. Improve institutional capacity and set up a data base to assess and monitor water resources. Improve water harnessing, storage, delivery and distribution in accordance with the recommendations of the Lesotho Lowlands Water Supply Scheme Feasibility Study. Construct and rehabilitate rural water supply areas that will not be covered by the lowlands scheme. Promote and implement water conservation and management techniques at industrial and community levels. Introduce appropriate reforms into the power sector and develop institutional capacities for efficient electrification and energy service delivery. Expand rural electrification to both households and economically productive/ business centres in the rural areas. Improve access to information and communication technology for connectivity to basic services.
Total Incremental Costs:
2004/5	2005/6	2006/7	Total
M586,489,292	M505,303,920	M454,640,622	M1,546,433,834
Key Implementing Agencies:
Public Works and Transport Natural Resources Trade, Industry, Cooperatives and Marketing Tourism, Environment and Culture Health and Social Welfare Local Government Private Sector Civil Society Organisations
Comment:

NB: TBD is To Be Determined.

View Table

Goal:
Number Three: Infrastructure Development
Indicators	Baselines	Targets
• Kilometres of gravel roads constructed and maintained	6800 in 2002	TBD
• % of households with access to improved water resources	78.9 in 2002	TBD
• % of households with improved sanitation	47.4 in 2002	TBD
• % of households with access to electricity	10% in 2002	17% by 2006
• No. of people with access to telephone services	233,715	250,000 by 2006
Key Strategies and Activities for Implementation:
Provide a conducive legislative, policy and institutional framework for the development of the sector. Construct, rehabilitate and maintain roads and river crossings for enhance access to basic services. Improve institutional capacity and set up a data base to assess and monitor water resources. Improve water harnessing, storage, delivery and distribution in accordance with the recommendations of the Lesotho Lowlands Water Supply Scheme Feasibility Study. Construct and rehabilitate rural water supply areas that will not be covered by the lowlands scheme. Promote and implement water conservation and management techniques at industrial and community levels. Introduce appropriate reforms into the power sector and develop institutional capacities for efficient electrification and energy service delivery. Expand rural electrification to both households and economically productive/ business centres in the rural areas. Improve access to information and communication technology for connectivity to basic services.
Total Incremental Costs:
2004/5	2005/6	2006/7	Total
M586,489,292	M505,303,920	M454,640,622	M1,546,433,834
Key Implementing Agencies:
Public Works and Transport Natural Resources Trade, Industry, Cooperatives and Marketing Tourism, Environment and Culture Health and Social Welfare Local Government Private Sector Civil Society Organisations
Comment:

NB: TBD is To Be Determined.

Lesotho’s heritage gives clear guidance

Lesotho’s very existence can be traced back to the extraordinary achievements of King Moshoeshoe I who overcame great adversity through his consultative, inclusive and diplomatic approach to governance. Under his leadership, refugees, war victims, widows and the poor were given a place in society and an opportunity to rebuild their lives in security. The community consultations clearly spelt out the appeal from ordinary Basotho: they seek the same fundamental rights as those who lived at the time of Moshoeshoe I, being peace, participation and security. The Government of Lesotho sees this as the most fundamental long-term challenge facing the country. Good governance is a pre-condition for poverty eradication, and its pillars are democracy, transparency, accountability and protection for all. It must pro-actively promote people’s participation in decision making and resource allocation, while protecting them from arbitrary, uncontrolled actions by governments, multinationals and other forces.

But the last 40 years have not produced consensus among the political elite

Lesotho held its first democratic elections in 1965, under a borrowed Westminster model based on multi-party democracy. Democracy was readily accepted. Political participation was not a new phenomenon as the obligation of the political leadership to consult the people. This was a norm entrenched in the system of governance in the pre-colonial era. Basotho culture suggests that ultimate power lies with the people. However, this noble tradition was seriously undermined by the political elite in the post-independence period. The state apparatus became highly partisan and politicised. State power also became highly centralised and the state security apparatus grew increasingly influential. Over the years Lesotho’s democracy has been fragile, undermined by a refusal to accept election outcomes, the suspension of constitutional rule and rampant abuse of human rights.

The Westminster system was a flawed model for Lesotho

The determination of ordinary people to participate and vote for a government of their choice has been demonstrated in 1993, 1998 and 2002, when Basotho went to the polls to choose a government that they thought would serve their interests best. While the people’s commitment to democracy is unquestionable, experience in the 1990s revealed that the electoral model was itself inappropriate. Lesotho had been using the first past the post electoral model (FPTP), which did not translate the national vote into a proportionate share of seats in the National Assembly. Losing political parties felt cheated by being left out of parliament although substantial numbers of supporters voted for them. In 1998 the protests about the election results by an alliance of opposition parties culminated in mass destruction of businesses and public property, anarchy and lawlessness. GDP fell by 4.6 percent in real terms and many hundreds of people were left jobless; national resources, which could have been used for development, were diverted to reconstruction; and potential investors were scared away, thus increasing levels of poverty.

A more inclusive system has recently been established

Out of the ashes of destruction rose a collective determination to transform the very nature of Lesotho’s democratic system, making it more inclusive than the Westminster model. In 1998, political leaders established the Interim Political Authority (IPA). Through the IPA the ruling party and opposition parties reached consensus on adopting an electoral system that combines FPTP and proportional representation (PR) in order to ensure that the national vote approximates the proportion of seats that each party receives in the National Assembly. Thus, Lesotho employed a mixed member proportional (MMP) system in its 2002 elections. These have been hailed as an example of what can be achieved through negotiation and reforms agreed upon by consensus. The 2002 elections, declared free and fair by observers, have set the country on a new course which holds the promise of stability and progress, while reinstating the fundamental principles of governance.

Consolidating democracy remains a large challenge

The successful conduct of the elections is only a start to consolidating Lesotho’s fragile democracy. Much remains to be done. The institutions specialising in conflict management and resolution are still relatively weak. There is also a general lack of trust and confidence in the capacity and political neutrality of the law enforcement agencies mandated to investigate crime, enforce the law and protect the Constitution. Furthermore, there is a lack of cohesion and coherence regarding the national policies aimed at consolidating democracy, particularly at local level. Links between the electorate and Members of Parliament are generally weak, due to poor accountability. Parliament lacks portfolio committees that should facilitate the production of quality legislation, as well as control and monitor the executive arm of government. These impair the efficiency and effectiveness of Parliament.

Decentralisation is a key area to be implemented

The Government of Lesotho is committed to ensuring the participation of Basotho in the development process. In this regard, the Ministry of Local Government is working towards preparing communities for responsible and mature participation in local government structures that will be more effective in reaching the poor. The Local Government Act was passed in 1997 and elections for the new local government structures are planned to take place in 2004/05. The policy framework to facilitate implementation of local government is in place. The process of determining the financial feasibility of decentralisation is underway. This involves clarification of the functions, roles and responsibilities of different local authority role players, as well as of the administrative arrangements and the relations between the central government and local government.

Corruption

The community consultations show that there is a widespread perception that “government is the milk cow of the well placed”. This view is so widespread that it will take concerted efforts by the highest offices in the land to reverse. Ordinary people are concerned about the apparent ability of powerful individuals to alter the course of justice, to misuse the resources of the state for personal advantage, or to accept bribes and kickbacks. They claimed that this has become an increasingly disturbing phenomenon in Lesotho. Whether through lack of transparency in tendering processes, the breakdown of accounting and auditing functions in Government ministries, or the simple misuse of Government property, they say the signs are clear. The Government is committed to developing a new ethic of service that is not based upon personal connections. It will ensure that this is enforced through new mechanisms of reward and promotion, resulting in an improvement in the delivery of services to the poor.

Human Rights

The Constitution of Lesotho (Chapter II) specifies the civil and political rights that can be contested and enforced through the courts of law. Institutions of protection, such as the courts and the Ombudsman, have been established to give practical effect to these rights. However, there are several social, cultural and economic rights (Chapter III) which cannot be contested or enforced by the courts, but are promoted through the policies of the state. Government’s commitment to ensuring access to these rights is, however, limited by the availability of resources.⁴²

Lesotho has a high incidence of crime, including offences such as murder, robbery, stock theft, theft, rape, fraud and assault with intent to do grievous bodily harm. Perpetrators of crime have legal rights as the Constitution states that: “Every person shall be entitled to equality before the law and to the equal protection of the law.” Section 12 and its subsections provide suspects charged with criminal offences with substantive rights at every stage of the proceedings. A suspect has the right to be presumed innocent until the court has found him guilty. Prior to judgement, the suspect has the right to bail (subject to the presiding officer’s discretion), the right to defend his case through a legal representative of his choice (sometimes provided by the state through Legal Aid or pro-deo) and has the right to be assisted with an interpreter if necessary.

By contrast there are no substantive and procedural provisions in the Constitution protecting the rights of the victims. This disparity defeats the spirit of the equality clause in Section 19 of the Constitution. The legal process, while aimed at securing a conviction, fails to adequately address the interests of the victim. The victim does not have the right to make a statement prior to sentencing in order to provide the court with an assessment of the impact that the criminal conduct has had. A victim may appear in court as a witness but, if they are not required to actually assist in securing a conviction they may not always be informed of the proceedings. Where medical treatment and counselling is needed by a victim, it is at the victim’s expense. Medical costs that are part of the prosecution evidence are also at the victim’s cost. The Criminal Procedure and Evidence Act, 1981, sets an extremely low level for compensation (maximum of M400) obtainable through civil proceedings. This amount is inadequate to compensate victims of crimes who have suffered serious damage.

Justice, safety and security require more concerted effort

Consultation has shown that communities throughout the country gave high priority to improving all aspects of the justice system. Their main concerns are:

• Slow prosecutions. The police are experiencing serious problems and cannot respond promptly to crimes. They take too long to investigate thoroughly and consequently there is a delay in handing dockets over to the Prosecution. There are huge backlogs and suspects have to remain in custody for a long time before they start serving the actual prison term or are acquitted. This worsens the prison overcrowding situation. Many of the suspects lose their means of livelihood and are more likely to turn to crime. Thus families are negatively affected psychologically, economically and socially. Prisons are costly to maintain, eating up resources that would better be spent on the poor.

• The impact of inefficient courts on livelihoods. The High Court lacks administration skills for proper management. Preparation of the case roll is uncoordinated and inefficient, as it is not recognised as a central function. The lower courts are understaffed, under-resourced and inadequate in number. They have no facilities for safe storage of exhibits and consequently valuable evidence gets lost. There is no modern case tracking mechanism and cases drag on for years. Quite often, witnesses, victims, perpetrators and their relatives have to attend court over lengthy periods of time, interfering with their productivity. People want speedy delivery of justice and, if they have to wait too long for that to happen, they lose confidence in the justice system. Quite often they take the law into their own hands. This has led to the emergence of feuds, killings and destruction of property leaving countless families in absolute poverty.

• Consequences of overcrowding. There is a serious problem of overcrowding, with prisons holding twice the number of prisoners they were designed for. This severely hampers all rehabilitation efforts as overcrowded prisons become breeding places for hardened criminals, who increase the rate of crime on their release.

• Poor protection of vulnerable groups. Despite the advances made by the justice sector through the introduction of new legislation and the incorporation of international and regional conventions into Lesotho law, the justice system is plagued with problems that hinder the achievement of its main goal, which is the reduction and control of crime. An increasing number of children are getting into conflict with the law.⁴³ Legal aid for the poor is limited and exists only in Maseru where it is out of reach for many. There is no policy regarding decentralisation and no proposed legislation for this department. There is no policy in relation to restorative justice and no legislation in the pipeline. There are particular concerns regarding the lack of automatic legal protection for vulnerable groups. These include women (who do not have equal status before the law), people with disabilities (who have problems of access), children (especially the inheritance rights of orphans) and people living with HIV and AIDS (notably regarding their rights to employment tenure). There is no specific policy on the aged and disabled or any specific legislation pertaining to their protection. Although there is a policy on HIV and AIDS, there is no corresponding legislation.

7.3.1 Deepening Democracy

To achieve the goal of deepening democracy four basic strategies have been devised. These aim to:

• Promote national unity as a pre-condition for socio-economic development. The events leading up to 22 September 1998 underlined, for every Mosotho, the need to establish some degree of national unity, while at the same time accepting and even developing diversity of views and cultures. This intention is well captured in the Sesotho expression “Kaofela re chabana sa khomo”, which literally means “we are all people of the cow” but more accurately conveys a sense of striving for unity in diversity. Without this unity, the country will always have to live with the risk that peace will be sacrificed for dubious political gains. To promote unity Government will:

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    support campaigns that clearly foster a love for the country and which promote unity in all things that are good for the nation;

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    strengthen the formal conflict management structures of the state and civil society to enable the speedy resolution of disputes at various levels.

• Establish Civic Education programmes. The community consultations show that some people remain sceptical about the benefits democracy can bring and do not fully understand the new electoral system or even the provisions in the Constitution that protect their rights. For the poor, who are often at the margins of political decision making, this is unfortunate. Therefore the following activities will be undertaken:

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    support NGOs with a capacity to carry out training on human rights;

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    sensitise the public through media campaigns on constitutional rights;

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    consolidate the teaching/curriculum in schools with regard to civic education.

• Devise mechanisms for feedback and public monitoring. At the start of the PRS implementation, a campaign will be launched to provide vulnerable and marginalised households with an understanding of how Government plans to reach them through PRS activities. The campaign will also show how they can make the best of opportunities provided by the PRS process and how they can become involved in monitoring progress. Where possible, this will be followed up and re-enforced through local government structures and NGOs.

• Maintain capacity of the Independent Electoral Commission. The IEC has played a strategic role in restoring public confidence in democracy. Government will ensure that this confidence is maintained by providing all the necessary resources, particularly those required for local elections which will be held during the PRS implementation period.

7.3.2 Improve National Governance

Under the objective of improving national governance two strategies have been drawn up:

• Improve legislative efficiency of Parliament. This is essential if the poverty-eradicating measures proposed as part of the PRS are to be given proper legal support. Measures to be carried out in the next three years include:

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    strengthen the role of Parliament and reform its procedures and processes

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    establish standing portfolio committees;⁴⁴

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    train standing committee members on the various issues they are tackling to improve their efficiency and effectiveness;

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    assist the Law Office (Legal Drafting Section) and the various ministries to speed up the preparation of draft legislation;

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    review procedures for enacting legislation to accelerate the process and train personnel on speedy passing of legislation.

• Strengthen Directorate of Corruption and Economic Offences (DCEO). People have expressed deep concerns about accountability. An unfortunately widespread belief prevails that Government officials are corrupt and are “eating” public goods while in power instead of ensuring that these reach the people they are intended for. Over the next three years Government will demonstrate its commitment to tackling corruption in concrete ways, notably by:

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    reviewing the legal instruments for effectively combating corruption;

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    increasing the numbers and training of anti-corruption personnel;

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    holding public forums on corruption and developing corruption alert mechanisms;

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    intensifying implementation of anti-corruption mechanisms and laws;

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    training the police and other service providers to enhance their professional conduct and improve service delivery;

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    ensuring that accounting, auditing and tendering processes within government are strengthened.

7.3.3 Improve Local Governance

Under the objective of improving local governance the following key strategies will be deployed:

• Create and strengthen structures for public participation in governance. Although legislation for decentralisation exists, there is no policy to guide implementation. Government will move rapidly, in the first year of the PRS period, to develop a clear and widely accepted policy on decentralisation, the key elements of which will be devolution, local political and administrative control, freedom from centralised constraints and improvement of financial systems. Particular activities will include:

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    developing guiding principles to set clear rules and regulations for the distribution of powers between modern and traditional leadership;

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    decentralising the current labour dispute resolution and prevention mechanisms to the districts, to improve dispute prevention and settlement at source;

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    training district planning units and local authorities’ staff;

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    identifying infrastructural needs of the local communities and developing suitable implementation plans.

• Establish financial structures and build capacity for decentralisation. Local Government will only be able to reach the poor if it has direct access to real resources (in the past Village Development Councils had very few resources). Hence the feasibility of different financing options, including commissions and development funds, are being explored with a view to finding the most viable.

7.3.4 Strengthen Human Rights

Under the objective of strengthening human rights, the Government will:

• Develop guidelines to ensure an appropriate balance between the respective rights of criminal suspects and of the victims of crime. This strategy will be achieved through the following particular activities:

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    reviewing relevant sections of the Constitution and existing legislation in order to determine appropriate amendments to give practical effect to the guidelines;

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    undertaking advocacy programmes to inculcate a culture of respect for the rights of victims of crime, abuse of power and violations of human rights;

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    providing medical treatment, counselling, support and care to the victims of crime such as rape and attempted murder.

7.3.5 Increase Safety and Security

Under the objective of increasing safety and security, Government will urgently address the constraints discussed in the Situation Analysis of this Chapter through:

• Strengthening crime prevention and reducing the existing high crime rate. Given the impact on poverty and the importance placed on security by communities all over Lesotho, this over-arching strategy will be given high priority by Government. Although the aims are long-term, Government will undertake specific, measurable activities to ensure progress and momentum. These include:

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    reforming and restructuring management of security institutions and expanding community policing, equipped with communication facilities.

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    creating specialised high level response units for riot control and the protection of women and children;

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    identifying strategic locations that require police stations and providing appropriate facilities;

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    improving facilities at existing police stations;

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    expanding livestock registration and marking to curb the high rate of livestock theft;

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    reducing cross border crime through sensitising communities along both sides of the border about cross-border crime and stock theft;

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    enhancing the capacity of Lesotho Defence Force to partner with other stakeholders in fighting crime, responding to disasters, training youth and supporting other community development initiatives.

7.3.6 Improve Efficiency of the Justice System

Finally, under the objective of improving efficiency of the justice system three key strategies have been drawn up:

• Improve case management. This is essential to maintain human rights and promote confidence in the justice system. Specific actions to be implemented during the first PRS period include:

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    develop case management policy and implement the Speedy Court Trials Act 2002;

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    train police on proper compilation of dockets and effective transfer of dockets to the prosecution office;

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    improve existing registers for movement of dockets and establish complaint mechanisms to deal with unsatisfactory cases;

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    develop an effective case tracking system that is transparent;

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    maintain staff motivation and curb turnover by improving working conditions.

• Improve operational efficiency of the commercial court.

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    Separate the administrative functions of the commercial court from the high court.

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    Train the judiciary - lawyers and judges - on handling commercial cases for successful operation of the commercial court.

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    Speed up commercial cases e.g. non-repayment of loans in commercial court.

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    Establish a small claims court.

• Improve access to justice by vulnerable groups. Government is concerned that poor and vulnerable groups have difficulty accessing the legal system and are not afforded adequate protection. High priority will be given to the following activities:

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    revise the current Legal Aid Act;

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    increase trained personnel within the Legal Aid Office and explore the possibility of opening offices in the districts;

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    draft legislation to provide legal protection to vulnerable groups including persons with disabilities, children, and people living with HIV and AIDS;

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    establish child, juvenile and family courts with child-friendly environments;

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    sensitise the community on the rights of vulnerable groups.

• Establish a restorative justice and rehabilitation system. The emphasis of a pro-poor system should not be on punishment but on compensating victims for their losses and on ensuring the offenders’ rehabilitation and return to society armed with skills and an understanding of what they can contribute. This requires radical reforms that will take many years. Over the next three years, Government will ensure that a start is made by undertaking the following activities:

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    establish an inclusive task force to define restorative justice;

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    orientate and train legal practitioners and other stakeholders for effective implementation of the restorative justice system;

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    reconstruct and improve the central prison, and construct two more open camp prisons;

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    train inmates to provide them with functional literacy and numeracy, as well as vocational skills;

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    implement post-sentence alternative measures to custody and release eligible inmates on parole where possible;

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    set up community based structures for restorative justice.

Goal:
Number Four: Deepening Democracy, Governance, Safety and Security
Indicators	Baselines	Targets
• Rate of livestock theft	17.7 cases per 10,000 inhabitants in 2003	2.3 cases per 10,000 inhabitants in 2006
• Crime rate	72.7 cases per 10,000 inhabitants in 2003	36.4 cases per 10,000 inhabitants in 2006
• Local Authorities established & functional	4% in 2003	100% in 2006
• Reported cases of corruption	300 cases in 2003	200 cases in 2006
Key Strategies and Activities for implementation:
Built the capacity of governance institutions; Strengthen the role of Parliament and reform its procedures and processes Reform and strengthen safety and security institutions at all levels.. Develop decentralisation policy and guiding principles. Set up local government structures and provide them with basic resources and training. Reform the judiciary systems to be more independent and transparent. Improve case management through training and development of a policy and an effective case tracking system. Set up community structures for restorative justice and settlement of minor community disputes. Develop guidelines to ensure an appropriate balance between the respective rights of criminal suspects and the victims of crime; Review relevant sections of the Constitution and existing legislation in order to determine appropriate amendments to give practical effect to the guidelines; Undertake advocacy programmes to inculcate a culture of respect for the rights of victims of crime, abuse of power and violations of human rights Provide medical treatment, counselling, support and care to the victims of crime such as rape and attempted murder.
Total Incremental Costs:
2004/5	2005/6	2006/7	Total
M19,811,552	M3,361,014	M59,743,543	M113,174,109
Key Implementing Agencies:
Justice, Human Rights and Rehabilitation Ministry of Home Affairs Law and Constitutional Affairs Independent Electoral Commission Defence and National Security Private Sector Civil Society Organisations Communities Ministry of Local Government
Comment:

View Table

Goal:
Number Four: Deepening Democracy, Governance, Safety and Security
Indicators	Baselines	Targets
• Rate of livestock theft	17.7 cases per 10,000 inhabitants in 2003	2.3 cases per 10,000 inhabitants in 2006
• Crime rate	72.7 cases per 10,000 inhabitants in 2003	36.4 cases per 10,000 inhabitants in 2006
• Local Authorities established & functional	4% in 2003	100% in 2006
• Reported cases of corruption	300 cases in 2003	200 cases in 2006
Key Strategies and Activities for implementation:
Built the capacity of governance institutions; Strengthen the role of Parliament and reform its procedures and processes Reform and strengthen safety and security institutions at all levels.. Develop decentralisation policy and guiding principles. Set up local government structures and provide them with basic resources and training. Reform the judiciary systems to be more independent and transparent. Improve case management through training and development of a policy and an effective case tracking system. Set up community structures for restorative justice and settlement of minor community disputes. Develop guidelines to ensure an appropriate balance between the respective rights of criminal suspects and the victims of crime; Review relevant sections of the Constitution and existing legislation in order to determine appropriate amendments to give practical effect to the guidelines; Undertake advocacy programmes to inculcate a culture of respect for the rights of victims of crime, abuse of power and violations of human rights Provide medical treatment, counselling, support and care to the victims of crime such as rape and attempted murder.
Total Incremental Costs:
2004/5	2005/6	2006/7	Total
M19,811,552	M3,361,014	M59,743,543	M113,174,109
Key Implementing Agencies:
Justice, Human Rights and Rehabilitation Ministry of Home Affairs Law and Constitutional Affairs Independent Electoral Commission Defence and National Security Private Sector Civil Society Organisations Communities Ministry of Local Government
Comment:

Concerted Efforts in Primary Health Care

Lesotho has made substantial efforts to provide affordable and accessible Primary Health Care (PHC) to the poor.⁴⁵ In the late 1970s Government and church health providers developed a decentralised system with designated health service areas (HSAs), each with its own hospital, clinics, village health posts, village health workers and traditional birth attendants.⁴⁶ Over the years, Government has sought to strengthen this system by emphasising broad-based PHC as the principal means of dealing with preventable infectious diseases that are the primary cause of serious illness and death among the poor.

The Ministry of Health and Social Welfare (MOHSW) has given high priority to interventions that reach some of the most vulnerable individuals in society, notably: family planning, ante and postnatal care, mother and child health, immunisation campaigns and nutrition interventions targeting under-fives. Unlike many African countries, whose health services were disrupted by war, Lesotho has been able to maintain vital immunisation services and has virtually no polio victims. Treatment for tuberculosis, which impacts the poor more than the better-off, is provided free of charge. Under a cost-sharing scheme consultations and medication are obtained for M10 (about $ 1.50) at Government health centres.

Progress … and then decline

By and large, the PHC approach described above was successful: life expectancy grew from 40 years in the 1970s to 59 years in the 1990s while infant mortality declined from 122 per 1000 live births to 74. Family planning measures also showed real signs of progress with a decline in the Total Fertility Rate from 5.3 to 4.9. Sadly these gains have since been reversed, as shown in Table 8.1.

Table 8.1:

The performance trend for selected indicators of quality of life

Source: BOS - Demographic Survey 2001

Table 8.1:

The performance trend for selected indicators of quality of life

Indicator	1970s	1980s	1990s	2000s
Life Expectancy at birth (years)	40	54	59	54
Infant Mortality (per 1000 live births)	122	84	74	80
Child Mortality (per 1000 children surviving to 1 yr)	-	34	34	38
Total Fertility rate (children per woman)	-	5.3	4.9	4.3
Maternal Mortality (per 100,000 live births)	-	282	282	419

Source: BOS - Demographic Survey 2001

View Table

Table 8.1:

The performance trend for selected indicators of quality of life

Indicator	1970s	1980s	1990s	2000s
Life Expectancy at birth (years)	40	54	59	54
Infant Mortality (per 1000 live births)	122	84	74	80
Child Mortality (per 1000 children surviving to 1 yr)	-	34	34	38
Total Fertility rate (children per woman)	-	5.3	4.9	4.3
Maternal Mortality (per 100,000 live births)	-	282	282	419

Source: BOS - Demographic Survey 2001

Total engagement required

These declines are due to the emergence of new diseases, increasing poverty and disease resistance to drugs. The health system has not been able to address the devastating effects of HIV and AIDS resulting in the resurgence of diseases like tuberculosis, sexually transmitted and other communicable diseases. It is estimated that 30% of the population aged 15–49 years are reported to be HIV positive, resulting in the deaths of 70 persons per day. Consequently, the demand for curative services has increased dramatically, beyond the capacity of existing health services to respond. The consequences of the HIV and AIDS pandemic are massive and cut across all sectors. While the MOHSW may be most directly responsible for assisting those afflicted, all sectors must actively engage in the struggle. In this sense Lesotho is on a war-footing; unless the entire society is mobilised to fight the disease all efforts to combat poverty will be in vain. For this reason Government has ranked dealing with HIV and AIDS as a special priority area (see Chapter 12). In this chapter, therefore, other health priorities are described.

Increasing malnutrition

The onset of the HIV and AIDS pandemic has exacerbated the high levels of malnutrition prevalent in many parts of the country. In 1996 the Government noted in its report Pathway Out of Poverty that:

“Malnutrition levels among children under five are unacceptably high everywhere, but urban children are considerably better off than the children in mountain areas”.⁴⁷

Between 1993 and 1999 the percentage of children below standard weight for age increased from 13% to 16%, while those below standard height for age remained at an “unacceptable” 46%.⁴⁸ As noted earlier, by 2000 the Multiple Indicator Cluster Survey (MICS) showed similar results, with a slight increase to 17.8% for low weight for age while low height for age was effectively the same (45.4%).

Chronic malnutrition and chronic infections (acute respiratory infections and diarrhoea) are inversely related to the level of income, water and sanitation. There is also a significant relationship between the mother’s education and nutritional status, particularly regarding stunting and weight loss. For this reason malnutrition requires a multi-sectoral response, as discussed later in this Chapter.

Other contributing factors and their implications

While HIV and AIDS is a key cause for the deterioration of the nation’s health status - and probably the main reason for health systems being overstretched - there are many other factors that are of concern to Government. These include: a poorly-functioning health system with a huge imbalance between over-crowded Government health centres with highly subsidised fees and CHAL health centres where fuller fees are paid; the high cost of medical care to all providers and users; long distances to medical facilities; and the insufficient numbers of health personnel especially in rural areas. Further, there is only one referral hospital (Queen Elizabeth II) where most specialists are concentrated, which also functions as Maseru district hospital. This makes this key facility very congested and difficult for people to use. While the highly subsidised fees (also known as ‘cost sharing’) have improved access, the imbalance between Government and CHAL fees has resulted in overcrowding of Government health centres.

Orphans

The increasing levels of poverty described earlier, particularly when related to retrenchment, disability, and HIV and AIDS, have increased the number of very vulnerable households, particularly those caring for orphans. In 2001, the Department of Social Welfare conducted a survey, which estimated that the number of orphans is over 85,000 while UNICEF estimated it to be over 117,000, from AIDS alone. The inconsistencies in the figures - possibly due to different definitions of orphans - points to the difficulties entailed in determining the exact extent of vulnerability. However, there is strong consensus that there is a large and growing orphan population that poses major challenges for the Department of Social Welfare and other stakeholders.

8.3.1 Improve Access to Quality Health Care

Given Lesotho’s concerted efforts in Primary Health Care, which resulted in the gains made in the 1970s and 1980s, the Government is determined to reinstate the country’s reputation as one capable of delivering quality curative and preventive health care down to village level. In view of the HIV and AIDS epidemic this will require renewed dedication and vigour, which should be recognised and rewarded as far as possible. A comprehensive approach will be taken, starting with the clarification of key issues through the review and renewal of policies:

• Establish a Sustainable Health Care Financing System

  The Health and Social Welfare Policy and Strategic Plan, recently developed, will reinforce the on-going poverty focused activities. This will include programmes that affect health and social welfare priorities, which will ensure adaptation to external and internal changes and will harmonise all interventions currently being undertaken. The policy and the strategic plan will provide guidance for the development of medium term and annual operational plans. In order to address the cost problem, the MOHSW will generate and mobilise funds for Health and Social Welfare and ensure that funds are allocated according to agreed priorities. The Government will aim to finance the Essential Health Package from national revenue, external aid and from subsidised user fees. Private funding through cost recovery user fees, health insurance and community based financing will be encouraged. To improve access to health services, criteria for exemption from user fees will be developed, based on ability to pay and nature of diseases (e.g. diseases that are infectious and require lengthy treatment, such as tuberculosis and mental health). User fees will be equal between GOL and CHAL facilities to improve equity in access to services, and the shortfall in revenue of CHAL facilities as a result of user fee equalisation policy will be compensated by the Government.

• Improve health infrastructure, equipment, maintenance and supplies. The efforts to improve and maintain health facilities will be accelerated over the next three years. Specific activities will include:

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    rationalising health service facilities with construction or renovation;

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    improving the procurement, storage, distribution and maintenance of equipment, drugs and dressings.

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    establishing village health posts and mobile health care for unserved areas;

• Improve the capacity of health personnel. The Government recognises the enormous contribution made by its health personnel at all levels across the country. In the struggle against HIV and AIDS they are in the front line and deserve to be supported as far as possible. Specific activities include:

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    Training health personnel at all levels;

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    reviewing and improving working conditions of health personnel to address the high rate of staff turnover and brain drain;

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    training additional Village Health Workers and introducing incentives for them;

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    establishing training for traditional healers to complement health delivery.

• Improve health care management. Government expects that resources and processes should be well managed. During the implementation period, high priority will, therefore, be given to strengthening management capacity at service provision level. Better management of resources will reduce wastage and curb pilferage and will ensure that the Basotho get better value for money through proper, effective and efficient service delivery. To accomplish this, four activities have been prioritised under which the MOHSW will:

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    upgrade the health management information system for measuring, monitoring and evaluating the sector’s performance;

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    strengthen research and data management systems for disease control;

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    intensify and diversify training of health management staff to include effective use of funds;

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    introduce financial controls and management audits to address the problems affecting use of resources and service delivery.

• Strengthen disease prevention programmes. The most cost effective way to manage diseases is to prevent their spread. A concerted effort will be made to expand the programmes involved in prevention, including HIV and AIDS. The strategy is considered to be of particular importance for the PRS as it has far reaching implications for particularly vulnerable groups. In year one of the PRS, Government will outsource health education activities to the private sector with a view to making these as creative and as effective as possible. The outcomes will be closely monitored with the best being selected for up-scaling by year three.

In health education campaigns emphasis will be placed on the use of preventive services, especially childhood vaccinations, family planning, monitoring pregnancy, ante-natal care (ANC) and mother’s health after birth, as well as post-natal care (PNC). A particular focus will be teenage health in order to reduce teenage pregnancy.⁴⁹ Information will be provided on youth friendly services, free supply of contraceptives and empowerment programmes for women to be able to negotiate their sexual rights (especially in view of the HIV and AIDS threat to this group).

The promotion of sanitation and good hygiene practices is an important part of disease prevention and will continue to be given priority. As repeated studies have shown that the biggest constraint to the wider adoption of VIP latrines is their cost, an effort will be made over the next three years to pilot new low-cost prototypes that provide adequate protection against disease at a price that is more affordable for the poor. Soak way and refuse pits will also be encouraged around the homesteads. Water quality surveillance and spring protection will be enhanced. Medical waste management around health facilities will also be given priority.

8.3.2 Improve nutritional status of vulnerable groups

Where there is a significant shortage of food, vulnerable groups such as children under five years suffer the most. This, therefore, is a very high priority area for the PRS, as confirmed by the Basotho in community consultations.

The institutional arrangements to combat malnutrition require clarification. Four ministries or departments (other than MOHSW) play a role at different levels, including: Food and Nutrition Coordination Office (FNCO); Disaster Management Authority (DMA); Ministry of Education and Training (MOET); and the Ministry of Agriculture and Food Security (MOAFS). Given this complexity clear guidelines are required. Activities to address this and other concerns during the PRS period include:

• refining the National Nutrition Policy;

• improving disaster preparedness for emergency food distribution;

• maintaining the school feeding programme;

• strengthening systems of supplementary feeding of malnourished children;

• promoting good nutrition practices through community awareness campaigns, meetings, distribution of pamphlets etc;

• providing nutritional food packages and micro-nutrient supplements to the vulnerable and other relevant groups.

8.3.3 Provide social welfare services for vulnerable groups

During the PRS period the Government will prepare a strategic plan based on the National Social Welfare Policy which will identify top priorities, roles and responsibilities and delivery mechanisms in detail. Unlike South Africa, Lesotho does not have the resources to provide universal monetary support to vulnerable groups.⁵⁰ However, the Government will strive to improve social welfare service delivery to the most vulnerable groups by increasing the resources and capacity of all stakeholders through increased funding and training. In 2004/05, a pension of M150 per month will be introduced for persons over 70 years of age. Other efforts will include mechanisms to assist NGOs working directly with orphans, people living with HIV and AIDS and disabilities, and child-headed households.

Goal:
Number Five: Improve Quality and Access to Essential Healthcare and Social Welfare
Indicators				Baselines	Targets
• Prevalence of malnutrition for under 5 years old by gender:
	I) % of underweight
		Males		26% in 2002	TBD
		Females		28% in 2002	TBD
	ii) % of stunting
		Males		61% in 2002	TBD
		Females		57% in 2002	TBD
	iii) % of wasting
		Males		13% in 2002	TBD
		Females		15% in 2002	TBD
• % of births attended by skilled health personnel				59.9% in 2002	70% by 2006
• Proportion of >1 year old children immunised against measles				77.2% in 2000	80% by 2006
• Infant Mortality rate				81 per 1000 in 2001	70 per 1000 by 2006
• Under- five mortality rate				113 per 1000 live births	103 per 1000 live births by 2006
• Maternal mortality ratio				419 per 100,000 live births in 2001	391 per 100,000 live births
Key Strategies and Activities for Implementation:
Rationalise provision of health services through construction or renovation as necessary. improve the procurement, storage, distribution and maintenance of equipment, drugs and dressings. Improve and expand critical programmes, including child vaccination, family planning, ANC, PNC, reproductive health and teenage motherhood. Review and improve working conditions of health personnel to address the high rate of staff turnover. Train health personnel at all levels. Train additional Village Health Workers and assess modalities of introducing incentives for them. Upgrade health management information system for measuring, monitoring and evaluating performance. Establish new village health posts and mobile health care services for unserved areas. Provide nutritional food packages and micro-nutrient supplements to vulnerable groups and other relevant groups. Improve access to social welfare services.
Total Incremental Costs:
2004/5				2005/6	2006/7	Total
M151,590,783				M189,435,017	M257,261,414	M548,287,213
Key Implementing Agencies:
Ministry of Health and Social Welfare Civil Society Organisations Private Sector Christian Health Association of Lesotho
Comment:

View Table

Goal:
Number Five: Improve Quality and Access to Essential Healthcare and Social Welfare
Indicators				Baselines	Targets
• Prevalence of malnutrition for under 5 years old by gender:
	I) % of underweight
		Males		26% in 2002	TBD
		Females		28% in 2002	TBD
	ii) % of stunting
		Males		61% in 2002	TBD
		Females		57% in 2002	TBD
	iii) % of wasting
		Males		13% in 2002	TBD
		Females		15% in 2002	TBD
• % of births attended by skilled health personnel				59.9% in 2002	70% by 2006
• Proportion of >1 year old children immunised against measles				77.2% in 2000	80% by 2006
• Infant Mortality rate				81 per 1000 in 2001	70 per 1000 by 2006
• Under- five mortality rate				113 per 1000 live births	103 per 1000 live births by 2006
• Maternal mortality ratio				419 per 100,000 live births in 2001	391 per 100,000 live births
Key Strategies and Activities for Implementation:
Rationalise provision of health services through construction or renovation as necessary. improve the procurement, storage, distribution and maintenance of equipment, drugs and dressings. Improve and expand critical programmes, including child vaccination, family planning, ANC, PNC, reproductive health and teenage motherhood. Review and improve working conditions of health personnel to address the high rate of staff turnover. Train health personnel at all levels. Train additional Village Health Workers and assess modalities of introducing incentives for them. Upgrade health management information system for measuring, monitoring and evaluating performance. Establish new village health posts and mobile health care services for unserved areas. Provide nutritional food packages and micro-nutrient supplements to vulnerable groups and other relevant groups. Improve access to social welfare services.
Total Incremental Costs:
2004/5				2005/6	2006/7	Total
M151,590,783				M189,435,017	M257,261,414	M548,287,213
Key Implementing Agencies:
Ministry of Health and Social Welfare Civil Society Organisations Private Sector Christian Health Association of Lesotho
Comment: