Lesotho review 2018 by Lyn G

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Anne Wade & Cara Wade Louella Morgan-Jarvis Lyn Grandemange - Logo Graphics Fishwicks the Printers Anne Wade, Cara Wade, Lesotho Sky – Wayne Reiche, Afriski, Letseng Diamonds, Metolong Authority, Morija Museum & Archives, Semongkong Lodge, Limkokwing University, LNDC, NUL, Storm Mountain Diamonds.

The Lesotho Review provides a comprehensive overview of each sector of the Kingdom of Lesotho’s economy, along with useful information for potential investors and other interested parties, and is updated and published annually. This edition pertains to the 2018 period, and has been compiled with the support of the Lesotho National Development Corporation (LNDC), Lesotho Tourism Development Corporation (LTDC), the Central Bank of Lesotho (CBL) and several business enterprises and organisations that have advertised in the review. Their kind assistance is gratefully acknowledged. The publishers also acknowledge particular sources of editorial information, which include: Lesotho National Budget Speech 2017/18; CBL Annual Report 2016, Monetary Policy Committee statements of September & November 2017, Economic Outlook 2015-2018, and Quarterly Review of March 2017; Lesotho Bureau of Statistics 2016 National Population Census; UN Lesotho Country Analysis of September 2017; African Economic Outlook 2017; IMF ‘World Economic Outlook: October 2017’; World Bank ‘Doing Business 2018’, ‘Scaling-up Renewable Energy Investment Plan’ of November 2017, ‘Water Security and Climate Change Assessment Report’ of 2016, and ‘Lesotho Transport Infrastructure and Connectivity Project’; Lesotho Communications Authority Strategic Business Plan for 2017/18–2019/20; LTDC Newsletter 2017; World Travel & Tourism Council Report of 2017; and the ‘Lesotho Country Profile Report: Transport’ of March 2017 by the Cross Border Road Transport Agency.

Contents

FOREWORD 2 INTRODUCTION 3 FOREIGN TRADE & INVESTMENT

COMMERCE, INDUSTRY & MINING

TOURISM 29 ENVIRONMENTAL CONSERVATION

AGRICULTURE 43 TRANSPORT INFRASTRUCTURE

CONSTRUCTION 53 WATER & ENERGY

INFORMATION & COMMUNICATIONS TECHNOLOGY

FINANCIAL SERVICES, INSURANCE & INVESTMENT

HEALTHCARE 100 EDUCATION & TRAINING

110

USEFUL INFORMATION

117

MAP OF LESOTHO

118

While every care has been taken in the preparation of this publication, the publishers can accept no liability for any errors or omissions that may occur. This publication is the exclusive property of the publishers and no part of the contents may be reproduced in any form without prior written permission of the publishers. All editorial material and photographs are copyrighted.

INDEX TO ADVERTISERS

119

The

Foreword

Lesotho, with its new coalition government led by Thomas Thabane’s All Basotho Congress (ABC), has prioritised the acceleration of economic growth along with the restoration and maintenance of political stability, peace and good governance amidst challenging global, regional and local environments. This involves instituting the much-anticipated independent constitutional, administrative and political reform procedures, which will be undertaken with assistance from the international community. The energy and goodwill of all Basotho is being drawn upon to create an inclusive process that is inspired by the National Vision 2020 document.

© Anne Wade While emphasising the importance of controlling expenditure and intensifying revenue collection in the short to medium-term, Government anticipates improving prospects on the global and regional front. This is based on the expected economic recovery in South Africa of 0.8 percent in 2017 and 1.6 percent in 2018, and growing activity in international economies as manufacturing and trade strengthen along with financial markets. Following growth of just 2.1 percent in 2016/17, the domestic economy is forecast to recover to an average of 3.4 percent over the medium term. The improved economic outlook rests on increased agricultural production following better rains, and projected mining growth of 17.3 percent in 2017/18 as a result of the recovery in global demand for diamonds. Other promising industries include textiles and apparel manufacturing, which is finding increasingly diversified markets, and the tourism sector, where a revised tourism master plan, FOREWORD 2

investment policy and promotion strategy are being completed. An emerging dynamism is evident in Lesotho’s private sector, which has the potential to set the country on an upward growth trajectory, provided political stability is fostered and maintained. Government is committed to re-energising dialogue with the private sector as part of a collaborative effort to accelerate investment, economic growth and job creation. This will be formalised in the next National Strategic Development Plan (NSDP), whose implementation will begin in 2018/19. Trade and market access are also in the spotlight, with the development of industrial infrastructure at Tikoe and Ha Belo, and establishment of effective national standards. Legislation to further both trade and private sector development has been created, and includes the Business Licensing and Registration Bill, Competition Bill and Trade

and Tariff Administration Bill, which are being presented to parliament in the near future. When passed, these bills will simplify trade licensing, reduce uncompetitive business behaviour, and consolidate the administration of tariffs under the SACU Agreement.

entrepreneurship and private sector activity. It seeks to improve access to financial products and services in the rural areas, deepen usage of such products across a wide spectrum of instruments, and increase the take-up and effective use of mobile money and digital finance products and services.

The Private Sector Competitiveness and Economic Diversification programme is spearheading economic diversification, enterprise assistance and investment climate reform. Achievements to date include the roll-out of One-Stop Business Facilitation Centres to major manufacturing hubs such as Maputsoe and Mafeteng, implementation of the 2011 Land Act, regulations on land administration, modernisation of company law under the 2011 Companies Act, establishment of a credit reference bureau in 2015, and the introduction of the national identity card. In addition, the Financial Inclusion Strategy is being implemented as a means of boosting

Lesotho’s future growth is highly dependent on attracting increased attention from global and regional investors, and it is thus important that the opportunities which presently exist for private sector investment are marketed and promoted to potential investors and business leaders. The Lesotho Review provides a comprehensive overview of the country’s business climate and major economic sectors, as well as current policies, development programmes and investment incentives, making it the ideal medium for showcasing Lesotho as a viable investment destination to the business community and investors worldwide.

Introduction

Situated in the highlands of Southern Africa, the mountain kingdom of Lesotho is known for its natural beauty and afro-alpine ecosystems.

Maseru Overview © Cara Wade Lesotho is a constitutional monarchy – one of only three which remain in Africa – and gained its independence from Britain on 4 October 1966. This small, land-locked country with a population of just over 2 million people has been referred to as the ‘Switzerland of Africa’ because of its rugged topography and high altitude: its lowest point is approximately 1 400 metres above sea level. The country is encircled by the economic powerhouse of South Africa, and has forged strong regional ties and trade links with its neighbours. It is currently a member of the Southern African Development Community (SADC), Common Monetary Area (CMA) and Southern African Customs Union (SACU), as well as benefiting from a fixed exchange rate regime with South Africa. Furthermore, trade preferences such as the United States’ African Growth and Opportunity Act (AGOA) have been beneficial for the textile and garments industry. While agriculture was once the dominant sector, today Lesotho’s most important economic activities include construction, mining and manufacturing, and its chief exports are textiles and garments, diamonds, water, wool and mohair. Notable developments over the past few decades include the multi-billion dollar Lesotho Highlands Water Project (LHWP), which harnesses the country’s most abundant natural resource – water – for the industrial complex of Gauteng Province in neighbouring South Africa.

Lesotho’s economy grew at an average rate of 4.5 percent per annum between 2011 and 2015. However, growth slowed in 2016 as activities in the services sector decelerated and agricultural output fell because of the region-wide drought. This was exacerbated by weak regional and global growth. The economy has performed much better in 2017, boosted by a recovery in agriculture as well as mining activity. However, unemployment remains high, as do inequality and poverty, despite Lesotho having made some progress in poverty reduction over the past decade and a half. A more dynamic private sector is seen as being integral to the country’s future success. In this regard, Lesotho has made important progress in improving its business climate. The country jumped by 12 places in the World Bank’s 2017 ‘Doing Business’ report, thanks to factors such as the streamlining of business and property registration processes, and the increased ease of obtaining credit and trading across borders. Further advances look likely under the Second Private Sector Competitiveness and Economic Diversification Project (PSCEDP II).

CLIMATE & GEOGRAPHY Lesotho’s climate is classified as ‘continental’, meaning that it experiences significant annual variations in temperature because of the absence of

large bodies of water in the vicinity. Temperature deviations may be extreme. In the lowlands the range is from -7°C in winter to 30°C in summer. Winter in the highlands is more severe: heavy snowfalls sometimes cut off access to mountain settlements, and temperatures may drop to -18°C. The mean summer temperature is about 25°C and the mean winter temperature about 15°C. Lesotho’s elevation – averaging 2 161 metres above sea level – makes it is cooler than most other regions at a similar latitude. Annual precipitation varies from some 600 millimetres in the lowland valleys to about 1 200 millimetres on the northern and eastern escarpment. Although summers, which last from November to January, are generally sunny, the weather is also notoriously unpredictable. Sudden rain, mist or localised thunderstorms are common between October and April, when approximately 85 percent of annual precipitation occurs. Winters are characterised by clear skies, with snowfalls usually occurring from May to September, although snow may fall on the highest peaks at any time of year. The Mountain Kingdom is surrounded by the Republic of South Africa and bounded by the province of KwaZulu-Natal to the east, the Eastern Cape to the south, and the Free State to the north and west. With a total area of 30 355 square kilometres, making it similar in size to Belgium, Lesotho measures 434 kilometres from north to

south and is encircled by a border of some 909 kilometres. Highlands cover around 65 percent of Lesotho’s land area at elevations ranging between 2 300 and 3 482 metres. From the sandstone hills of the lowlands to the basalt cliffs of the highlands, this is the only independent state in the world that lies entirely above 1 000 metres. Because of its altitude, which is on average 2 161 metres above sea level, Lesotho remains cooler throughout the year than most other regions at the same latitude. Two of the region’s principal rivers, the Senqu (Orange) and Tugela, have their source in the Malotis, as do tributaries of the Mohokare (Caledon) River, which form Lesotho’s western border. The western quarter of the country comprises lowlands, with the lowest point the junction of the Senqu and Makhaleng rivers at 1 380 metres. Lesotho’s tallest peak – and the highest in Southern Africa – is the 3482-metre Thabana-Ntlenyana in the Maloti range. Habitats in Lesotho contain a high degree of biodiversity and endemic plant and animal varieties as well as a remarkable prehistoric and cultural heritage. The mountain highlands are home to INTRODUCTION 3

spectacular birdlife as well as rare wildlife species which have developed specialised adaptations to the high altitude environment. Vegetation is predominantly grassland with patches of evergreen trees and shrubs. Less than 1 percent of the country is covered by indigenous forests.

reaching impact on the history of the Basotho. The expanding military dictatorship of King Shaka of the Zulus, together with a region-wide drought, sparked off the ‘Lifaqane’ (Great Scattering) in a fierce competition among displaced tribes for scarce resources.

HISTORY & POLITICS

When Moshoeshoe’s capital of Botha-Bothe came under attack in 1824, he gathered his people together and retreated to Qiloane plateau and the steep, flat-topped mountain which was to be known as Thaba-Bosiu – the ‘Mountain at Night’. Besieged many times during Moshoeshoe’s reign, the mountain fortress of Thaba-Bosiu, with its nearvertical cliffs, good grazing and freshwater springs, was never captured.

The first inhabitants of Lesotho were the San, who had lived here for thousands of years before a written record of their existence appeared. The accelerating competition for land and resources that marked the history of the Maloti region in the latter part of the 19th century saw the eventual disappearance of these hardy hunter-gatherers from the area. They nonetheless left their mark on the land in a rich legacy of rock art, and smatterings of their language still survive in the Sesotho tongue. Lesotho’s other early settlers were pastoralist Bantuspeaking people from West and Central Africa, who first entered the southern part of the continent sometime between the 3rd and 6th centuries CE. By the 19th century, Sotho clans were spread across the southern plateau, over the western region of present-day Lesotho and a large, fertile expanse of surrounding territory now lying in South Africa’s Free State Province. Comprising small chiefdoms which were united into loose confederations, these southern Sotho tribes came to constitute the Basotho people and speak the unique Sesotho dialect. One figure in particular looms large in the history of Lesotho: Moshoeshoe the Great, who was born in 1786 at Menkhoaneng in what is today the district of Botha-Bothe. The son of a minor chief of the Bakoena of Mokoteli, he was named Lepoqo at birth and later given the praise name Moshoeshoe after he had captured the cattle of Chief Ramonaheng. The emergence of the Basotho as a nation began around the time that Moshoeshoe became chief (1820) and started to form alliances with local clans and chiefdoms. Just prior to Moshoeshoe’s rise to power, the region entered a period of great conflict and upheaval which lasted from around 1815 to 1840. Discord among the Nguni people in Natal and the arrival of white settlers across the Orange River had a farINTRODUCTION 4

While many neighbouring populations were dispersed or decimated during this time, the Basotho emerged as a united force under the inspired leadership of Moshoeshoe. His policy of offering safe haven to refugees (many who were of Nguni origin) in return for their help in defending Basotho territory, helped to create a loosely federated Basotho state forged from local Sotho tribes as well as remnants of scattered clans. Moshoeshoe’s position, built on military as well as diplomatic skill, was by 1840 firmly entrenched, and his subjects numbered about 40 000. In the ensuing decades the Basotho came under ever greater threat from the adjoining Orange Free State. Boer soldiers overran Morija in 1858 and, although Thaba-Bosiu stood firm, repeated onslaughts resulted in Moshoeshoe losing much of his territory. Forced into a peace treaty in 1866, he signed over most of his good land to the Orange Free State. However, further attacks from the Boers came in 1867 and, with pressure mounting, Moshoeshoe appealed to the British for help. In March 1868 the country’s present-day boundaries were established when it became the British protectorate of Basutoland. By the time of Moshoeshoe’s death in 1870, the Basotho nation comprised some 150 000 people. A wise leader who believed in maintaining peace and harmony with all those around him, Moshoeshoe’s near mythical reputation survives to this day. Control of Basutoland was transferred to the Cape Colony after Moshoeshoe’s death. Tax collection

by the new administration caused increasing friction, and a rebellion in 1879 led to the Gun (Basotho) War from 1880 to 1881. This conflict seriously weakened the Cape government, and in 1884 Basutoland came once more under direct British control. Thanks to its status as a British protectorate, it managed to avoid incorporation into the Union of South Africa in 1910. In 1912 the Basotho King Letsie II helped to found the South African Native National Congress, which was later to become the African National Congress (ANC). In the years that followed, Lesotho gained ever more autonomy under British administration, and was granted internal self-government in the form of elections held in 1960 – the same year in which King Moshoeshoe II was crowned. The elections were won by the Basutoland Congress Party (closely allied to South Africa’s ANC), which made full independence from Britain a priority. The 1965 elections saw a change in government, with the conservative Basutoland National Party (BNP) headed by Chief Leabua Jonathan coming into power. When Independence eventually arrived the following year, Chief Jonathan became the first prime minister of the Kingdom of Lesotho. Politics and democracy Lesotho remains a constitutional monarchy, and while King Letsie III is the nominal head of state, executive powers are held by the Prime Minister. For many years Lesotho’s political landscape was controlled by two main parties – the Basotho National Party (BNP), which governed between 1965 and 1986, and the Basutoland Congress Party (BCP), which held power from 1993 until 1998, when a splinter group, the Lesotho Congress for Democracy (LCD) under the leadership of Pakalitha Mosisili, won the elections. The LCD remained in power for the next 14 years. Lesotho is a constitutional monarchy ruled by a king as head of state and governed by a 33-member senate and a 120-member national assembly. A further shift in Basotho politics took place in February 2012, when Prime Minister Mosisili and

44 supporters left the LCD to form a new party, the Democratic Congress (DC). While Mosisili’s DC won the most seats in the general elections of May 2012, the second-placed All Basotho Congress (ABC), under the leadership of Thomas Thabane, achieved a majority in the 120-seat parliament after forging a coalition with the LCD and BNP. Despite a promising start, the coalition Government ran into trouble during 2014, when political tensions led to clashes between the army and the police, forcing Prime Minister Thabane to flee to neighbouring South Africa. A deal brokered by South African Deputy President Cyril Ramaphosa, acting on behalf of SADC, led to a further general election in February 2015. As there was no clear winner, a second consecutive coalition government was formed, with Mr Mosisili’s DC ousting former premier Thabane’s ABC by uniting with smaller parties. Following a vote of no-confidence in Prime Minister Pakalitha Mosisili, Lesotho held yet another general election on 3 June 2017, resulting in the return to power of the ABC and former Prime Minister Thomas Thabane. Although the ABC secured the highest number of seats (48), lacking an absolute majority it was compelled to form a new coalition government – the third in five years. In keeping with recommendations made both by the Commonwealth and SADC for key governance and security reforms, Lesotho’s leadership has committed itself to engaging in multi-stakeholder consultations to achieve political stability and peace going forward. While Lesotho’s elections have a track record of being peaceful and producing results that have been accepted by the general population, it is felt that the current one-vote MMP (mixed member proportional) system has not managed to strike the vital balance between political representation and effective governance. Reforms to the electoral process, such as switching to a mixed-member majoritarian (MMM) system, would increase the probability of a single-party majority while still allowing for an effective opposition in parliament. The path of inclusive reform As stated by Prime Minister Thomas Thabane during his address delivered at the 72nd Session of

Independent Electoral Commission For Further Information Please Contact: The Director of Elections - 3rd Floor, MGC Park, Cnr John Paul II and Mpilo Boulevard P.O. Box 12698, Maseru, 100, LESOTHO • Tel: +266 – 2231 4991 • Fax: +266 – 2231 0398

2017, A Year of Chronicles results, the Commission embarked on intensive preparations for the 2017 Local Government Elections and Fresh Elections in three constituencies of Hololo #2, Teya-Teyaneng #24 and Thupa-Kubu #26. The Prime Minister of Lesotho proclaimed 30th October 2017 as the date of elections to return councillors in 76 local authority areas. Under normal circumstances, for holding any general elections the Commission requires at least 10 months for preparations. However, this time around there was no time for prior preparations before elections period rather preparations that took place during that phase were carried out during the election period. In Likolobeng The 2017 National Assembly Elections were held on 3rd June 2017 as a result Community Council we experienced for the first time a tie in the party votes of a successful vote of no confidence on 1st March 2017 to the 2nd Coalition where the tie was finally resolved by administration of a lot in the presence of Government. The 2nd Coalition Government was elected to office in 28th the political parties affected. February 2015. Therefore His Majesty the King dissolved Parliament on 6th March 2017 and subsequently a proclamation was published fixing 3rd June Local Government Elections are run in quite a high number of Electoral 2017 as the Election Day. Despite the challenges which emerged due to the Divisions as compared to 80 constituencies for the National Assembly complexity nature of any snap election, nonetheless various stakeholders did Elections, as a result of that, there is much to learn from the LGE than in the NAE. The Commission is determined that the coming term both elections commended that the IEC had run successful and peaceful elections. should be held simultaneously as a way of addressing voter apathy and Immediately after the announcement of the 2017 National Assembly Elections making elections more cost effective. 2017 has been a year where the Independent Electoral Commission (IEC) worked tirelessly in preparing for the holding of the National Assembly Elections (NAE) and the Local Government Elections (LGE). It is for the first time in the history of the Kingdom of Lesotho’s democratic elections that, the IEC had to administer NAE and LGE barely a month apart. The NAE came as a result of a motion of no confidence whilst LGE, which was due in October 2016 had to be postponed to September 2017 to give time for the 50 years independence celebration.

2017 National Assembly Elections, Advance voters queueing to cast their votes.

Female District Electoral Officers presentented by the Director of Elections to the IEC general staff meeting.

Members of the Commission, Chairperson, Justice Mahapela Lehohla, Commissioner, Dr. Makase Nyaphisi and Commissioner Advocate ‘Mamosebi Pholo with Former Kenyan Prime Minister Raila Odinga, Head of AU Delegation to Lesotho and his entourage.

Public Relations Officer, Mr. Tuoe Hants’i making a presentation on Media Code of Conduct during Elections for Media personnel on the World Press Day Commemoration.

population), with the balance of the population embracing indigenous beliefs.

the General Assembly of the United Nations (UN) in New York, the newly-inaugurated administration has set for itself the goal of restructuring a variety of government institutions. In this regard, Lesotho is committed to fully implementing the SADC directive of embarking on a series of inclusive reforms. This comprises constitutional, electoral, parliamentary, public sector and security sector reforms, and will include all relevant stakeholders in order to establish a stable political order which is conducive to economic development. Government is resolved to work together with SADC in pursuit of lasting peace and security in Lesotho and, indeed, the wider region. Good progress has been made thus far in strengthening democratic institutions and facilitating economic growth, with the assistance of the country’s development partners as well as the African Union and the UN. On the development front, Government is focused on maintaining strict fiscal discipline in order to stabilise the national economy, stimulate growth and business activity, while preserving the environment. At the same time there is renewed emphasis on combating crime and corruption at all levels, in accordance with Goal 16 of the Sustainable Development Goals (SDGs), which recognises that corruption undermines efforts to fight poverty and gender inequality. Prime Minister Thabane stated further that for the concept of development to be meaningful it must bestow tangible benefits on communities in a sustainable manner. This recognises the role of the youth in decision making at all levels. Further, job creation for the youth remains a priority, and Goal 8 of the SDGs – the global strategy for youth employment – is to be operationalised by the year 2020. In light of this, the Government of Lesotho intends harnessing the energy of young Basotho men and women for the advancement of the economy. Empowerment of women is also central to Government’s development policy, as it is believed that the elevation of women to positions of leadership, both in the private and public spheres, will lead to a more equitable and prosperous society. Moreover, Lesotho continues to deal with the INTRODUCTION 6

‘Lesotho’ means ‘the land of the people who speak Sesotho’. This was the language spoken by the various groups which united to form the nation in the early 1800s, and today the country’s official languages are Sesotho and English. While most people speak Sesotho, English is widely used in government and commerce. The next most commonly spoken language is Zulu, which is heard in the Botha-Bothe district and the vicinity of the Caledonspoort border post, followed by Xhosa.

© Anne Wade scourge of the HIV/AIDS pandemic, which is more prevalent among women. In recognition of the fact that poverty and the AIDS pandemic go hand in hand, poverty eradication policies are targeted to reach the most vulnerable groups: the elderly, AIDS orphans, women and the youth. Lesotho remains steadfast in ensuring that these social issues are tackled, as they are key components of the SDGs. Lesotho is categorised as a Least Developed Country (LDC). Furthermore, like other Landlocked Developing Countries (LLDCs), it faces challenges inherently linked to its unique geographical position. The burden of high transport costs and cumbersome and slow export processing procedures remain serious impediments to external trade. This underlines the need for increased international assistance in infrastructure development and institutional capacity building, as well as industrialisation and enhancement of productive capacity, not only for the LLDCs but for all developing countries. In recent years Lesotho has faced prolonged droughts due to climate effects such as El Niño, which has brought long periods of below-average rainfall to the entire Southern African subcontinent, leading to food shortages and other hardships. The hurricanes that devastated the Caribbean and parts of the United States, together with torrential rains and floods across the globe,

are a stark reminder of the damaging effects of climate change and that urgent action is required in accordance with the Paris Climate Change Treaty adopted in 2016.

The Basotho have developed a unique culture and traditional dress to suit their mountainous homeland. The cone-shaped Qiloane Mountain, which is one of the kingdom’s best-known landmarks, is the prototype for the iconic ‘mokorotlo’ – the conical Basotho hat made of woven straw. A common sight in the countryside is a Basotho horseman clad in ‘kobo’ (traditional cloak or blanket), who will raise his hand in the customary greeting, ‘khotso’, meaning ‘peace’.

In conclusion, Prime Minister Thabane called on the international community to continue mobilising and providing additional financial resources for Africa to develop climate-friendly technologies to address the continent’s urgent adaptation and mitigation needs. Small countries like Lesotho, including Small Island States, need to be empowered with technologies to deal with and adapt to climate change challenges. Attainment of sustainable development will prove elusive if there is no genuine commitment by development partners. The principles of common but differentiated responsibility and economic might and capability between the developed and the developing nations are critical for Lesotho’s success in building and achieving sustainability.

In the rural areas, beautifully patterned woollen blankets ideally suited to the high-altitude climate are the regular form of daily dress for men (especially horsemen and herdboys) as well as many women. New blankets with a unique pattern are created every year in honour of the King’s birthday, and these are bought by the general populace and worn at his public birthday celebrations, which are held in a different town every year.

THE BASOTHO

A little under three-quarters of all Basotho still live in the rural areas, and settlements tend to be located high in the mountains, usually well above the deep river valleys where flooding is an ever-present reality. The typical Basotho village comprises a number of ‘kraals’ (a collection of buildings belonging to one family), each of which has an enclosure for livestock in addition to areas for sleeping, cooking and storage.

Inhabitants of Lesotho are referred to in the plural as ‘Basotho’ and in the singular as ‘Mosotho’. The people are predominantly Sotho in ethnicity (99.7 percent), with Europeans, Asians and ‘other’ accounting for 0.3 percent. The predominant religion is Christianity (about four-fifths of the

Basotho women have traditionally been responsible for the creation of ‘litema’, which are decorative etchings made on and inside their homes. Some ‘litema’ are coloured with paint or natural pigments, and their patterns are said to have inspired the designs of the Basotho blanket.

LESOTHO REVENUE AUTHORITY Serving You, Serving the Nation - Re Sebeletsa Uena, Re Sebeletsa Sechaba

TEL: (+266) 5221 3796 or (+266) 5221 5000/1/2 FAX: (+266) 2231 2091 E-mail: info@lra.org.ls P.O. BOX 1085, MASERU Phase III Finance House, Opposite Queen II

VISION To be a leading performance oriented revenue administration characterized by integrity, innovation and service excellence.

Vision

MISSION

Website: www.lra.org.ls

Mission

provide revenue collection, border management and ToTobe a leading performance oriented advisoryadministration services through: - A capable and revenue characterized by motivated workforce; - Understanding andexcellence. responding to the integrity, innovation and service needs of our market; - Building strong and sustainable relationships with stakeholders; - Fast, efficient and cost effective programs.

To provide revenue collection, border management and advisory services through: - A capable and motivated workforce; - Understanding and responding to the needs of our market; - Building strong and sustainable relationships with stakeholders; - Fast, efficient and cost effective programs. To promote dialogue between the Government Lesotho andAgents the private New Customs Procedures For Commercial Traders of and Clearing

sector, the Lesotho Revenue Authority (LRA) and Nedbank Lesotho annually

Proceed hosts to the Border Post Budget Speech Gala Panel Discussions.

The LRA in June 2016 donated farming projects to St. Leo Primary School at Ha Makhoathi in the outskirts of Maseru. These include a Green House, Piggery, Chicken Layers and Broilers. This donation forms part of the LRA's broader corporate social investment programme intended to improve the lives of ordinary Basotho especially the most vulnerable. St. Leo Primary School looks after more than 80 double orphans.

Proceed to Border (P2B)

Assessment Notice

Goods ready for import/ export 1

As part of the LRA's Customs Modernisation Programme; a Non-Intrusive X-ray Baggage Scanner was in April 2016 deployed at the Moshoeshoe International Airport (MIA). This follows introduction and roll-out of Compact Mobile Scanners in 2015 as well as automation of customs procedures in all commercial ports of entry.

p2b

Here the Honourable Minister of Finance, Dr. Moeketsi Majoro addresses the participants during the discussions.

타 타 타 타

Send documents to Agent if need be 2

Agent/ Declarant captures declaration

Importer Makes payment

Customs works on declaration

Exit Notice

Move goods to the border

Report Arrival of goods

Customs may conduct inspection

Goods are exited

P2B is an automated notification that allows a consignment to Proceed To Border for possible inspection & release Declare and pay in advance and if P2B notification is not issued within 24 hours after declaration, make an enquiry on ecustoms@lra.org.ls / 5221 5111 / 5221 5112 P2B No consignment shouldIncome to the to border without an effort induce the ASYCUDAWorld culture of compliance, the Lesotho Revenue Authority P2B is now accessible from(LRA) the System anytime when it iscampaign due, just click this icon organized a tax walk aimed at creating awareness and

reminding the Taxpayers to file their Income Tax Returns and to pay taxes due.

Villages are encircled by fields where subsistence farming takes place and crops such as maize, wheat, sorghum, beans and peas, onions and cabbage are cultivated. Many local herbs are also gathered as green vegetables known as ‘moroho’. Animals are an important part of daily life. Most families will have some cattle, and oxen are used to plough the sloping mountain fields. Wool and mohair are major sources of income, with herds of sheep and Angora goats tended by shepherds, who are often young boys living in simple huts or ‘motebo’. The hardy Basotho pony remains one of the best forms of transport in the mountains, with donkeys often used as pack animals. Each village has a chief, or headman, who falls under the chief for that region. Although many Basotho live and work outside Lesotho, their attachment to their local village and culture remains strong. Most traditions and festivals relate to local village life and seasons of the year, based on the communities’ strong agricultural roots. 2016 Population and Housing Census Lesotho’s population has passed the two million mark for the first time, according to the preliminary results of the 2016 Population and Housing Census which took place from 10 to 24 April 2016 countrywide. The report revealed that population numbers have risen to 2 008 801, up from the 1 876 633 recorded at the time of the 2006 census, constituting a growth rate of 6.8 percent. During this ten-year period the population increased in all districts except for Mafeteng, Mohale’s Hoek and Quthing, to reach an average population density of 66 persons per square kilometre and 349.8 people per square kilometre of arable land. The results of the 2016 Population and Housing Census provide a snapshot of Lesotho’s socioeconomic and demographic indicators, allowing the development of well-informed plans, programmes and policies to improve the living standards of the nation as a whole. According to Lesotho’s Bureau of Statistics, the population is relatively young (39.6 percent of the total population), of which there are 403 000 males and 391 940 females. Regarding fertility, the census INTRODUCTION 8

results show an estimate of 3.2 children per woman. This does not differ much from the estimated 3.5 children per woman as shown in the 2006 census, but is significantly less than the 1976 estimate of 5.4 children per woman. The Minister of Development Planning, Mr Tlohelang Aumane, has expressed hope that the census results will provide benchmarks against which the performance of the government and the nation may be measured; especially in respect of tracking Lesotho’s implementation of the UN’s Sustainable Development Goals, Agenda 2063, SADC Regional Indicative Strategic Development Plan (RISDP) and other developmental initiatives. Lesotho has been conducting censuses since 1845, when they consisted of a simple body count. The decennial and scientific census commenced in 1966.

MAIN POPULATION CENTRES Lesotho’s principal population centres had their beginnings in the administrative ‘camps’ set up during the colonial area. Urban areas gradually formed around these camps as the Basotho came to live there. Most have a nucleus of old colonial sandstone buildings housing government departments, post offices and banks. Modern houses and flats provide residential accommodation in the larger towns, while on the outskirts of rural villages typical Basotho dwellings comprise huts made of earth and stone with thatched or corrugated iron roofs. Lesotho has ten administrative districts, each with its own capital. The district towns have the same name as the district itself, with three exceptions: Leribe, where the capital is Hlotse; Berea, which has Teyateyaneng as its main town; and Quthing, where the capital is also known as Moyeni. Besides the district towns, there are two more gazetted towns in Lesotho; comprising Maputsoe in Leribe district and Semonkong in Maseru district. MASERU: With an average population density of 1 931 people per square kilometre and an estimated 267 000 inhabitants, Maseru is home to around half Lesotho’s urban population. The city, which has been the capital of the Basotho nation since 1869, has grown rapidly since independence.

Maseru, whose name means ‘the place of red sandstone’ in Sesotho, lies in a shallow valley in the foothills of the Maloti Mountains. To the west, the Mohokare (Caledon) River marks the border with South Africa, across which the Free State town of Ladybrand may be easily accessed via the Maseru Bridge border post. From here there are good road links to the rest of southern Africa, including the harbour of Durban and the economic hub of Johannesburg, with the latter just an hour away by air from Moshoeshoe I International Airport. The centre of Maseru, which is presently being upgraded, comprises many older colonial buildings built from local sandstone, as well as some newer structures. Kingsway, the main street, boasts multi-storeyed office blocks, banks and ministerial complexes. It runs from the border crossing, southeast through the centre of town to the central traffic circle, where it splits into two important traffic arteries – the main roads to the north and south. Central landmarks along Kingsway include the former Anglican Church, Resident Commissioner’s House, modern Post Office building and large Roman Catholic Church. Colourful markets and a plethora of informal traders give Maseru an authentically African feel. Maseru’s amenities include international hotels and restaurants, casinos and entertainment venues, as well as modern state-of-the-art shopping malls, chain stores, supermarkets and stylish boutiques. Opened at the end of 2012, Maseru Mall lies 3 kilometres to the south of the capital’s central business district and offers a cross-section of department stores, financial services, grocery, clothing and homeware outlets, restaurants and takeaways. Dubbed ‘Lesotho’s largest lifestyle shopping mall’, the centre also boasts a popular family entertainment area. The refurbished Fairways Plaza on Kingsway forms part of the drive by the Lesotho National Development Corporation (LNDC) to rebuild and upgrade those properties affected by the 1998 political unrest. This is seeing a number of prime sites in the capital being made available to the private sector to develop on behalf of Government. The initiative aims to revitalise Maseru by renovating derelict properties and improving the

general appearance of the capital. In addition to the Fairways complex, which will ultimately comprise six storeys, other properties include those at Maseru’s Sanlam Centre site, Clifford Trading along Kingsway, Ha-Nyeye Western and Eastern Extensions in Maputsoe, Setsoto Design in Teyateyaneng, and the former Metro Cash and Carry in Mafeteng. Important manufacturing activities in Maseru include electronics assembly, textiles and clothing. The state-of-the-art Queen Mamohato Memorial Hospital was opened in Botšabelo in 2011, replacing the Queen Elizabeth II Hospital built in the 1950s. Maseru is also home to Lesotho’s other university, Limkokwing University of Creative Technology (LUCT). MAZENOD: The site of Moshoeshoe I International Airport, which opened in 1985, Mazenod takes its name from Eugene de Mazenod, founder of the Oblates of Mary Immaculate. Mazenod is major centre of Catholicism in Lesotho, with educational institutions, a printing works and a conference centre. Because of its proximity to Maseru and network of tarred roads, it also has one of the most rapid population growth rates in the country. BOTHA-BOTHE: Situated about 125 kilometres from Maseru in northern Lesotho, this is the country’s second-largest town. It was first settled in the 1800s by King Moshoeshoe the Great, who made the flat-topped sandstone plateau of BothaBothe Mountain his stronghold up until 1824. Botha-Bothe means ‘The Place of Lying Down’, as it was here that Moshoeshoe and his people sought refuge from the widespread chaos and warfare of the ‘Lifaqane’. The colonial history of Botha-Bothe dates to 1884 when it was set up as a government sub-district to enable the local Basotho to pay their taxes. These days this bustling town with its magnificent mountain backdrop is a tourism hub, boasting community and administrative buildings, a hotel and market place, as well as a mosque for its sizeable Indian population. The Lesotho Tourism Development Corporation in conjunction with Action Lesotho has assisted in the development of a monthly fleamarket showcasing the district’s

arts and crafts. There are well-preserved dinosaur footprints to be found close to the town in the caves at Sekubu. ROMA: Set in a lovely valley surrounded by mountains, this attractive town is a short 30-kilometre drive from Maseru. Best known as the site of the National University of Lesotho, Roma is also home to the Lesotho Observatory Foundation, three seminaries, various novitiates and a number of secondary schools. Roma was founded in 1862 as a Catholic mission town, and contains some surviving mission buildings as well as the more recent addition of a side-chapel to the pro-cathedral that contains the grave of Father Gerard, a French missionary who was beatified by Pope John Paul II in 1988. St Joseph’s Hospital, a teaching hospital for the Roma College of Nursing, is also situated here. Visitors will enjoy the Ha Baroana rock art situated to the north of the town, as well as the nearby dinosaur footprints. MORIJA: Named after the biblical Mount Moriah, this quaint town lies about 45 kilometres to the south of Maseru at the foot of the Makhoarane Plateau. It is the site of the earliest mission in Lesotho, having been founded in 1833 by French Protestant missionaries at the invitation of King Moshoeshoe the Great. An important historical and cultural centre, Morija houses Lesotho’s national museum as well as the oldest building in the country, Maeder House (1843). The impressive Lesotho Evangelical Church built in the mid19th century was constructed from over 130 000 handmade bricks. Although the original settlement was almost destroyed during the 1858 Basotho-Boer War by commandos from the Free State, who left only the church and Maeder House standing, Morija became known as the ‘Well-Spring of Learning’ because of its pivotal role in training Lesotho’s first educated elite. The town has remained an educational and cultural centre, and is home to a number of primary and high schools as well as a theological school. A small printing press began operating in Morija in 1861 and started the first Sesotho language newspaper: ‘Leselinyana la Lesotho’ (The Little Light of Lesotho). A printing works was subsequently established to produce books and later INTRODUCTION 10

the town and along the road to Leribe via Pitseng. PEKA: As a sub-district of Leribe district with its own government reserve, Peka became one of the most densely populated rural areas during the colonial period. From the 1920s until shortly before independence, a colonial officer dealing with administrative matters was stationed at Peka Reserve. Since 1966 a post office and courthouse have been built and electricity and water are now available in the urban area while health services are supplied at two clinics. Tarred roads link Peka with Maputsoe and Leribe to the north, Teyateyaneng to the south, and South Africa via Peka Bridge border post to the west.

Pony trekking at Maletsunyane Falls © Semonkong Lodge expanded to distribute Christian and educational literature across southern and central Africa. Situated next to Maeder House, Morija Printing Works maintains a long tradition of high quality production and is the leading press in Lesotho.

builds on Morija’s history as a cultural and tourism destination, with precinct partners sharing resources and customers. (For further information on the MMA and its activities, consult the ‘Tourism’ chapter.)

The town’s central focus is the Morija Museum & Archives (MMA), a non-profit cultural and educational institution which belongs to the Lesotho Evangelical Church. MMA is dedicated to developing programmes and activities related to history, heritage and community-based tourism, the arts and culture, as well as science and the environment.

The Morija Arts & Cultural Festival was first held in 1999 and soon became the major cultural event in Lesotho, attracting approximately 35 000 people every year thanks to the outstanding mobilisation of institutions, sponsors and communities. In 2014 the festival was postponed as a result of the uncertain political situation in Lesotho at the time.

The Morija Museum and Archives is a non-profit cultural and educational institution developed by the Lesotho Evangelical Church of Southern Africa in 1956. The Morija Cultural Precinct encompasses the MMA, the Morija Arts Centre (opened in 2011), Maeder House Gallery, Linotšing Studios, Heritage Park, the Morija Amphitheatre and Cafe Mojo, and most recently the Morija Hub, which operates as a creative technology lab and offers basic computer training as well as creative workshops. The cultural precinct is a collaborative community of arts, learning and business enterprises, and

TEYATEYANENG: Teyateyaneng, which is popularly abbreviated to ‘TY’, lies on an elevated plateau approximately 40 kilometres out of Maseru on the A1 North. This pleasant town, whose name means ‘Place of Shifting Sands’ in reference to the changing course of the nearby river, was founded in 1886 as the capital of Berea district by Chief Masopha in the aftermath of the Gun War. While Teyateyaneng’s older settlements comprise the St Agnes Mission, the surrounding area was once home to even older inhabitants – the San – whose art remains on some of the rock shelters in the vicinity. TY is also an important centre for local handicrafts such as beautiful tapestries, woollen jerseys, blankets and mohair rugs, pottery and woven goods, with craft outlets to be found both in

MAPOTENG: The Mapoteng area gained prominence in the late 19th century with the expansion of settlements into the Maloti mountain range and goods being transported from the road head here into the interior. By 1910 it was known as the site of Dawson’s Store and the seat of the ward chief Peete Lesaoana. Mapoteng was also the birthplace of the political activist Josiel Lefela. The Maluti Adventist Hospital opened in 1951 and has an attached nursing school which is the largest single enterprise in Mapoteng. Originally specialising in eye diseases, the hospital has since set up an HIV/AIDS unit. MAPUTSOE: Located about 86 kilometres north of Maseru, this bustling border town is connected to Ficksburg in the Free State via the bridge across the Mohokare (Caledon) River – the principal crossing point between Lesotho and South Africa. Maputsoe is also an important industrial centre, although early industries such as maize milling and the manufacturing of furniture, electric light fittings, tractors and shoes, have been overtaken in importance by the garments industry. LERIBE (HLOTSE): This little town is the headquarters of the Leribe district, and lies north of Maseru and close to the Maputsoe (Ficksburg Bridge) border post. It was originally named ‘Hlotse’ after the nearby river, but is more commonly called ‘Leribe’ after the district, which was in turn named after the French Catholic Mission in the vicinity. There are a number of shops as well as a busy market, with the Leribe Craft Centre selling beautiful handmade mohair items.

Protecting your land rights, protecting you Re sireletsa litokelo tsa hau mobung, rea u sireletsa Cadastral Services delivering advice, information and quality customer-centric services.

OUR SERVICES LEASING AND CUSTOMER SERVICES: Customer services is the point of contact and ensures efficient customer services for all lease transactions. Services and documents needed!

Public Outreach.

Customer Service extends beyond offices.

• ~~ ~~ ~~

Lease applications: Allocation title Identity documents S10

• ~~ ~~ ~~ ~~ ~~

Transfer: Passport of buyers Marriage certificate Valuation Report Ground rent update Court order

CADASTRAL SERVICES: This department ensures efficient customer service for cadastral survey, mapping and lease enquiries and subdivision. Services and documents needed! • ~~ ~~ ~~ ~~

How do I get S10 form: Approach a private surveyor Produces the original allocation title Surveyor will survey the land Surveyor will then submit the job file to LAA for examination ~~ S10 form will be issued upon passing the examination ~~ Surveyor will collect the S10 form and give it to the land owner

DEEDS REGISTRATION SERVICES: Transfer of property attracts the stamp and transfer duty. Services and documents needed! • ~~ ~~ ~~

Registration of deeds: Transfers Bonds Sublease agreements

• ~~ ~~ ~~ ~~

Endorsement: Original Lease Death certificate Marriage Certificate Identification documents

• Subdivision: ~~ Approval from physical planning ~~ Subdivision S10 form

Tel: +266 2221 4100 Fax: +266 2231 3303 P. O. Box 11856, Maseru, 100, Lesotho Lerotholi Road, Maseru, 100, Lesotho

E-mail: info@laa.org.ls Website: www.laa.org.ls tsamaisongeamobu@facebook.com landauthority@twitter.com

LESOTHO FUNERAL SERVICES We specialise in selling coffins, wreaths, funeral undertaking, funeral schemes, tombstones, international repatriation, cremation & embalming.

Tel: +266 2231 3066 / 2232 3150 • Fax: +266 2231 0176 • E-mail: info@lesothofuneral.co.ls Website: www.lesothofuneral.co.ls • Corner Mpilo Boulevarde and Nightingale Road, Maseru • PO Box 658, Maseru 100

Vision:

Lesotho Funeral Services strives to be in the lead of high quality funeral undertaking services. EXECUTIVE SUMMARY Lesotho Funeral Services is a propriety company registered in Lesotho and was established in 1969 under Metropolitan’s life insurance, known as Homes Trust Life, and is the first funeral undertaking business in Lesotho. The business provides mortuary services and specialises in funeral policies, funeral services, funeral programmes, exhumation, cremation, international repatriation, transportation of human remains, coffins, tombstone sale and erection, and embalming. Lesotho Funeral Services has been awarded numerous international awards which include: • The Arch of Europe gold star award Illinois 1986 • International award for excellence and business prestige New York 2000 • Golden Medal for Quality and Services Argentina - 2003 • International Star for Quality and Services – Geneva 2008 Lesotho Funeral Services is a member of National and International Funeral Associations such as National Funeral Director of Lesotho, National Funeral Directors Association of Southern Africa, South African Funeral Practitioners Associations and International Order of the Golden Rule.

Mission Statement:

We offer quality, affordable and sustainable funeral undertaking services, with highly qualified, motivated, committed and empathetic professionals.

OUR SERVICES CUSTODY OF HUMAN REMAINS All human remains of known and unknown corpses brought to our mortuaries by members of Lesotho Mounted Police Services (LMPS), deceased bodies collected from hospital mortuaries, collections made by our drivers/undertakers from places of residence and human remain collected from the Republic of South Africa.

Lesotho Funeral Services aligns itself with the Principles of the QC 100 Total Quality Management Model. Commitment of LESOTHO FUNERAL SERVICES To Quality

Lesotho Funeral Services operates from three (3) regional headquarters in Lesotho being the Central region headquarters in Maseru, Northern region headquarters in Leribe and Southern region headquarters in Mohale’s Hoek, with a total of thirty (30) branches throughout the Kingdom of Lesotho, and one (1) Tombstone factory with the aim to bring services they can easily be accessible at affordable prices. Lesotho Funeral Services has maintained a high quality of services to its customers. It has been consistent throughout the years, hence the motto “With you all the way”. Lesotho Funeral Services will always lay loved ones to rest, with the utmost dignity and deepest sympathy to the bereaved.

Our company accepts quality as a factor of development to become more competitive. 1. Quality is a consequence valuating Customer satisfaction and obtaining positive business results. 2. Meet the quality levels established in the Company in accordance with the QC100 Points of quality. 3. Encourage participation and teamwork for expectations. 4. Satisfy the needs of our clients and meet their expectations. 5. Provide human resources both technical and economic to achieve Continuous improvement for the environment. 6. Manage human resources in our Company to achieve maximum potential.

7. Make employees aware of the importance of concentration on the most profitable area of activity to achieve the best business results. The achievement of these seven principles by LESOTHO FUNERAL SERVICES will foster improvement for client, employees, suppliers and all of the other persons who make up the company. GENEVA, October 27, 2008 The document is the ideological support of the International Star Award for Quality.

SOCIAL RESPONSIBILITIY Lesotho Funeral Services carries out a social responsibility for the citizens of the country: We donate to charitable organisations, National University of Lesotho research, and sporting organisations and teams.

Core Values: • • • •

Integrity – We do what is right all the time; Excellence – We are constantly redefining our goals, expectations, boundaries and potential; Employee Development – We strive to create an atmosphere that inspires and enables people to reach their full potential; Community Impact – We use our talents and treasures to make a difference to those who need it most.

Hlotse was important during Lesotho’s colonial era and remains one of the kingdom’s larger centres. It was founded in 1876 when the resident magistrate and an Anglican missionary were granted permission to build by the local chief. The Anglican Church dates from 1877 and is the oldest building in the town. During the Gun War of 1880-1881 the small fort at the mission was often under siege by the Basotho. Major Bell’s Tower is part of the original fort and remains a landmark on the main street. There is also a cemetery which dates back to that era of military conflict. One of the best examples of dinosaur footprints preserved in sandstone can be seen at Subeng Stream, about 7 kilometres north of Hlotse and an easy walk from the main Hlotse-Botha-Bothe road. OXBOW: This small village is situated to the east of Botha-Bothe, past the Liphofung Cave Cultural Historical Site and through spectacular mountain vistas where the tarred road traverses the Moteng Pass. Oxbow is one of the few places on the continent to offer snow-skiing, and the area contains Africa’s highest ski resort at AfriSki. The 67-kilometre road between Oxbow and Mapholaneng, which passes the Letšeng diamond mine, has been upgraded. Narrow and steep, the tarred Moteng Pass reaches a height of 2 820 metres above sea level. MOKHOTLONG: The tarred road from Oxbow to Mokhotlong follows the original ‘Roof of Africa’ rally route through spectacular mountain ranges and over Tlaeeng Pass – Lesotho’s highest at 3 275 metres. Mokhotlong, which was founded as a police post, is the district headquarters of one of the most remote and isolated areas in Lesotho. While the village is now linked to the rest of the country via the A1, A3 and A31, and South Africa via the Sani Pass, winter conditions can be extreme, and snowfalls are still able to cut Mokhotlong off from the outside world for several days at a time. Mokhotlong is an ideal spot for walking and climbing, and the mountaineers’ chalet at Sani Top is a good base from which to ascend the majestic Thabana-Ntlenyana – Africa’s highest peak south of INTRODUCTION 14

Mount Kilimanjaro. Sani Top has one of the highest pubs in Africa and is a wonderful spot to take in the beautiful scenery of the Mountain Kingdom. The 47-kilometre road between Mokhotlong and Sani Top has been upgraded to bitumen standard and should see both trade and tourism improving in this formerly inaccessible area. In addition, the construction of Polihali Dam as part of the second phase of the Lesotho Highlands Water Project, will spur development in the area. SEMONKONG: The small trading post of Semonkong lies about 130 kilometres southeast of Maseru in the beautiful Thaba Putsoa mountain range. Founded in the 1880s by Basotho fleeing the Gun War, Semonkong is today a handy base from which to see the surrounding attractions. The town, whose name means the ‘Place of Smoke’, is thought to derive its name from the spray which rises from the Maletsunyane Falls some 5 kilometres downriver. In addition to the impressive 204-metrehigh Maletsunyane Falls, which constitute the highest single-drop waterfall in Southern Africa, the lovely Ketane Falls (situated one day’s pony trek away) are another highlight. The steep mountain slopes surrounding Semonkong are one of the best locales to find Lesotho’s national flower: the spiral aloe, or ‘Aloe Polyphylla’. MALEALEA: Situated an 80-minute drive south of Maseru, the rural village of Malealea is a perfect base for visitors entering Lesotho. Set amidst aweinspiring mountain scenery near the aptly-named Gates of Paradise Pass, it is also regarded as one of the country’s top adventure destinations, boasting beautiful valleys and hills that are ideal for hiking or pony trekking to attractions such as Botso’ela Waterfall, Pitseng gorge and plateau, and Ribaneng Waterfall. There are good San rock paintings here, while visits to the surrounding villages offer visitors an authentic view of local culture and the traditional Basotho way of life. THABA-TSEKA: The administrative centre of the mountainous Thaba-Tseka district, the town of Thaba-Tseka – the ‘Mountain with a Blaze’ – was built during the first phase of the Lesotho Highlands Water Project. This grand-scale water

transfer scheme, which saw the construction of the enormous Katse Dam, had a profound effect on the area: from infrastructural developments such as improved road networks to a skills training centre to help residents empower themselves. The ThabaTseka Technical Institute has subsequently provided training courses, business advice and technical services to the surrounding community for over two decades. The full panorama of Lesotho’s scenic splendour is on view along the route from Mohale to Katse via Thaba-Tseka. The Likalaneng-Thaba-Tseka road is currently being upgraded, and further construction and renovation of roads in the district is making this centre considerably more accessible and tourist-friendly, with the completed network to link Maseru-Katse-Leribe. Places of interest in the vicinity include Katse Dam (with a renovated information centre), Katse Botanical Gardens and Bokong Nature Reserve. MAFETENG: Sitting about 76 kilometres south of Maseru, this is the closest town to the Van Rooyens Gate border post. An administrative and commercial hub, Mafeteng was a garrison town during the Gun War of 1880-1881. The cemetery contains an obelisk commemorating members of the Cape forces who fell in action, while the Residency once served as a hospital. The town and its environs also played an important role in Lesotho’s early literary history. The first locallyowned printing works was established in 1904 at Ha Khojane, 10 kilometres west of the town. The newspaper ‘Naledi ea Lesotho’ was printed there from 1904 onwards and distributed across southern Africa. MOHALE’S HOEK: Situated close to the Makhaleng Bridge border post and surrounded by the lovely Mokhele Mountains, Mohale’s Hoek is some two hours’ drive along the A2 from Maseru – a distance of 123 kilometres. When Lesotho became a British protectorate in 1868, Mohale’s Hoek became the district headquarters. The years since independence have seen an airstrip constructed here as well as a small industrial estate. QUTHING (Moyeni): The capital of Quthing District in the southernmost part of Lesotho, Quthing is also known as Moyeni, the ‘Place of the

Wind’, and lies some 180 kilometres from Maseru. The colonial district headquarters was originally set up at Silver Spruit in 1877, but re-established here in 1884 after the Gun War. The town consists of the old colonial administrative centre of Upper Moyeni, which has a post office, hospital, police station and hotel, and Lower Moyeni, which is the main commercial centre. The fascinating rock art to be found in the area was left by the San, who lived in this region for many centuries. Today the district is characterised by a mix of languages and cultures. Other nearby attractions worth seeing comprise Lesotho’s most accessible dinosaur footprints, Masitise (Ellenberger’s) Cave House Museum (a national monument), and the twin-spired sandstone church of Villa Maria Mission. There are guided tours to the ruins of the historical Mt Moorosi fortress, where Chief Moorosi was besieged by British troops. QACHA’S NEK: Qacha’s Nek was founded in 1888 as a mission station, and later became the district’s administrative centre. Archaeological excavations at rock shelters in the area nonetheless suggest that people have lived here for more than 50 000 years. More recent cultural attractions include the lovely St Joseph’s Church and a number of sandstone buildings dating from the colonial era. This important border town is the nearest entry point from South Africa’s Eastern Cape into Lesotho. However, up until 1966 it was without direct road links to the rest of the country, meaning supplies had to be procured from the South African town of Matatiele. While these days there is a tarred road all the way to Maseru, air transport remains important, and there is an airstrip that connects the town to the capital as well as other villages in the highlands of the upper Senqu Valley. Owing to the region’s high rainfall, the area around Qacha’s Nek is filled with more trees than any other place in Lesotho. There is a fairly good (though unsealed) road most of the way from Qacha’s Nek to Sehlabathebe National Park some 50 kilometres away. The last few kilometres need to be tackled by a four wheel drive vehicle.

Directorate on Corruption and Economic Offences (DCEO) Former British High Commission Building, P O Box 16060, Maseru 100, Lesotho Telephone: +266 2221 9200 Director-General Adv Borotho Motsoso

Introduction The last time DCEO featured an advert in Lesotho Review was in 2012. This article seeks to update the reader on developments regarding DCEO’s efforts in preventing and combating corruption and economic crime including money laundering as per its statutory mandate from the Prevention of Corruption and Economic Offences Act No. 5 of 1999 as amended and the Money Laundering and Proceeds of Crime Act No. 4 of 2008 since then, and highlights the way forward. Involving all Sectors of Society in the Fight: National Dialogue on Corruption 2013 saw for the first time in the history of Lesotho, the holding of a National Dialogue on Corruption attracting about 250 participants drawn from all key sectors of society: public service, legislature, judiciary, private sector and civil society consisting of non-governmental organisations, religious bodies and the media, under the theme: Harnessing Political Will to Fight Corruption

at All Levels of Leadership. The key objective of the Dialogue was to accord the stakeholders the opportunity to critically reflect on the problem of corruption as it affects Lesotho and the world at large, and map out strategies for intervention so as to tackle corruption effectively. The end-result of the Dialogue was the development of the National Anti-Corruption Strategy and Action Plan (NACSAP) framework whose main purpose is to provide a platform through which all the key sectors of society can define their roles in fighting corruption. The framework continues to be implemented currently, though the socio-political challenges that have seen the country hold general elections three times in a space of five years, in recent years, has impacted the effectiveness of the programme adversely. NACSAP’s implementing structure is called the National Coalition Against Corruption (NCAC). This has been accomplished with both technical and financial support from the United Nations Development Programme (UNDP),

NACSAP Workshop for the Judiciary Sector

the European Union (EU), and the United States of America (USA) Embassy in Lesotho, and lately, the African Development Bank (AfDB). In the meantime, the community-based anticorruption structures continue to exist as well, as part of the NACSAP framework: The District Anti-Corruption Committees (DACC), Business Action Against Corruption (BAAC), Systems Integrity Committees (SIC) and Students Integrity Associations (SIA). Making corruption a high risk and low returns activity: Corruption does not pay Many a time in the past criminals appear to have benefited from their acts of crime since they have enjoyed the proceeds even after serving jail sentences. Recently, the anti-corruption armoury has closed that gap by introducing Asset Forfeiture through civil litigation even before criminal prosecution is concluded. This was developed through the technical assistance of the Asset Recovery Inter-agency Network in Southern Africa

DCEO Headquarters in Maseru

(ARINSA). Through this strategy, DCEO has forfeited and auctioned property in the form of vehicles, buildings and sites of high value, that is, involving millions of maloti. This has been made possible by the Money Laundering and Proceeds of Crime Act No. 4 of 2008 that establishes the DCEO as the Anti-Money Laundering Authority, also establishing the Financial Intelligence Unit (FIU) based in the Central Bank of Lesotho though not part of the CBL. Otherwise the high profile cases that DCEO has investigated and put before courts of law continue to send a clear message that fighting crime is not about the social status of individuals, but that anyone committing crime is subject to investigation and prosecution without fear or favour as is reflected in DCEO’s Mission Statement. Way Forward There are lots of initiatives that DCEO is undertaking for intensifying its efforts in

Proceeds of crime confiscated through Asset Forfeiture

preventing and combating corruption key ones being as follows: • A national benchmark survey on corruption in Lesotho •

Strategic deployment of DCEO’s officers close to corruption prone processes of government ministries such as those involving tendering

•

Declaration of assets by Cabinet Ministers, Members of Parliament, Members of the Judiciary and Public Servants as provided for in the anti-corruption legislation

• Consolidating forensic investigation and prosecution capacity of the Directorate •

Strengthening both institutional and operational capacity of DCEO in terms of staff compliment, office accommodation, transport, and decentralizing DCEO services to regions and districts of the country.

Foreign Trade

& investment The mountain kingdom of Lesotho has a small domestic market and

focuses on strengthening regional links to boost its export potential while attracting higher levels of foreign direct investment. Rainbow trout farmed at Katse Dam - © LNDC Lesotho is a member of the Southern African Customs Union (SACU) and Southern African Development Community (SADC), and participates in a number of economic partnership agreements with various regional and international blocs. It is also part of the Common Monetary Area (CMA) which links South Africa, Namibia, Lesotho and Swaziland. The Basotho economy is closely integrated with that of its neighbour, South Africa, and the countries share a fixed exchange rate regime. Furthermore, South Africa remains Lesotho’s second-largest export destination as well as being its primary source of imported goods. The United States (US) serves as the main market for Lesotho’s textile exports, thanks to the preferential trade terms afforded by the African Growth and Opportunity Act (AGOA). Lesotho’s government is committed to promoting the private sector and attracting foreign direct investment (FDI), guided by the updated Companies Act of 2011 as well as various sectorspecific pieces of legislation. These cover mining, tourism and the industrial sector, with a particular focus on textile manufacturing. Structural reforms in agriculture have seen the removal of price subsidies and import controls on maize and wheat produce in favour of market-determined prices. Contributing around 15 percent to Lesotho’s Gross Domestic Product (GDP), the private sector is FOREIGN TRADE & INVESTMENT 16

presently still quite small as a result of factors such as the country’s limited market size, low levels of technology and restricted ICT capacity. There are nonetheless many ongoing initiatives to accelerate private sector growth, which include speeding up the implementation of the Companies Act as well as the Land Act.

THE BASOTHO ECONOMY

become an increasingly important industry in the past decade and a half, with its contribution to GDP rising from 0.1 percent in 1999 to around 9 percent in 2015. In addition to diamonds and textiles, large infrastructure projects like the second phase of the LHWP are expected to attract ever greater levels of investment in the medium to long term.

Lesotho’s economy is dependent on clothing and textiles, diamond mining, the export of water to South Africa, revenue from SACU, and workers’ remittances from South African mines. Between 2010 and 2014, growth averaged 4.3 percent. While the agricultural sector only accounts for some 5.7 percent of GDP at present – from around 20 percent in 1983 – it is the main source of income for the majority of the rural population.

Strategic development plans Lesotho’s National Strategic Development Plan II (NSDP II) will map out the country’s development agenda in the medium term, covering the 2017/18 to 2021/22 period. One of the most important objectives of the first NSDP (2012/13 to 2016/17) was to create the conditions necessary for high, shared and employment-creating economic growth, while developing key infrastructure across all economic sectors, especially in support of private sector investment and development.

Economic activity in the 1990s was driven by the construction boom which accompanied the first phase of the Lesotho Highlands Water Project (LHWP), an extensive water transfer scheme to supply the needs of South African industry. Around the turn of the millennium the manufacturing sector, specifically the textiles and apparel industry, took over as the principal source of foreign revenue and jobs. By 2002, it made up some 21.3 percent of Lesotho’s GDP peaking. Diamond mining has

The new NSDP will integrate emerging issues, national, regional and international policy commitments and programmes, particularly the United Nation’s Sustainable Development Goals (SDGs), the African Union (AU) Agenda 2063, and the SADC Regional Indicative Strategic Development Plan (RISDP). In addition, it will contain indicative costing of proposed activities and expansion of existing programmes, an analysis of the implications for sectoral resource allocation,

and mechanisms for effective monitoring and evaluation. As an active member of many regional groupings and their associated trade agreements, Lesotho has the scope to diversify both its export markets and products.

GLOBAL GROWTH The global upswing in economic activity is strengthening, with global growth projected to rise to 3.6 percent in 2017 and 3.7 percent in 2018, according to the International Monetary Fund (IMF) in its World Economic Outlook (WEO) report of October 2017. Notable improvements in investment, trade and industrial production, coupled with greater business and consumer confidence, are supporting the recovery. With early 2017 growth generally stronger than expected, upward revisions to projections are broad-based, and include the euro area, Japan, China, emerging Europe, and Russia, which offset downward revisions for the US, United Kingdom (UK) and India. After the disappointing global performance over the past few years, this recent pick-up provides an

ideal window of opportunity for policymakers to undertake critical reforms to stave off downside risks, raise potential output, and improve living standards more broadly. In the medium term, global growth is forecast to increase marginally beyond 2018, reaching 3.8 percent by 2021.

near term, growth is expected to rise gradually, but barely above population growth, as large consolidation needs weigh on public spending. The outlook for fuel-importing countries is generally brighter, with an aggregate growth rate of 3.9 percent in 2017, rising to 4.4 percent in 2018.

Among advanced economies, domestic demand and output grew faster in the first half of 2017 than in the second half of 2016. In the US, weakness in consumption in the first quarter turned out to be temporary, while business investment continued to strengthen, partly reflecting a recovery in the energy sector. In the euro area and Japan, stronger private consumption, investment, and external demand bolstered overall growth momentum in the first half of the year. Growth in most of the other advanced economies, with the notable exception of the UK, picked up in the first six months of 2017 from its pace in the second half of 2016. With growth in advanced economies projected to gradually decline toward potential growth rates of about 1.7 percent, further improvements in global performance are entirely driven by emerging market and developing economies.

The IMF has cut South Africa’s economic growth forecast for 2017 to just 0.7 percent, citing ‘rising political uncertainty’ as the main factor behind the cut, with the political situation having dented consumer and business confidence across the country. Growth is projected to remain subdued despite more favourable commodity export prices and strong agricultural production, with predictions of a slight improvement to 1.1 percent in 2018.

Robust growth is forecast in emerging market and developing economies, from an upwardly revised 4.3 percent in 2016 to 4.6 percent in 2017 and 4.9 percent in 2018. This forecast primarily reflects stronger projected activity in China and in emerging Europe for 2017 and 2018. While commodity importers account for the lion’s share of growth in emerging market and developing economies, the projected increase is driven mainly by higher growth in commodity exporting countries such as Brazil and Russia. However, while emerging Asian countries are generally growing at a fast pace, many of those in Latin America, SubSaharan Africa (SSA) and the Middle East continue to struggle with sub-par performances. The picture for the SSA region continues to be one of multispeed growth. While on a steadily rising trend from 1.4 percent in 2016 to projections of 2.6 percent in 2017 and 3.4 percent in 2018, there are sizable differences across countries. Downside risks have risen because of idiosyncratic factors in the region’s largest economies and delays in implementing policy adjustments. Beyond the

Lesotho’s economy in 2016/17 The slow and uneven global and regional recovery continues to have negative effects on Lesotho’s export potential. South Africa, the second largest economy in the Sub-Saharan region, exerts a major influence on Lesotho’s performance, and its persistent economic slowdown has cut employment prospects for Basotho mineworkers, as well as dampening Lesotho’s exports to that country and destabilising SACU revenues. From minimal growth of only 1.7 percent in 2015/16 and 2.1 percent in 2016/17, Government projects a recovery of economic activity averaging 3.4 percent over the medium term. This is based on rising agricultural production, which declined significantly in 2016 due to the El Niño climate effect, but is expected to recover substantially during the 2017/18 crop year. The mining sector is expected to post robust growth of around 17.3 percent in 2017/18 from 8.1 percent in 2016/17 as a result of the recapitalisation of Liqhobong Diamond Mine which has recently resumed full production. Thanks to increasingly diversified export markets for Lesotho’s textiles and apparel, the manufacturing sector also recorded higher growth, although exports to the US remain under pressure due to stiff competition from Asian producers. In the external sector, the overall balance of payments continues to indicate vulnerability to

external shocks. From a deficit of 8.6 percent in 2015/16, the current account balance is expected to worsen further in 2016/17 to 15.6 percent on account of a significant drop in SACU receipts and flat remittance income. While Lesotho is able to manage the deficit in the short term, this situation underlines the importance of transformation along with heightened production and export levels. Official international reserves were recorded at 4.5 months’ of import cover in 2016/17 from a high of 6.1 months in 2015/16. The deterioration came from lower SACU revenues and a draw-down on reserves to finance the large budget deficit in 2016/17. Reserves will deteriorate further to 4 months of imports in 2017/18, but should stabilise and begin to recover during 2018/19 and 2019/20 to Government’s desired policy benchmark of 5 months of imports in light of the bold steps being taken to control spending. Inflation in Lesotho is expected to average 6.6 percent overall for 2016/17, mainly due to increases in the cost of food and non-alcoholic beverages. The inflation rate is projected to decline marginally in 2017/18 to 6.3 percent. Future growth is anticipated The Central Bank of Lesotho (CBL) expects the country’s performance to recover over the 20172019 period, primarily because of rapid growth in the primary sector – particularly the mining subsector – which is being driven by higher production levels at two of the biggest diamond mines. While the secondary sector is expected to contract in the medium term due to completion of construction activities in some mining plants, the commencement of advance infrastructure relating to Phase II of the LHWP is expected to contribute positively to the sector in the longer term. The IMF estimates that Lesotho’s GDP will grow by 4.6 percent in 2017, and anticipates growth accelerating to 5.6 percent by 2021. Lesotho’s year-on-year consumer inflation rate registered 5.4 percent for both July and August 2017, compared with the 5.0 percent recorded

in June 2017.The acceleration in overall inflation comes against the backdrop of increased inflation in the ‘food and non-alcoholic beverages’ category, despite falling food prices across the southern African region.

INVESTING IN LESOTHO Lesotho’s free enterprise and free market economic system forms the basis for sustained development and growth, and the business environment is becoming ever-more investor-friendly. The legal framework is solid and based upon the rule of law, and there is full Government support on trade and investment issues. As regards the safeguarding of investments, with a score of 6.0, Lesotho ranks higher than both the Sub-Saharan and US averages (5.0 and 4.0 respectively) in the World Bank’s Index of Shareholders’ Power. Lesotho also does better than Sub-Saharan Africa in the Index of Investor protection, scoring 5.0 against 4.3. Being centrally situated in Southern Africa gives Lesotho access to a substantial consumer market in neighbouring South Africa as well as the more sophisticated transport and communication networks of its larger neighbour. There are good road connections to both the economic hub of Gauteng and the port of Durban on the Indian Ocean, and thus links to the wider international community, making it suitable for exportorientated manufacturing industries. Globally, Lesotho is ranked 39th out of 190 economies in the World Bank’s ‘Doing Business’ report for 2017 when it comes to the ‘Ease of Trading Across Borders’ indicator. Lesotho’s labour force is young, predominantly English-speaking, literate and well-motivated, with a tradition of manual dexterity at competitive wage rates. Serviced industrial sites, factory shells and commercial buildings are available for rental, and there are special incentives provided to investors who erect their own factories at designated sites. Backstopping services from the Lesotho National Development Corporation (LNDC) and a OneFOREIGN TRADE & INVESTMENT 17

Stop Shop for business brings together a streamlined and integrated suite of services for businesses and investors, and includes Trading and Manufacturing Licences, Import and Export Issuances, Residency Visas and Work Permits. Import and export procedures have been greatly improved in terms of number of procedures, length of time and cost. Current tax and financial incentives are as follows: • 10 percent corporate tax on profits earned by manufacturing companies exporting outside SACU • Manufacturing corporate tax rate of 10 percent on profits for intra-SACU trade • No withholding tax on dividends distributed by manufacturing companies to local or foreign shareholders • No advance corporation taxes paid by companies on the distribution of manufacturing profits • Training costs are allowable at 125 percent for tax purposes • Payments made in respect of external management skills and royalties related to manufacturing operations are subject to withholding tax of 10 percent • Easy repatriation of manufacturing profits • A VAT rate of 14 percent (ensuring harmonisation with the RSA) • Furthermore, the Lesotho Revenue Authority has introduced flexible VAT payment systems to tax compliant firms to ease cash flows Investment assets and constraints According to the United Nations Conference on Trade and Development (UNCTAD) in its 2017 World Investment Report, FDI inflows to Lesotho went from US $169 million in 2015 to US $132 million in 2016. FDI stock amounted to US $266.5 million (11.8 percent of GDP) in 2016 against US $251.0 million (10.6 percent of GDP) in 2015. In addition, the World Bank and the International Fund for Agricultural Development (IFAD) have invested over US $24.46 million since March 2012 to benefit more than 370 farmers, most of them women. Further investment climate reforms are regarded by Government as the foundation for attracting higher levels of private investment. UNCTAD is working with Government to develop an investment FOREIGN TRADE & INVESTMENT 18

policy to enable Lesotho to market itself as an investment hub.

• Infrastructure and construction • Mining and other resources

departments and parastatal organisations in order to speed up service delivery.

Current constraints to investment include high port authority expenses resulting from Lesotho being a landlocked territory, and the comparatively low quality of its infrastructure, not to mention a degree of political uncertainty in recent times. Nonetheless, Lesotho’s fundamental assets, such as its skilled labour force, high rates of productivity, and potential-laden tourism industry remain compelling strengths for the wider business community.

There are a number of investment opportunities currently available in Lesotho. Basotho Canners in Masianokeng, Maseru, is looking for a Joint Venture (JV) investment partner to operate the agro-processing facility on a management contract basis to produce and export products such as baked beans, juice, mixed vegetables, peaches and asparagus. The project cost is estimated at US $30 million.

The LNDC offers pre-investment and after-care services to both prospective and existing investors as an expedient means of simplifying and shortening the processes related to investment. Examples include facilitating the procurement of all permits and licenses, as well as providing assistance with company registration. Investment project appraisals are undertaken, along with equity participation in projects considered to be of strategic importance to the national economy and demonstrating longterm viability. Subsidies are given to investors wishing to construct their own industrial buildings at LNDC-serviced sites.

Lesotho improved its position in the World Bank’s ‘Doing Business’ rankings by 12 places between 2016 and 2017.

INVESTMENT OPPORTUNITIES Traditionally, areas which have attracted the greatest investment include large infrastructure projects like the LHWP, and initiatives that aim at developing the hydroelectric power industry will likely attract new investors in the coming years. Lesotho’s textiles and garments subsector is another potent attractor of investors, who come mainly from South Africa and South-East Asia, with the country’s dutyfree access to the US under AGOA having been extended until 2025. The mining industry also brings in a great deal of FDI. Foreign direct investment in priority sectors is encouraged, with preference given to joint ventures for sustainability and developmental purposes. The spotlight is on activities that contribute to the diversification of Lesotho’s industrial base to include manufacturing other than textiles and apparel. Government directs development to areas where Lesotho has a comparative advantage and therefore stands a chance of competing with the rest of the world, and the LNDC has identified the following priority subsectors: • Agro industry • Manufacturing • Services • Adventure and eco-tourism • Renewable energy

A further project involves the development of the world’s highest altitude eco-distillery for the production of spirits from Agave and other sources; as well as a 20-bed, four-star boutique hotel with an on-site spa and events venue. The project has substantial and experienced partners operating at the regional and international level, and seeks an investor, potentially with experience in the sector, to provide the necessary capital. The Lesotho National Broadband Network (NBN) Initiative requires a telecommunications infrastructure investor to partner with the LNDC and telecommunications service providers. The objective of this US $150 million project is to expand telecommunications infrastructure and make it available on an Open Access, nondiscriminatory and uniform pricing basis to a large number of service providers in the industry. Another ICT project, the US $300 000 Lesotho Call Centre initiative requires a technical partner for project development and investment.

LESOTHO NATIONAL DEVELOPMENT CORPORATION Operating under the auspices of the Ministry of Trade and Industry, the Lesotho National Development Corporation (LNDC) strives to facilitate economic growth and development in the kingdom while promoting it as an attractive investment destination to foreign and local investors. In addition to a robust Governmentadministered incentive regime, the LNDC enjoys clear channels of communication with relevant state

Factory inspections are conducted to assess workplace circumstances and thereby ensure harmonious relations between employers and employees, as well as investor-compliance with the country’s labour laws. A specifically-designed checklist of all labour-related issues facilitates prompt detection and intervention where necessary. The corporation administers the Partial Credit Guarantee Scheme, where the commercial banks provide loan guarantees (on a 50/50 risk sharing basis) to entrepreneurs who wish to start or expand medium to large businesses but do not have sufficient collateral/security. Furthermore, the launch of the M20 million Supply Chain Finance facility, one of the four components of LNDC’s Enterprise Development Facility (EDF), is an important step. The Supply Chain Finance facility is set to boost the production and export capacity of local firms by providing Basotho-owned enterprises with access to credit finance. The facility consists of three solutions, one of which is invoice factoring, where the LNDC buys up to 80 percent of the value of an outstanding invoice of a firm at a prime linked rate, thereby addressing the problem of cash flow. Firms qualify as Basotho-owned provided at least 75 percent of their shares are locally owned. Contract financing will involve the LNDC helping firms to raise up to 70 percent of the capital needed to execute a secured contract. The corporation will also issue a pre-approval letter on behalf of a firm

seeking financial backing in order to compete in a specific tender.

Trade agreements Lesotho has signed a number of trade agreements which afford expanded access to regional and international markets. In addition, its status as a Least Developed Country (LDC) in the World Trade Organisation (WTO) gives it duty-free access to the markets of industrialised countries. The Enhanced Integrated Framework (EIF) is an aidfor-trade partnership for LDCs that supports such countries in being more active in the global trading system by helping them to address supply-side constraints to trade.

The LNDC was one of the winners at the UNCTAD Investment Promotion Awards at the World Investment Forum in Nairobi, Kenya, in July 2016. The Corporation was honoured for its instrumental role in forging effective collaboration with strategic partners, in particular the Industrial Development Corporation of South Africa and the China-Africa Development Fund, to promote investment in strategic projects in infrastructure, agriculture, energy and manufacturing. Its efforts have attracted investment in renewable energy and in rural areas. Promoting investment and competitiveness LNDC is a member of the Africa Investment Promotion Agency Network (AfrIPANet). This is a programme developed by the United Nations Industrial Development Organisation (UNIDO), with the aim of providing investment promotion agencies with up-to-date and accurate investor survey information, thus enabling them to readjust investment promotion interventions in areas expected to bring the most impact in terms of linking domestic investment to FDI. Additionally, the LNDC has joined forces with the USAID-Southern African Trade Hub to increase international competitiveness of the regional textile and garment industry. Textile and garment manufacturing companies need to be certified under the Worldwide Responsible Accredited Production (WRAP), which looks at whether factories are compliant with international standards in terms of child labour and forced labour, health and safety, harassment and abuse, discrimination, hours of work, compensation and benefits, and freedom of association. LNDC led a delegation of private sector representatives, including senior officials from the African Development Bank, to the second Japan-Africa Business Forum in Tokyo, Japan, from 25 to 26 July 2017. Forums such as these provide opportunities for business partnerships and networking between Africa, the Japanese business community and other Asian investors.

Yarn being woven into denim fabric. © Anne Wade The focus of the Japan-Africa forum was on energy and power, agriculture and agribusiness, infrastructure, trade and industrialisation, health and sanitation. Ongoing initiatives being undertaken with support from the Japan International Cooperation Agency (JICA) include solar energy installations at Moshoeshoe I International Airport, equipment supply to Moshoeshoe I meteorological stations, hydrological stations to measure flow in various rivers in Lesotho, as well as mobile water treatment plants for purification of water and distribution to rural areas. Turkey is set to open an embassy in Maseru; a move which will strengthen diplomatic ties, increase the level of development cooperation and boost economic partnerships.

TRADE & MARKET ACCESS Regional integration is of prime importance, given Lesotho’s small size and geographical position within the larger economy of South Africa. Benefits to this relationship include ready access to its neighbour’s excellent transport network, technology, expertise, goods markets, investment resources and capital and financial markets.

To take full advantage of these opportunities, Lesotho has been involved in the upgrading of border post facilities and access roads, and the establishment of a dry port. Furthermore, it has undertaken several initiatives in the form of bilateral, sub-regional and regional agreements to facilitate regional trade relations. These include a Joint Bilateral Commission on Cooperation between Lesotho and South Africa on issues of infrastructure and transport. The Lesotho Revenue Authority’s Asycuda customs border control system is part of the broader Customs Modernisation Programme meant to simplify clearing processes and reduce the costs of doing business, while also reducing levels of corruption at the border and increasing revenue collection. The system entails non-intrusive methods of inspections, such as the use of X-rays to scan goods and baggage at both the border and airport. Trade facilitation is of prime importance in lowering cross border transaction and transport costs for a Land Locked Developing Country (LLDC) such as Lesotho. The LLDC group lobbies for special consideration to be shown to exportdriven countries lacking their own direct sea-freight facilities.

Along with South Africa, Botswana, Namibia and Swaziland, Lesotho is a member of the Southern African Customs Union (SACU), which is the oldest functioning customs union in the world, having been established in 1910. SACU is the regional framework for trade cooperation, and seeks to maintain the free interchange of goods between member countries and provide a common external tariff for the common customs area. Lesotho’s products therefore enjoy duty free access to a market of more than 55 million consumers with a combined GDP of over US $300 billion (M4.291 trillion). Countries in the common customs area are able to negotiate new Free Trade Area (FTA) agreements with third parties as a bloc. The 2009 Preferential Trade Agreement (PTA) between SACU and the Common Market of the Southern Cone (MERCOSUR) comprises Argentina, Brazil, Uruguay and Paraguay – one of the world’s largest economic blocs with a combined GDP of roughly US $2.4 trillion. The PTA entered into force on 01 April 2016 and covers some 1 100 product lines. Furthermore, negotiations are underway for a PTA between India and SACU. The agreement between SACU and the European Free Trade Area (EFTA), made up of Switzerland, Norway, Iceland and Liechtenstein, covers trade in industrial goods (including fish and other marine products) and processed agricultural products, and provides for future non-binding engagements on additional issues. Lesotho can also export all products to the EU (500 million consumers) duty-free under the SACU Economic Partnership Agreement (EPA). FOREIGN TRADE & INVESTMENT 19

The US and SACU signed a Trade, Investment and Development Cooperative Agreement (TIDCA) in 2008. The TIDCA is a cooperative framework agreement that makes provision for the two parties to negotiate and sign agreements relating to a wide range of trade issues, with a special focus on customs and trade facilitation, technical barriers to trade, sanitary and phytosanitary (SPS) measures, and trade and investment promotion. The US has historically proven a ready market for Lesotho’s exports of apparel. The African Growth and Opportunity Act (AGOA) provides eligible African countries with duty and quota-free access to the US market of some 320 million consumers. Lesotho, which has been exporting to the US under AGOA since 2001, is allowed to utilise third-country textile inputs because of its LDC classification. Lesotho’s total exports under AGOA in the year ending September 2016 were worth US $288.471 million. About 40 000 jobs in Lesotho depend directly on AGOA, while the programme additionally provides indirect benefits to a further 120 000 citizens. Lesotho is a member of the Southern African Development Community (SADC), a grouping of 15 countries with a combined population of some 333 million and a cumulative GDP of US $573.597 billion. Other members of SADC include South Africa, Zimbabwe, Zambia, Malawi, Tanzania, Madagascar, Mauritius, Seychelles, Angola, Democratic Republic of Congo, Namibia, Botswana, Swaziland and Mozambique. IntraSADC trade is governed by the SADC Protocol on Trade, while extra-regional trade is aligned with both the WTO negotiated tariff liberalisation process as well as bilateral and/or inter-regional trade arrangements. The SADC FTA has been fully implemented since 2012, with 92 percent of product lines traded at zero percent. The FTA is one of the first milestones towards regional integration and a common market. Two key developments during the past year have been the approval of the SADC Industrialisation Strategy and Roadmap, and the finalisation of the FOREIGN TRADE & INVESTMENT 20

Revised Regional Indicative Strategic Development Plan (RISDP) 2015-2020. The revised RISDP recalibrates the regional integration agenda, prioritising, among others, industrial development, and emphasising the realignment of existing priorities with resource allocation in terms of their relative importance and greater impact on regional integration. More recently an agreement was reached on a SADC Regional Development Fund to support regional integration. Entered into on a provisional basis on 10 October 2016, the EPA between the EU and six SADC countries, including Lesotho, grants free access to the European market while allowing member states to maintain tariffs on products sensitive to international competition; a strategy known as asymmetrical liberalisation. In exchange, these countries are removing custom duties on 86 percent of EU imports. The agreement is contingent on the provisions in Article 2 of the EPA, which include respect for human rights, rule of law and democracy. The first meeting of the joint Trade and Development Committee took place from 16-17 February 2017. Total SADC EPA group exports to the EU are around €31 billion, while EU exports amount to some €33 billion. Lesotho, as well as fellow SADC members South Africa, Botswana and Namibia, exports large quantities of diamonds to the EU. At the same time, the EU exports a wide range of goods to these countries, including vehicles, machinery, electrical equipment, pharmaceuticals and processed food. There is potential to develop the services sector in Lesotho, and the EPA provides for cooperation in this area as well.

26 countries with a total GDP of US $1.6 trillion and a population of over 625 million, stretching from the Cape to Cairo. The TFTA will encompass half of Africa in terms of membership, economic and geographical extent, and serve as the foundation for Continental Free Trade Area (CFTA) negotiations. Lesotho’s products also benefit from preferential market access to the Australian market of 22 million consumers, with products entering either duty-free or at reduced rates of duty. Under the GSP system, a long list of products (excluding dairy, poultry and eggs) have been granted duty-free entry to Canada with its population of 34 million people. Furthermore, close to 100 percent of Lesotho’s industrial products, including textiles and clothing, can be exported duty and quota free to Japan with its 127 million consumers. Lesotho’s products are eligible for duty free access to New Zealand in terms of a GSP scheme introduced in 1972, while Turkey also provides duty free access for Lesotho’s industrial products. In conjunction with her regional partners, Lesotho is keen to foster closer economic ties with Asian countries, including China, India and Pakistan, creating new opportunities for product and market diversification.

Lesotho is one of 26 countries to participate in the Tripartite Free Trade Area (TFTA) between SADC, the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA), which was launched in June 2015. Negotiations are ongoing, and as of October 2017, 24 countries (including Lesotho) had signed the Declaration while 21 had signed the Agreement and two had also ratified it. The Agreement requires 14 ratifications to enter into force.

Southern African Trade Hub The Southern African Trade Hub (SATH) works with Lesotho to improve standards and facilitate exports, enhancing the investment climate and increasing trade in textiles and apparel. The Trade Hub has been asked by the US Embassy in Lesotho and USAID to provide technical assistance to Lesotho’s Ministry of Trade and Industry in designing and delivering training courses on capacity building as a means of helping the country comply with the WTO agreement on trade facilitation. The Hub has also been requested to provide forums for Government to fully engage with the private sector in the development of a national trade policy for Lesotho, as well as the establishment of a national body for tariff and trade remedy investigations.

Once the TFTA is fully operational, it will usher in a single tripartite policy framework covering

Under USAID’s Partnership for Trade Facilitation (PTF) programme, SATH has assisted the Lesotho

Department of Standards and Quality Assurance (DSQA) to set up an effective WTO Technical Barriers to Trade (TBT) National Enquiry Point (NEP) by purchasing essential IT equipment and office furniture as well as conducting training. The NEP serves as a reference collection of technical regulations, standards, and certification procedures. The Hub also provided technical assistance to improve the standards development process; strengthen the legal and regulatory framework; and enhance outreach and communication efforts to ensure that the private sector is more aware and involved in standardisation activities. The Trade Hub’s Strategic Partnership Fund supports interventions to catalyse rapid and inclusive economic growth across the region, with potential partners including the private sector, associations and cooperatives, MSMEs and regional businesses. The Hub supported Lesotho in developing an Investor Roadmap that identified the most critical and significant constraints on stimulating investment and enhancing economic growth in the country. SATH has subsequently undertaken annual audits on the implementation of the Investor Roadmap to provide further recommendations for investment climate reforms. In partnership with the LNDC and the Department of Policy and Strategic Planning, the Trade Hub conducted an Investor Roadmap audit during 2015 and developed an Investor Climate Reform Communications Strategy to communicate Lesotho’s progress to implementers, the private sector and other intended beneficiaries. SATH has been involved in technical assessments (social compliance, production capacity) of 18 companies to promote technology and investment in Lesotho. These include: • MAGIC trade show – 3 pre-MAGIC workshops • Collaboration with the other two trade and investment hubs on the Africa Pavilion • Source Africa 23-25 May 2017 • Saitex 25-27 June 2017 • Origin Africa 25-29 September 2017

Commerce, Industry & Mining Lesotho’s upward growth trajectory is being driven by renewed private sector activity, along with steady growth in manufacturing as demand from regional markets rises, and encouraging prospects from the everexpanding diamond mining sector.

© LNDC In 2016, real growth was largely driven by the tertiary sector, which grew by 4.5 percent and currently makes up some 55 percent of Lesotho’s Gross Domestic Product (GDP). This performance was underpinned by expansion in wholesale and retail trade, restaurants and hotels, transport and communications, financial intermediation, real estate and business services, public administration, education, health and social work, and community, social and personal services. The secondary sector also recorded positive growth, although activity in the manufacturing subsector slowed. Growth was buoyed by the depreciating exchange rate, increased demand in the food and beverages subsector, and new entrants in the textiles and clothing industry from Swaziland following its exclusion from the African Growth and Opportunity Act (AGOA). The primary sector, comprising mining and agriculture, was another driver of growth during 2016. Most activity was registered in the mining and quarrying subsector, which expanded by 9.6 percent and is forecast to grow by 25.7 percent in 2017 and 7.0 percent in 2018. Increased output at Storm Mountain Diamonds’ Kao Mine and the completion of the Liqhobong Mine, coupled with diamond beneficiation activities, underlie these projections.

The mining and quarrying sector’s share in GDP has increased to 8.9 percent, up from 6.5 percent in 2010, boosted by the discovery of high-quality diamonds and the use of new technology.

PRIVATE SECTOR GROWTH Lesotho’s private sector is relatively small, contributing around 15 percent to GDP. It is characterised by medium, small and micro enterprises (MSMEs) and affiliated business associations requiring financial and technical support and training across all economic sectors. Despite Lesotho’s challenges in recent years there is an emerging dynamism in the private sector which, combined with a rehabilitated government, could place Lesotho on an upward growth trajectory. The aim of the next National Strategic Development Plan, which kicks off in 2018/19, will be to consolidate the efforts of the private and public sectors to focus on sustainable growth and job creation. Commitments in the 2017/18 national budget focus on re-launching dialogue with the private sector in a collaborative effort to accelerate investment, economic growth and job creation. This social compact will define the specific roles to

be played by the private sector, civil society, local government councils and the central government, and will determine modalities for mutual accountability. The Financial Inclusion Strategy (discussed later under the Financial Services, Insurance and Investment chapter) will also be a vital element in rekindling private sector growth. In support of further private sector development, the Ministry of Trade and Industry is undertaking trade and market access facilitation, developing additional industrial infrastructure at Tikoe and Ha Belo, and establishing national standards and quality infrastructure and offices. The Ministry is also presenting the Business Licensing and Registration Bill, the Competition Bill, and Trade and Tariff Administration Bill to Parliament. When passed, these bills will simplify trade licensing, reduce uncompetitive business behaviour, and consolidate the administration of tariffs under the Southern African Customs Union (SACU) Agreement. A sum of M194.8 million was set aside for the Ministry in the 2017/18 financial year. Of this amount, M1.2 million is allocated for the establishment of the Lesotho Standards Institution and M31.895 million for national standards and quality infrastructure. Furthermore, the operationalisation of online company registration has been achieved and One-Stop Business

Facilitation Centre (OBFC) services have been rolled out to Maputsoe. The continued roll-out of OBFCs is taking place in 2017/18 with M5.688 million having been budgeted for this initiative. Private Sector Competitiveness and Economic Diversification Project Spearheading economic diversification, enterprise assistance and investment climate reform, the World Bank-funded Second Private Sector Competitiveness and Economic Diversification Project (PSCEDP II) was launched during 2014. The PSCEDP II aims to spur the development of selected non-textile sectors, resulting in increased private sector investment, growth and job creation. This is being achieved through improving the business environment, enhancing access to finance, supporting investment promotion activities in new sectors, and strengthening linkages to domestic MSMEs. A key aspect of the PSCEDP II concerns improving economic diversification in the economy through targeted support to new growth sectors such as horticulture and tourism. In the first quarter of 2017 the World Bank approved an additional US $13.4 million in financing support under PSCEDP II for continued facilitation of reforms to reduce the time and cost associated with doing business in Lesotho. Other objectives comprise: providing easier access to finance, making trading across borders simpler, COMMERCE, INDUSTRY & MINING 21

and supplying streamlined, accessible and efficient government-to-business services in order to attract private investment and boost growth. Credit extended to the business sector increased by 6.5 percent during the first quarter of 2017, with the biggest expansion being recorded in the mining and manufacturing sectors. Under PSCEDP II, Lesotho’s business environment has improved markedly, particularly access to credit. In addition, initiatives to boost private sector diversification have yielded positive results, and the expanded horticulture hub has earned Global GAP certification. One of the current objectives is to establish a Cabinet-level investment climate reform process similar to that under the job summit process. Improving the business environment Thanks to a concerted programme of business reforms, Lesotho’s ranking in the World Bank’s ‘Doing Business’ report now stands at 104th out of 190 countries – 8 places higher than in 2016, and substantially better than the regional average. The country fares comparatively well in the ease of ‘Starting a Business’, where at 119th it is ranked higher than Botswana (153rd), South Africa (136th) and Namibia (172nd). On average, it takes seven procedures, 29 days, and costs 7.7 percent of income per capita to start a business in Lesotho. Reforms which underlie this improving scenario include the creation of a one-stop shop for company incorporation in 2013 and elimination of the requirements for paid-in minimum capital and for notarisation of the articles of association. Lesotho’s particular strengths in the 2018 Doing Business report include ‘Trading Across Borders’ (40th) and ‘Enforcing Contracts’ (95th); scoring better in both indicators than top regional business destinations such as South Africa and Botswana. Lesotho also does well in the ‘Getting Credit’ indicator, where it is placed 77th. Areas where the country still faces challenges are in indicators such as ‘Resolving Insolvency’ (124th), ‘Dealing with Construction Permits’ (167th), and ‘Getting Electricity’ (152nd). COMMERCE, INDUSTRY & MINING 22

Between 2017 and 2018 Lesotho’s ranking in ‘Ease of Getting Credit’ improved from 82nd to 77th place, putting it on a par with Botswana. In the past several years, Lesotho has made transferring property easier by streamlining procedures and increasing administrative efficiency, strengthened investor protection by increasing the disclosure requirements for related-party transactions, and improved the liability regime for company directors in cases of abusive related-party transactions. It has also made enforcing contracts easier by launching a specialised commercial court. Access to credit information has been enhanced through the establishment of the country’s first credit bureau, and credit bureau coverage is constantly being expanded.

BUSINESS FACILITATORS Economic growth in the country is encouraged by the Lesotho National Development Corporation (LNDC), which initiates, promotes and facilitates the development of manufacturing and processing industries, mining and commerce, in a manner calculated to raise levels of income and employment. Supported by a Governmentadministered incentive regime, LNDC enjoys clear channels of communication with relevant departments and parastatals in order to speed up service delivery, and has had success in attracting labour-intensive manufacturing enterprises. The LNDC also provides pre-investment and after-care services to both prospective and existing investors to help simplify and shorten the processes related to investment. Examples include facilitating the procurement of all permits and licenses, as well as providing assistance with company registration. Investment project appraisals are undertaken, along with equity participation in projects considered to be of strategic importance to the national economy and demonstrating long-term viability. The Corporation collaborates with South Africa’s Industrial Development Corporation (IDC) on matters of mutual benefit, such as capacity building, technical assistance, economic research, project financing, co-investment in projects and exchange

of information for strategic cooperation regarding delegation visits and business symposiums. There have also been consultations with the IDC and African Development Bank to secure lines of credit to finance new investment projects and to capitalise a new equity financing scheme for local entrepreneurs. The LNDC is involved in offering training, which it undertakes through an Industrial Attachment Scheme. This exposes Basotho graduates to opportunities within the country’s various industrial sectors as well as enabling them to gain the requisite practical skills to prepare them for the job market. The Ministry of Trade and Industry is currently focused on restructuring and/or improving the capacity of business development support institutions to enhance service delivery and institute mechanisms for improved coordination. In this regard, a consultant has been engaged to revise the LNDC mandate and re-engineer organisational business processes and systems, as well as finalising the amendment of the LNDC Act The Lesotho Revenue Authority (LRA) Business Partnership Forum, which was launched in October 2011, creates a platform for business people to discuss issues related to tax as well as the promotion of the business sector in Lesotho. Its objectives are, among others, to serve as a platform through which the LRA Customs Department and the business community can forge strong partnerships to educate people in business about the need to foster customs compliance. This has seen the development of the Preferred Trader Scheme under the Customs Modernisation Programme and the roll-out of the ASYCUDA World System. Launched in 2009, the Private Sector Foundation of Lesotho (PSFL) is the umbrella body for the private sector in the country. Its overall objective is to promote and ensure sustained dialogue between Government and the private sector as well as to facilitate the promotion and development of a dynamic private sector.

ENTREPRENEURSHIP The limitations of the public sector in creating productive and sustainable jobs has seen the

Lesotho Government intensify its focus on developing conditions, frameworks, institutions and facilities that support entrepreneurship. This is particularly aimed at the country’s youth, who need to be equipped with the requisite skills to make them internationally competitive in product and labour markets. Business opportunities that make optimal use of Lesotho’s own resources and generate work throughout the country are promoted, and Basotho are also encouraged to become involved in productive and export-oriented industries, and engage in joint ventures with foreign investors to facilitate the transfer of skills and technology. Medium, Small and Micro Enterprises The role played by entrepreneurship in promoting economic development in general and industrialisation in particular cannot be underestimated, and Micro, Small and Medium Enterprises (MSMEs) are currently the pillar of the Basotho economy. The MSMEs Policy has been produced as a framework and strategy to guide the development of such enterprises and build their productive capacities. Revisions are also being made to the Cooperatives Societies Act, with the objective of formulating a plan to capacitate both cooperatives and MSMEs to raise their contribution to economic growth and development. The Ministry is focusing on strengthening the competitiveness of both MSMEs and cooperative societies, facilitating entry to markets for their products and services. This includes enhancing access to credit from commercial banks while ensuring growth and sustainability of businesses through training on product development, business management and quality and standards assurance. Feasibility studies to determine the viability and sustainability of various enterprises are being undertaken. The PSCEDP II has financed the Lesotho Enterprise Assistance Programme (LEAP) to enable it to provide business development support to more than 130 MSMEs. Moving forward, LEAP will offer funding for equipment in addition to business support, deepening the impact of the programme. In recognition of their important role in future growth, the Ministry of Small Business Development, Cooperatives and Marketing has

committed M211.9 million to MSMEs in the 2017/18 financial year to increase job intake in these enterprises and expand business opportunities for the youth. This entails promotion and support to establish cooperative enterprises, construction of market centres and slaughter houses, and refurbishment of BEDCO estates and the Lesotho Cooperatives College. Financial support for enterprise Established in 2011, the Partial Credit Guarantee Scheme (PCGS) is aimed at addressing the challenge of access to finance for local entrepreneurs by providing them with a guarantee of 50 percent on their business loans with local commercial banks. To benefit from the scheme, prospective entrepreneurs are required to submit their business plans to any of the participating banks to obtain loans. Modifications have been made to the policy guidelines of the PCGS to accommodate not only priority sectors, but a wider spectrum of sectors

including retail and services. While the upper limit of M5 million has remained the same, the lower limit of M200 000.00 was removed to allow banks to lend smaller amounts. The Partial Credit Guarantee Fund (PCGF) helps Basotho-owned enterprises access finance from banks without having to put up collateral. An amount of M50 million was set aside for the scheme, and by mid-2017 the fund had assisted Basotho with M35 million in financing, benefiting 240 businesses. It was announced in October 2017 that the Ministry of Small Businesses Development, Cooperatives and Marketing had been awarded M10 million of the PCGF, which is accessible to Basotho through the Lesotho Post Bank. Launched in 2017, the LNDC’s M20 million Supply Chain Finance facility was created to provide access to credit finance to facilitate the development of Basotho-owned enterprises – that is, those in which at least 75 percent of shares are owned by Basotho. The facility consists of three

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solutions, one of which is invoice factoring, where the LNDC buys up to 80 percent of the value of an outstanding invoice of a firm at a prime-linked rate, thereby addressing the problem of cash flow. Contract financing involves the LNDC helping firms to raise up to 70 percent of the capital needed to execute a secured contract. Furthermore, the LNDC will issue a pre-approval letter on behalf of a firm seeking financial backing for the purposes of competing in a specific tender. Basotho Enterprises Development Corporation The Basotho Enterprises Development Corporation (BEDCO) was set up in 1975 as a subsidiary of the LNDC and established as a parastatal in 1980 in order to assist in developing indigenous Basotho-owned business enterprises, with particular emphasis on small-scale businesses and the promotion of entrepreneurial skills. BEDCO assists MSMEs in business counselling; discovering, evaluating and formulating viable projects for financing by local financial institutions;

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providing manufacturing and technical assistance to small-scale enterprises; training entrepreneurs in skills to facilitate their employment in the construction and textile industries; and supplying business training courses. BEDCO is also engaged in supplying real estate services, with commercial and industrial rooms and units available for rental in a variety of locations, including industrial parks and the BEDCO Commercial Centre. BEDCO partners with local organisations such as the Mineworkers Development Agency (MDA), Lesotho National Development Corporation (LNDC), Action Lesotho and many others in order to utilise limited resources for the benefit of enterprise development. Furthermore, the corporation has emerged as a partner of choice among business development organisations from neighbouring countries, such as the Small Enterprise Development Agency (Seda) of South Africa, Local Enterprise Authority (LEA) of Botswana and Small Enterprises Development Company (SEDCO) of Swaziland.

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Furthermore, BEDCO has entered into a partnership with the LRA and commercial banks to ensure they contribute towards the setting up of small businesses. Established links with other financing institutions such as IDC of South Africa have played an important role in enterprise development. Ongoing programmes and projects include: ‘Ichorise Mohoebi’, which is a national entrepreneurial capacity building initiative focusing on starting, operating and growing a business; ‘Iketsetse’, which endeavours to promote rural-based productivity; Corporate Enterprise Development Investment, which taps into the corporate social investment (CSI) funds of large corporates for the benefit of MSMEs; the Creative Industries Empowerment Project, which develops markets for Basotho-made products such as mosaics, pottery, jewellery and handicrafts; and ‘Qhotsiso’, a business incubation programme. The Sebaboleng Woodwork Incubator Project is focused on developing the entrepreneurship skills of people who possess operational skills in carpentry and aspire to start businesses but lack the necessary capital and skills to do so. Launched in 2016, the 2nd Bacha Entrepreneurship Project represents a collaboration involving BEDCO, the LRA and Standard Lesotho Bank, with the goal of assisting young unemployed graduates between the ages of 21 to 35 to become employers and drivers of economic growth by developing their entrepreneurial skills. The project calls for viable, sustainable and profitable business proposals that will be financed for a combined startup capital of M500 000.00. A five-year Memorandum of Understanding (MoU) signed between the LNDC and BEDCO in 2015 focuses on developing MSMEs through sharing research information and building the technical capacity of BEDCO to effectively deliver on its mandate. The agreement also enables MSMEs supported, monitored and mentored by BEDCO to have access to LNDC development finance services, and ensures coordinated efforts in building the skills capacity of personnel involved in enterprise development. In October 2017 BEDCO unveiled four enterprise development programmes meant to tackle the high COMMERCE, INDUSTRY & MINING 24

unemployment rate: Job Creation Acceleration through SMME Development, which aims to create over 200 new jobs over a period of six months by tapping into the potential of small enterprises; the revamped ‘Ichorise Mohoebi’ entrepreneurship capacity building initiative; Global Entrepreneurship Week; and a programme seeking to foster the development of creative arts and crafts among Basotho.

MANUFACTURING Lesotho’s most important manufacturing subsectors comprise textiles and garments, food and beverages, automotive components, plastic products, consumer electrical and electronic appliances, packaging material and garment accessories such as zipper and buttons. While manufacturing remains the main engine of growth in Lesotho, its contribution to GDP has dropped from a high of some 21.3 percent in 2002 to 14.1 percent in 2010 and 10.7 percent at present. The fortunes of the sector are closely aligned to those of the textiles and garments subsector. The Central Bank of Lesotho (CBL), in its annual report of 2016, estimates that the manufacturing subsector grew by 3.6 percent in 2016 compared with growth of 2.4 percent in 2015; driven by improvements in ‘food products and beverages’, ‘textiles, clothing, footwear and leather’, as well as ‘other manufacturing’. Textiles, clothing, footwear and leather products grew by 3.9 percent in 2016, while food products manufacturing also expanded as a result of increased demand. The global recovery in manufacturing and trade, together with buoyancy in global financial markets, augurs well for Lesotho’s garment exports, despite increased competition from Asia and elsewhere in Africa. The manufacturing sector remained the largest employer in the economy during 2016. Employment by LNDC assisted companies declined to 47 054 in December 2016 from 48 693 in December 2015, mainly because of the poor performance of woven garments factories, which recorded an 8.1 percent decline in 2016 owing to

subdued demand. Conversely, employment rose in the knit garments, footwear and fabrics/yarn industries where prospects were more encouraging. In the first quarter of 2017, employment by LNDC-assisted companies increased by 0.3 percent. This was underpinned by broad-based growth in the ‘hotel & accommodation’, ‘footwear’ and ‘food & beverages’ subsectors, while ‘woven garments’ and ‘retail’ continued to shed jobs. The further development of manufacturing is of the utmost importance to the Ministry of Trade and Industry. Medium-term development aims include: • Developing industrial clusters for identified sectors which have the potential to drive growth and facilitate the adoption of appropriate technology for industrialisation. • Securing a suitable site and the services of a consultant to draw up plans for the construction of laboratories and offices to house the proposed national quality assurance entity.

TEXTILES, CLOTHING & FOOTWEAR Manufacturing is dominated by textiles and apparel firms, which have flourished under the provisions of the African Growth and Opportunity Act (AGOA), making the subsector one of the main drivers of growth and export earnings since the 1990s. It has also been a major job creator, in particular for lowskilled Basotho, mostly women, who in the past were excluded from formal employment. While investment has come primarily from Taiwanese and Chinese companies, there have also been entrants from South Africa and, more recently, Swaziland, following the latter’s loss of AGOA benefits. The contribution of the industry to Lesotho’s economy goes beyond the sector itself, as there are important employment and economic multipliers. A range of formal/informal activities occur that feed into or off the industry; such as small packaging industries, road freight transporters, courier services, clearing agents, security, passenger transport, traders that sell food to workers, residential accommodation, water, electricity and telecommunication utilities. Lesotho’s labour laws enshrine all aspects of

the ILO’s core conventions, regulate maximum working hours, and guarantee minimum paid leave. While the application of these laws is regulated by the inspectorate of the Ministry of Labour and Employment, many retailers and brands (including Levi Strauss, The Children’s Place, Gap, etc) that source garments from Lesotho also monitor factory conditions. In 2016 a donor-driven ILO initiative ‘Betterwork Lesotho’ wrapped-up an eight year programme involving factory compliance with local and global standards. Currently, six local factories (all United States exporters) have Worldwide Responsible Apparel Production (WRAP) accreditation. A snapshot of the industry By the end of 2016, the textiles, clothing and footwear subsector comprised the following elements: • 1 Textile firm providing 1 220 jobs and producing 18 000 tonnes of yarn and 15.6 million linear metres of fabric per year • 9 Denim (woven bottoms) firms employing 13 124 workers and producing 23.304 million garments annually • 4 Non-Denim Woven Fashion firms with employment of 1 580 and production of 6.360 million garments every year • 6 Industrial Workwear firms providing 4 696 jobs and output of 11.003 million garments per year • 33 Knit Garments firms employing a total of 24 513 workers and producing 115.143 million garments annually • 2 Footwear firms with employment of 1 253 and production of 7.2 million pairs of shoes per year • 11 Supporting Industries providing jobs for 218 people Employment in the footwear industry soared between 2016 and 2017, reaching growth of 82.7 percent year-on-year in the first quarter of 2017, from 768 to 1403 jobs. Challenges and opportunities Clothing and textiles industries have formed the backbone of Lesotho’s export trade to the United States (US) market, and the 2015

extension of AGOA for a further ten years ensures continued preferential market access for Lesotho. Notwithstanding the challenges within the Basotho textile and clothing industry, which have diluted some of the benefits of AGOA, the performance of the US economy remains important in sustaining export demand. Exports to the US are nonetheless expected to remain under pressure due to the continued erosion of Lesotho’s competitiveness in US markets by new multilateral and bilateral trade developments. The uncertainty of US exports has seen the textiles and clothing subsector begin a process of diversifying its markets, particularly to nonAGOA destinations such as South Africa. In 2015/16, 70 percent of Lesotho-made garments were exported to the US under AGOA, while 30 percent terminated in South Africa. This represents a significant shift from sole reliance on the US market, as only ten years ago no more than 5 percent of Lesotho’s apparel entered the South African market. The textile, clothing, footwear and leather products subsector realised growth of 3.9 percent in 2016 compared with 4.8 percent in 2015 according to the CBL 2016 Annual Report. At the same time, growth in exports of textiles and clothing was recorded at 18.4 percent in 2016 against 35.2 percent in 2015. While textile exports to the US continued to face challenges, Lesotho’s increase in market share in the Southern African Customs Union (SACU) region improved significantly, especially exports of textiles destined for the South African market, and exports to non-AGOA destinations are expected to grow.

DIVERSIFICATION & DEVELOPMENT Lesotho has a pressing need for export product and market diversification, as well as the development of value chains. The second Private Sector Competitiveness and Economic Diversification Project also concentrates on promoting diversification with the aim of building value chains and catalysing private sector efforts to scale up production. Reports such as the ‘Lesotho Potential Export Diversification Study’ have identified products with

which Lesotho could have comparative advantage, as well as potential new markets for products, and trade missions to source new buyers are ongoing. Local firms have been called on to diversify their exports to the US beyond textiles to fully benefit from the renewal of AGOA. In addition to the important ‘food products and beverages’ subsector, the Lesotho National Development Corporation has identified the following areas for investment: • Packaging materials and accessories • Consumer electrical and electronic appliances • Leather and footwear • Textile and garments (higher value-added garments; knit mills) • Water bottling • Automotive components • Sandstone products Strengthening value chains A study by the African Development Bank (AfDB) on textile value chains revealed that skill deficiencies, particularly at management and supervisory level, as well as limited and ineffective industry-specific training facilities, constitute a critical constraint to harnessing this value chain. It has been recommended that lead companies strengthen linkages with emerging local entrepreneurs to bolster supply. This is in addition to the need to increase productivity, skills development and transfer between foreign and local entrepreneurs. According to the AfDB, without a major productivity improvement and upgrading programme for entrepreneurs that includes more value addition, the industry will not be able to compete globally. Specific policies to further local company development and linkages to the domestic economy are required to extend the impact of the clothing industry beyond its immediate employment creation effect. Local entrepreneurs currently participate in the lower level processes of cut, make and trim plants. Provided financial constraints can be overcome, these entrepreneurs would play a more important role by upgrading to full package suppliers, using new machinery and production processes. Apart from textiles, the development of entrepreneurship

would require promotion of investment in agroindustry and development of agri-business to increase value-addition and market integration. Access to markets (buyers and suppliers) often impedes entrepreneurship development. This calls for the industry associations to offer support by providing information on market requirements and potential buyers and suppliers. Agro-processing opportunities Basotho Canners, incorporated as Basotho Fruit and Vegetable Canners (BFVC) (Pty) Ltd, is located in Masianokeng, Maseru. It processed raw materials (fruits, vegetables and ingredients) to produce consumer products such as canned baked beans in tomato sauce, organic peaches and asparagus, fruit juice and tomatoes. As an export-oriented company, BFVC had some success in exporting its products to South Africa and other international markets like the EU. However, the existing plant is currently not in operation. Basotho Canners is 100 percent owned by the LNDC, which is seeking a Joint Venture investment partner to operate the agro-processing factory on a management contract basis. The objective is to resuscitate and expand the current facilities for improved production and packaging of canned fruits and vegetables to better meet current and future demand in terms of quantities and quality of products, including ISO 9000 certification.

INDUSTRIAL INFRASTRUCTURE The construction of industrial estates is undertaken by the LNDC on land allocated by Government, with development concentrated in the Maseru and Leribe districts. Access to the estates is via tarred roads and, for freight purposes, those situated in Maseru are linked by rail from Maseru’s industrial area to the South African railway system. Maputsoe Industrial Area is close to South Africa’s Ficksburg station. The LNDC’s Industrial estates comprise: • Ha Nyenye (31 hectares) – 80 kilometres north of Maseru • Ha Tikoe (80 hectares) – 7 kilometres south of Maseru City • Berea (7 hectares) • Ha Belo (121 hectares) – Botha-Bothe Under the Tikoe Industrial Infrastructure Phase 2 Project, which was completed in the 2016/17 financial year, the LNDC has developed 27 hectares of land into a fully-serviced estate with roads, water, electricity and 11 factory shells with sizes ranging from 2 000 to 4 000 square metres (a total rentable space of 30 000 square metres) to accommodate new investors. The project was financed by Government and its development partners, the Arab Bank for Economic Development in Africa (BADEA) and the OPEC Fund for International Development (OFID), in an amount of US $28.4 million.

To achieve this, Basotho Canners will produce and package the following products: beans in tomato sauce, juice, Chakalaka (canned mixed vegetables; HS 2004.90), peaches and asparagus. Beans in tomato sauce, potatoes, green peas, juice and Chakalaka will be marketed in the local market, while asparagus and organic peaches will be marketed to both the local and international markets through wholesalers, distributors, supermarkets, caterers, hotels, retail stores/general dealers, restaurants and food courts.

MINING

The raw materials will be sourced from local smallholder farmers, who will be equipped and capacitated to produce sufficiently for the cannery, while excess supply will be channelled through the local market centre as fresh produce to meet local demand.

The mining and quarrying sector has grown swiftly over the past two decades, and presently contributes 8.4 percent to Lesotho’s GDP in current prices. As of 2017, there were three diamond mines and two sandstone quarries in full production. Lesotho has an estimated 405 kimberlite bodies in the form of pipes, dykes or offshoots.

Infrastructure development is ongoing in 2017/18, with M50 million having been set aside for Tikoe Industrial Infrastructure Phase 3 and a further M50 million for Belo industrial infrastructure.

COMMERCE, INDUSTRY & MINING 25

The mining industry is a significant job creator, directly employing about 3 000 people – a figure which is expected to double as new mines commence production in the next few years. The Ministry of Mining anticipates that by 2020 the industry will employ more than 10 000 people. Government plans to increase the contribution of mining to 10 percent of GDP by 2025, raising diamond production from 350 000 carats per year to about 1.5 million carats a year. One of the benefits of operating a mine in Lesotho is that it is located in the heart of southern Africa, and an array of mining skills and services are available from neighbouring countries such as South Africa and Botswana. While diamond mining remains the main focus of the industry, in early 2017 Government signed agreements with two mining companies to prospect for coal and shale gas. The first phase of shale gas prospecting involves research on the geological structure of the southern region, which will assist in the targeting of preferred sites for drilling, while the second phase entails the quantification of the gas resource. There is potential to find gas reserves of up to 10 trillion cubic feet. Coal exploration will take place in Mohale’s Hoek at Qhalasi and Matebang, with a view to determining whether there are significant deposits for viable commercial exploitation. Mining outlook The recovery in global demand for diamonds is currently supporting growth in Lesotho’s diamond mining industry. The mining and quarrying output index increased by 16.1 percent in the first quarter of 2017 relative to growth of 18.2 percent in the fourth quarter of 2016, on a seasonally adjusted basis. The increase in production came predominantly from higher levels of diamond recovery in the country’s three diamond mines. In mid-2017, Government forecast that the mining sector would post growth of 17.3 percent in 2017/18 from 8.1 percent in 2016/17 as a result of the recapitalisation of Liqhobong Diamond Mine which has achieved full production. The European market is the main destination for Lesotho’s rough diamonds exports. The Central Bank of Lesotho (CBL) expects diamond exports to COMMERCE, INDUSTRY & MINING 26

accelerate from -1.3 percent in 2016 to 62.5 percent in 2017 before slowing to 7.1 percent in 2018. Mineral sector framework and policy The Ministry of Mining is committed to disseminating information on mineral resources, as well as regulating and managing prospecting and mining activities to develop the mining sector in partnership with stakeholders in an environmentally friendly and sustainable manner for the socioeconomic benefit of the Basotho nation. Through the Ministry, the Government of Lesotho has a clear mandate on the following four areas in the mining industry: • Policy formulation, implementation and monitoring • Regulation of the sector • Investment and development, where Government is a shareholder in mining activities • Provision and management of geological information about mining resources in Lesotho In order to realise this mandate, a Minerals and Mining Policy was developed by the Ministry together with key stakeholders and approved by the cabinet in June 2015. The policy was formulated in line with the Africa Mining Vision (AMV 2009) which advocates for ‘transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development’. Designed to attract investment and thus encourage growth, it provides a strategic direction for the development of the country’s mineral resources and a predictable regulatory framework for the sector. The Minerals and Mining Policy also points to the need to engage in beneficiation of diamonds to add more value, create additional jobs, get a better deal from the country’s resources, and boost the tourism sector. The capital intensive nature of the mining industry means that it is not a huge employment creator. However, Government anticipates that the more highly skilled positions, which are currently being filled by workers from outside Lesotho, will be given to Basotho once they have acquired the requisite skills.

Following consultations with industry stakeholders, Lesotho is drafting new minerals legislation to achieve institutional reform, promote investment in the sector by clarifying and securing investors’ mining assets, and ensure that international standards are adhered to in terms of environmental protection, health and safety. The Ministry of Mining issues prospecting licenses through competitive bidding; an approach which improves governance and transparency while raising the potential for securing further investment. The Ministry of Mining’s medium-term objectives include: • Implementing the Minerals and Mining Policy, reviewing the existing legal framework, and developing a strategic plan for the Ministry in order to promote investment in the mining sector • Determining the country’s potential mineral resources and reserves to facilitate the discovery of available minerals as well as diversify mineral production • Increasing the number of operating mines in Lesotho by opening new mines and encouraging downstream activities • Ensuring that the Ministry’s structure is responsive to its strategic objective of strengthening mining industry regulation • Putting measures in place that help to maximise revenue collection • Setting up structures that will promote and enable beneficiation of minerals and increase participation of Basotho in the mining sector Research and investment Government places a great deal of emphasis on mineral research and tries to ensure that information on resources is easily available to all potential mining investors. Although commercial mining interests have up to now concentrated primarily on diamonds, there are indications that Lesotho possesses numerous other valuable mineral deposits. The geochemical mapping project presently underway includes the five base metals of platinum, niobium, tungsten, cobalt and tantalum, as well as rare earth elements.

Achievements during 2016/17 included the updating of 47 out of 58 geochemical maps to bring the country’s mineral resources information up to date. In addition, analysis of satellite data and ground trothing was conducted, and results for rare earth and platinum group elements are now available. An allocation of M36.2 million was proposed for the Ministry of Mining in the 2017/18 budget. Of this amount, M4 million is earmarked for the Lesotho Geochemical Mapping (LGM) project. In order to increase investment in the minerals sector, the Ministry of Mining is spearheading the construction of a M76-million Geoscience Laboratory in Maseru. This will allow for incountry research and provide, besides other services, indicative mineral resource reports for exploration and mining companies. The first phase of development is likely to be completed in 2018, with the laboratory’s capacity to be expanded over time. Expected outcomes include accelerated turnaround times for exploration and mining companies, which currently have to send test results to South Africa for analysis. Beneficiation of diamonds Mineral beneficiation features prominently on Government’s agenda, as the local processing of diamonds adds value to Lesotho’s mining industry and creates jobs for Basotho. A feasibility study into developing a Jewellery Manufacturing and Diamond Centre in Maseru recommended, as a starting point, the establishment of a few select core businesses capable of: • Competing in the international market • Promoting joint ventures with existing foreign jewellery businesses • Producing quality finished and semi-finished exportable products • Instituting intensive training programmes • Creating sustainable jobs Lesotho’s Mining Ministry intends establishing the Lesotho Diamonds Centre (LDC) in Maseru at an estimated cost of M10 million. This will be an exchange platform for the buying and selling of diamonds. The LDC will start out as a small Ministry-driven project, which will focus on the evaluation of diamonds by grading and sorting

of gems, as well as securing government revenues obtained from royalty payments. It will also be mandated to collate correct data on the volumes of exported diamonds, which is a key requirement of the Kimberley Process. The LDC will initially be located at the Mining Ministry’s offices in Maseru. In the long-term the plan is to establish it near Moshoeshoe I International Airport so that buyers are afforded easy access to the centre. This will also ensure greater security, as the diamonds will not need to be transported great distances. Furthermore, it is hoped that the LDC will be able to address issues of artisanal and small-scale mineworkers. This subsector has not yet been set up as a legal, stateregulated industry. Affiliated with the internationally-recognised Harry Oppenheimer School of Diamonds, the Lesotho Diamond Academy trains students in gemmology (the study of natural or artificial gems), diamond evaluation, cutting and polishing. Lesotho’s economic performance is expected to recover over the 2017–2019 period, largely as a result of the improved performance of the mining sector, thanks to increased output from the country’s main diamond mines. Diamond mining While Lesotho’s alluvial deposits have historically yielded a number of large, high-quality gem diamonds, it was not until the 1950s that the source of these gems was discovered in the Maloti Mountains. These diamondiferous kimberlite deposits were mined by artisanal diggers between 1959 and 1968, and thereafter by large mining companies such as Rio Tinto (1967-1972) and De Beers (1977-1982), with the latter mining the Letšeng-la-Terai deposit situated about 70 kilometres from Mokhotlong. Mining production reached its peak in 1980, when diamonds to the value of M24.7 million were exported. The mine was closed in 1982 as it became less profitable. The open-pit Letšeng Diamond Mine was purchased by Gem Diamonds, a leading global producer of high value diamonds, in 2006. The

accessing the ore bodies from the adjacent valleys, entailing the construction of a horizontal shaft instead of a vertical one. Production at Letšeng increased by 26 percent in the third quarter of 2017 to 30 774 carats. The recovery of high-end diamonds is also improving, with the mine having yielded six diamonds in excess of 100 carats in the first nine months of the year compared with just four during 2016. These include the 114.38-carat Type II, 126-carat D-colour Type IIa, and 104.73-carat white diamonds, as well as a 151.52-carat yellow diamond.

Diamond Sorting © Letšeng Diamonds company owns 70 percent of the mine, with the balance of interest (30 percent) being held by the Lesotho Government. The mine employs approximately 1 600 people, including contractors, with the Letšeng workforce comprising about 97 percent Lesotho nationals. At an altitude of over 3 kilometres above sea level, it is the highest diamond mine in the world and is renowned for the recovery of large, high-quality Type II diamonds. Over the course of a decade, Letšeng has produced more than 60 gems in excess of 100 carats, predominantly high-value white diamonds. Amongst these are the iconic 603-carat Lesotho Promise, the 550-carat Letšeng Star, and the 493-carat Letšeng Legacy. This is in addition to the 601-carat ‘Lesotho Brown’ recovered in 1960. In 2015, Letšeng produced the 357-carat Letšeng Dynasty and the 314-carat Letšeng Destiny. The mine is also a source of high-quality pink and blue diamonds, with a rare blue diamond achieving a sales price of US $603 047 per carat in 2013 and an exceptional pink diamond achieving US $187 700 per carat in 2016. Although Letšeng produces only about 100 000 carats per year because of its low grade recovery (averaging just less than two carats per hundred tonnes), the mine’s exceptionally high average dollar-per-carat status puts it in the top 15 global diamond producers by revenue. Diamonds from

Letšeng are worth, on average, between US $2 000 and US $2 500 per carat, and generate revenues of about US $200 million a year for Gem Diamonds. Over the past five years, Letšeng has grown to become one of the largest open pit diamond mines in the world. It processes ore from two kimberlite pipes: the 17-hectare Main pipe and 5.2-hectare Satellite pipe. Initiatives to unlock additional value at the mine, including an updated open-pit life of mine plan, large diamond recovery and breakage projects, and a mining optimisation project, began in 2017. The revised life of mine plan will reduce waste tonnes mined and increase ore treated from 6 to 7 million tonnes per annum, with the contribution from the higher dollar-per-tonne Satellite pipe rising from 1.6 million to 1.8 million tonnes per annum for the next two years, and thereafter to 2.0 million tonnes per annum until 2029. The new plan will also reduce capital requirements over the life of mine, with improvements in near term cash flows. Letšeng should continue profitable production until 2038, with Gem Diamonds expecting to transition to underground mining operations from around 2025. Owing to the close proximity of the kimberlite pipes to each other, one option is for a shaft to be sunk between the pipes to ensure access to both simultaneously. Another option envisages

Letšeng’s Diamond Discovery Centre is a permanent interactive exhibition that tells the story of Lesotho’s diamond industry, with a specific focus on the history of diamond mining at Letšeng. Liqhobong Diamond Mine lies at the head of the Liqhobong Valley in the Maloti Mountains. It comprises a main and satellite pipe, covering areas of 8.5 hectares and 0.8 hectares, respectively. The mine has since September 2010 been operated by Liqhobong Mining Development Company (LMDC), 75 percent of which is owned by Firestone Diamonds and 25 percent by the Government of Lesotho. The diamond resource currently extends to approximately 520 metres below surface, totalling around 23 million carats at an average grade of 28 carats per hundred tonnes. The potential exists to extend the mine life as the resource is open at depth: the deepest vertical hole drilled to date terminated in kimberlite at 650 metres below the surface. Following development of the main treatment plant and supporting infrastructure, Liqhobong was commissioned in October 2016, with construction completed on time and within the US $185.4 million budget. This includes a new processing plant capable of producing 3.6 million tonnes per annum and facilitating improved diamond value management by reducing breakages and enabling the recovery of intact stones in excess of 100 carats. Firestone’s first two diamond sales were completed COMMERCE, INDUSTRY & MINING 27

in February and March 2017 in Antwerp. Total sale proceeds of US $13.7 million were achieved, with all 127 590 carats offered for sale being sold and achieving an average price of US $107 per carat.

million, and a 22 percent increase in diamond production to 498 000 carats. In addition, it is anticipated that the life of mine will be extended to 13.5 years, and the project’s net present value is forecast to rise by 31 percent to US $85 million.

Kao Plant © Storm Mountain Diamonds

Nameplate capacity of 300 000 tonnes per month was being achieved regularly in the first quarter of 2017. Scheduled plant commissioning modifications at the mine resulted in a higher grade of 20.1 carats per hundred tonnes achieved for March, with the grade expected to continue rising post the implemented plant modifications and the mining of higher grade ore in the main pit in the coming months. Firestone Diamonds’ review of its current life of mine plan was undertaken in order to optimise mining operations. This has seen the company revise its production guidance for the year to 30 June 2018, which is anticipated to be between 800 000 and 850 000 carats. This will be achieved by extending the mining of the weathered kimberlite in order to access lower areas of the pit that have historically yielded higher grade and higher value diamonds. Furthermore, Firestone plans to mine additional waste rock in the coming year in order to improve the long-term mining prospects. In April 2017, a 110-carat diamond was unearthed at Liqhobong. This was followed by the recovery of a 134-carat gem-quality light yellow diamond in October 2017 – the largest gem the company has recovered to date. At 1 million carats per annum, Liqhobong Mine has the largest production capacity of all Lesotho’s diamond mines. The owner and operator of Kao Diamond Mine, Storm Mountain Diamonds (SMD), is a subsidiary of London-listed Namakwa Diamonds, which holds a 75 percent equity interest while the Government of Lesotho holds 25 percent. At 19.8 hectares, the main kimberlite pipe at Kao is the largest in Lesotho and the fourth-largest in southern Africa. There is also a 3.2-hectare satellite pipe. Situated in the Botha-Bothe District, within a 20 COMMERCE, INDUSTRY & MINING 28

In terms of the new plan, Phase 1 will see a higher processing capacity at the diamond plant from 100 to 150 tonnes per hour, with the targeted mining and treatment period remaining unchanged at around 34 months, and initial production targeted for the second half of 2018. During Phase 2, the miner intends installing a second 150 tonne-perhour module in parallel with the Phase 1 plant to achieve the targeted 300 tonne-per-hour Phase 2 throughput.

kilometre radius of the Letšeng and Liqhobong mines, Kao has a total resource of 173 million tonnes, containing about 12.6 million carats. Commercial production began in March 2012, treating up to 300 000 tonnes per month. A plant expansion project intended to raise production to 400 000 tonnes per month was completed in 2016. The upgrading of plant equipment has notably enhanced processing capacity as well as helping to reduce damage to larger gems. Increased production volumes are achievable due to the large size of the kimberlite pipe. Mining flexibility in the open pit is an advantage, with a life-of-mine stripping ratio of less than one tonne of waste per tonne of ore. In addition to increasing the scope of mining in the pit, Kao’s production horizon has been extended until at least 2035. Kao’s output is characterised by a high percentage of gem-quality stones and many fancy stones with colours ranging from pink, purple, yellow (vivid and light fancy) and light brown to the classic ‘blue white’. Furthermore, the mine has yielded the largest pink gem diamond recovered in Lesotho, the 36.02 carat ‘Pink Storm’, which was sold for US $425 000 per carat. Kao’s top ten diamonds have generated US $38 million at an average price of US $75 000 per carat. Located near on the southern edge of the Kaapvaal

Craton, which hosts the diamondiferous northern Lesotho kimberlite field, the Mothae Diamond Project comprises an estimated 8.8-hectare diamondiferous kimberlite pipe containing a resource of large, high-value Type lla diamonds. Mothae is 30 percent-owned by the Government of Lesotho and 70 percent by Lucapa Diamond Company, and has an indicated resource of just over a million carats and an inferred resource valuation amounting to US $1 billion. Lucapa acquired Mothae in early 2017 for a sum of US $9 million. Its erstwhile majority owner, Lucara Diamond Corporation, abandoned the resource in 2015. Trial mining between 2008 and 2012 during Lucara’s ownership yielded 23 446 carats, including 96 stones weighing more than 10 carats each, while three separate rough diamond sales fetched up to US $41 500 per carat. Lucapa has a ten-year mining lease, with the option of extending this by another decade. In October 2017, Lucapa announced that its new development plan for Mothae, which optimises the pit design to maximise targeted diamond production and cash flow, had significantly improved project economics. The new mine plan is expected to result in a 29 percent increase in gross project revenues to US $776 million, a 26 percent increase in net operating cash flows to US $312

Under the new mine development plan, Phase 1 is expected to cost US $17 million, of which US $1.5 million had already been funded as of October 2017. Lucapa has also secured a US $15 million facility from Equigold, with the Lesotho Government agreeing to assist the company with additional up-front investment by deferring the remaining consideration payments due from Lucapa. The government-owned Lemphane Kimberlite Project is one of five known diamondiferous kimberlite pipes within the region, and lies in close proximity to both the Letšeng and Liqhobong deposits. Lemphane has the potential to yield large high-quality diamonds of up to 8.90 carats with values greater than US $2 400 per carat having been recovered. Negotiations are underway to determine who will be awarded the lease for the operation of Lemphane, with Government having shortlisted three companies. Operated by Reskol Diamond Mining, a subsidiary of French-listed Batla Minerals, the Kolo Diamond Project in Mafeteng has an estimated resource of 1.3 million tonnes of kimberlite and 110 000 carats. Reskol has a ten-year lease which expires in 2021. Trial mining was expected to be completed before the end of 2017 and has included Phase 1, consisting of setting up processing facilities and conducting a 60 000-tonnes pre-mining test, and Phase 2, involving capital investments to increase capabilities and process 50 000 tonnes per month.

Tourism

Tourism has enormous potential for socioeconomic development, as it stimulates business, trade and capital investment, creating jobs while protecting heritage and cultural values. © Jason May - Afriski Mountain Resort Lesotho is fortunate to possess a wealth of tourism assets, such as outstanding natural beauty and a unique cultural identity; factors which enhance its competitive edge in the international tourism industry and make the sector ripe for investment. These assets are complemented by the Mountain Kingdom’s close proximity to South Africa, which attracts more international visitors than any other destination in Sub-Saharan Africa. Travel & Tourism Economic Impact Report 2017 Lesotho’s tourism sector is small in absolute size – 169th out of 185 countries in 2016 – according to the World Travel & Tourism Council (WTTC) in its 2017 Travel & Tourism Economic Impact Report. However, with a ranking of 69, tourism’s relative contribution to the national economy is much higher. The WTTC report estimates that the direct contribution of travel and tourism to Lesotho’s Gross Domestic Product (GDP) was M1 520.5 million (US $103.4 million) in 2016, which translates to 5.3 percent of total GDP. It is anticipated that the sector will grow by 1.2 percent per annum in the 2017 to 2027 period to M1 686.0 million (US $114.6 million) or 3.8 percent of total GDP by 2027. This indicator reflects economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation

services (excluding commuter services), as well as restaurant and leisure industries directly supported by tourists. At the same time, the total contribution of travel and tourism to GDP, including both direct and indirect contributions, reached 12.2 percent in 2016 and is forecast to rise by 1.3 percent per year to M3 926.3 million (US $266.9 million) in 2027. The travel and tourism industry directly supported 34 000 jobs in 2016, translating to 4.9 percent of total employment in that year, with this figure expected to rise by 5.3 percent in 2017. The industry’s total contribution to employment, including jobs indirectly supported by tourism, was 11.4 percent of all employment (79 000 jobs) in 2016. This is predicted to increase by 4 percent in 2017 to 82 000 jobs. According to the WTTC, visitor exports generated M405.8 million (2.9 percent of total exports) in 2016, with this figure forecast to grow by 5.3 percent per annum between 2017 and 2027 to M689.7 million (US $46.9 million). At present, most spending is generated by business travel at M2 672.1 million (89.7 percent), while leisure travel is responsible for the balance of direct travel and tourism GDP. In 2016, domestic travel

spending generated 86.4 percent of direct travel and tourism GDP compared with 13.6 percent for foreign visitor spending or international tourism receipts.

TOURISM DEVELOPMENT VISION The Government of Lesotho continues to identify tourism as a key pillar of development in its quest to diversify the economy. Recent achievements under the Ministry of Tourism, Environment and Culture include: • Completing the zoning of Sani Top and Semonkong Tourism Development Areas • Developing the tourism destination brand and communication strategy • Developing the tourism business barometer • Celebrating Arts, Innovation and Culture Week • Completing documentation of oral histories and more than 65 rock art sites at Sehlabathebe National Park World Heritage Site • Development of the Creative Industries Empowerment Programme which has created access to the international market for 50 local producers, with US $97 000 generated for the 2016/17 financial year Specific measures being adopted during the

2017/18 financial year include the introduction of a regulatory regime to promulgate sound legislation which will regulate the tourism sector for the benefit of domestic investors. Other policies and programmes to be finalised during the year include the revised Tourism Master Plan, Tourism Investment Policy and Tourism Promotion Strategy, and the Community-Based Tourism Blue Print. In addition, Government is divesting its interest in Molimo Nthuse Lodge, Bokong and Liphofung chalets, Thaba-Chitja Island and Sehlabathebe chalets to aid job creation and improve the upkeep of these facilities. These will be transferred transparently, and without any form of conflict of interest, to investors in Lesotho’s tourism product. Grading of tourism facilities is also ongoing in order to uphold international standards of service. Furthermore, the cost of obtaining visas is being reviewed. Having realised the importance of tourism to the economy, the Ministry of Education has introduced travel and tourism into Lesotho’s education curriculum in the form of a pilot project in nine schools across the country’s various districts. An amount of M220.8 million was proposed for the TOURISM 29

Ministry of Tourism, Environment and Culture for the 2017/18 financial year. Of this amount, M90.1 million went under the recurrent budget, while M130.7 million was allocated to the development budget – M12 million from donor funding and the balance from government revenues.

LESOTHO TOURISM DEVELOPMENT CORPORATION The Lesotho Tourism Development Corporation (LTDC) promotes Lesotho as a preferred tourist and tourism investment destination, both locally and internationally, through strategic marketing and sustainable product and industry development in partnership with the private sector and the community. Robust private sector engagement forums are essential to improve the participation of business in all aspects of the tourism product.

Construction is nearing completion on the National Museum and Art Gallery, which is expected to open in 2020. The three storey building has been designed in the shape of a spiral aloe, one of Lesotho’s endemic species traditionally known as ‘Lekhala-Khaletsa’. The museum will include displays on the history of Lesotho and the Basotho people up to the present day, including their attire, norms and values, beliefs, food, animals and more. During 2017 the World Bank approved US $13.4 million in additional financing for the Second Private Sector Competitiveness and Economic Diversification Project (PSCEDP II). Part of this funding is going towards the construction of a Tourism and Handicraft Information Centre that will serve as a reference point and retail centre for both tourists and locals. The Ministry’s medium-term priorities for the tourism sector include: • Tourism product development – Developing a National Tourism Development Plan and Community Based Tourism (CBT) Strategy; implementation of a tourism levy; promotion of tourism education and awareness. • Promotion and marketing – Development of a National Marketing Strategy; promotion of domestic tourism. • Developing infrastructure for conservation, preservation and proper management of heritage resources – Establishment of the National Museum and Art Gallery for conservation, preservation and proper management of heritage resources; digitisation of archival material. • Documentation, conservation, management and presentation of heritage resources – Conducting research on heritage resources in all the districts; design, production and installation of exhibition at Sehlabathebe National Park (oral history and rock art); TOURISM 30

Lesotho Northern Parks Guides in Ts’ehlanyane National Park © Anne Wade establishing a copyright society; continuation of the annual Arts, Innovation and Culture Week. Tourism statistics Arrivals and accommodation statistics, tourism employment surveys and domestic tourism surveys are invaluable in making informed planning and investment decisions by players in the tourism sector. These statistics are also helping to facilitate the planning and design of marketing programmes in line with tourism sector needs and demands, as well as providing information for the provision of more competitive and attractive destinations. Although Lesotho is yet to establish its own Tourism Satellite Account (TSA), a standard statistical framework for the economic measurement of tourism, the sector is currently estimated to be contributing about 3 percent to GDP. The Lesotho Tourism Development Corporation (LTDC) is currently working with Lesotho’s Bureau of Statistics to establish the country’s own TSA, which is expected to be launched soon. Visitors to Lesotho can now apply for visas online at http://evisalesotho.com, as well as find out what the particular visa requirements are for each country.

The 2017 Arrival & Accommodation Statistics Report and Visitors’ Exit Survey Report were released by the LTDC in September 2017. These statistics revealed that Lesotho welcomed a total of 1 196 214 visitors in 2016. This represents a substantial increase of 10.5 percent over the figure of 1 082 403 visitor arrivals in 2015. According to the same report, hospitality establishments recorded a marginal increase in revenue of M844 million in 2016, which is 2.7 percent higher than the M822 million generated in 2015. The top three African source markets of South Africa, Zimbabwe and Botswana represent more than 90 percent of all visitors, and South Africa continues to be by far the largest source market. International source markets include China, United States of America, United Kingdom, India, Netherlands and Germany. More than half of all arrivals are from those visiting friends and family, while just over a quarter come to Lesotho on holiday, and about 10 percent travel for business purposes. The average length of stay for all tourists visiting Lesotho is around five nights. Those visiting friends and relatives stay the longest (seven nights on average), while leisure tourists stay for approximately four nights.

The Domestic Tourism Strategic Survey revealed that there was a great deal of scope to stimulate domestic leisure tourism and thus reduce the exposure of the local tourism industry to fluctuations in international demand or seasonality, particularly because international tourism can be extremely sensitive to global political and economic factors. This resulted in the implementation of the ‘visit your country first’ campaign aimed at encouraging Basotho to travel locally. The LTDC has been focusing on attracting more investment into the sector, especially in areas such as Semonkong, where the World Tourism Day celebration on 27 September 2017 was used as an opportunity to encourage the local community to engage in sustainable tourism activities. Activities lined up by the LTDC included public gatherings to create awareness on the importance of protecting natural resources and the general importance of tourism and its benefits to the local community. There were also stakeholder forums to discuss sustainable tourism opportunities. Marketing and promotion The LTDC has launched a new tourism brand identity and slogan for Lesotho. Designed to showcase the country’s high altitude, unique landscape and culture, Lesotho’s new positioning statement is ‘The Unexpected High’, while the new slogan is ‘The Kingdom in the Sky’. The new brand identity incorporates the country’s four signature attributes: welcoming, majestic, energetic and authentic.

Lesotho’s tourism product is promoted in international markets through articles in magazines and brochures (both print and electronic), as well as participation in international tourism fairs, such as Germany’s International Tourism Bourse and London’s World Trade Market. The country is also well represented at South Africa’s Indaba, the largest tourism marketing event on the African calendar and one of the top-three ‘must visit’ events of its kind internationally.

Star grading The implementation of the Quality Star Grading System will also go a long way towards supporting private accommodation providers to improve their facilities and ensure a world-class hospitality sector. The Grading Council, which is a division of the LTDC, was established with support funding from the World Bank and enjoys standards consistent with the RETOSA (Regional Tourism Organisation of Southern Africa) harmonised standards.

Lesotho’s revamped tourism website features the newly-designed logo which comes in different shapes and colours to represent the signature attributes of the Mountain Kingdom: culture, adventure, snow, peace, water and prosperity. Digital technology has become a key element for visitors in planning and booking their holidays, as information on new and exciting places to visit is sourced and shared via the internet. In acknowledgement of the importance of a website in marketing tourist attractions, Lesotho has recently revamped its online presence at the LTDC tourism website: visitlesotho.travel. In addition to providing comprehensive tourism information on attractions, accommodation facilities and activities in different parts of the country, the redeveloped site is visually engaging, more interactive, user-friendly and easy to navigate. With new studies revealing that 60 percent of travel searches start on a mobile device, and that travellers increasingly rely on mobile phones when they arrive in a new destination, LTDC has introduced the mobile app ‘Best of...’ to assist visitors to Lesotho. The app serves as a travel guide for anyone intending to explore new destinations in the country, and has an interactive map with GDP coordinates and directions. Travellers can see pictures, video clips and 3-D topography of popular attractions along the routes as well as details of medical services, financial services (banks and ATMs), schools, restaurants, accommodation facilities and more. The app can be downloaded from iStore or play store.

Lowlands Heritage Route The LTDC has intensified its initiatives to ensure that communities benefit from tourism assets in their environs by launching the Lowlands Heritage Route, which encompasses tourist destinations in the four areas of Malimong, Ha Kome, ThabaBosiu and Ha Baroana. The launch was conducted in Kome village in the Berea District, where the community is expected to benefit from the anticipated tourist traffic to sites that include Malimong – widely believed to be the place where the founder of the Basotho nation, King Moshoeshoe I’s father Peete, was killed. Ha Kome, which is rich in archaeological information about the lives of the San – popularly known as the ‘Bushmen’ – as well as incidents of cannibalism in the 19th Century, is a well-known attraction. Other places to visit include ThabaBosiu, originally inhabited by King Moshoeshoe I, and the cave wall at Ha Baroana, which is covered with paintings of human figures, animals and birds. This is in addition to other rock art sites situated along the river amidst the spectacular terrain of the central Maloti mountain range.

The LTDC partnered with the STEP Foundation of the United Nations World Tourism Organisation (UNWTO) to initiate this community-based tourism development project. Established Basotho tour guides were invited on a familiarisation tour of the route. The initiative builds on earlier efforts to empower communities, such as the development of the Kome Rural Homestays Project in December 2014. The homestays seek to generate income for villagers through the provision of accommodation to tourists, who also enjoy the opportunity to experience Basotho culture and hospitality in a domestic setting. The Lowlands Heritage Route provides visitors with a true Basotho cultural experience, including local tour guides, community interaction and homestay opportunities, while also enhancing rural livelihoods by stimulating enterprise development and income generation prospects.

The star grading system is an internationally recognised method of classifying the quality of any accommodation facility (hotels, lodges, guesthouses, bed & breakfasts, self-catering units and camping facilities) based on a one to five star rating. This is one of the first such programmes in the region to integrate grading standards that reflect both the overall quality of the lodging facility as well as its environmental impact and suitability for guests with disabilities. The emphasis is on features such as room size, furniture and linen, structural soundness, cleanliness, cuisine, bathroom facilities, service and reception facilities. The process is benchmarked on the experiences of Botswana and South Africa. Establishments in strategic locations are being earmarked for upgrading. The popular Maloti Route is one of those targeted in order to ensure the legitimate development of this high-value travel corridor. Focusing on locations that are close to the Lesotho-South Africa border is also important in order to encourage South Africans to stay overnight in Lesotho rather than a cross-border establishment.

TOURISM ASSETS Lesotho has unique tourism assets which set it apart from other destinations on the continent. Outstanding features include its high altitude and dramatic landscape of towering mountains and scenic river valleys, surging waterfalls and crystal clear streams, distinctive flora and fauna, and vivid cultural heritage, not to mention its status as one of the three remaining kingdoms in Africa. There are a variety of sites of geological, historical and archaeological importance, including rock art in the TOURISM 31

highlands and dinosaur footprints embedded in the sandstone of the lowlands. Moreover, as the only country in Africa with regular winter snowfall, it offers an exceptional African-cum-alpine experience unmatched in the region.

drive from Johannesburg via the Caledonspoort border post. Afriski Mountain Resort is Africa’s highest ski resort, and its slopes attract around 10 000 visitors every winter. Although winter is the busiest time, the resort is open all year round, proving an ideal venue for summer holidays, winter getaways, sporting adventure, team-building and conferences.

Adventurous motorists can tackle the meandering route and spectacular views as they travel from South Africa up the Sani Pass. This route featured in the rebooted ‘Top Gear’ TV series, which tested the endurance of the new Jaguar, Porsche and Mercedes-Benz in negotiating its tortuous hairpin bends. Entering Lesotho at Sani Top, which rises 2 874 metres above sea level, visitors will be left with little doubt as to why the country is known as the ‘Kingdom in the Sky’. Africa’s highest peak south of Kilimanjaro, Thabana-Ntlenyana, is a 15-kilometre hike from Sani Top village. Travelling further into the highlands, the dramatic ‘Roof of Africa’ route unfolds through the 3 240-metre Kotesipola Pass, down into the valley below and the town of Mokhotlong. The 47-kilometre road between Sani Top and Mokhotlong has been upgraded to bitumen standard. Sani Top has the highest pub in Africa and is a superb spot to take in the beautiful mountain scenery. This remarkable mountain habitat is contains many rare and endemic species, and while wildlife is not prolific, the varieties to be found have made fascinating adaptations to their environment. These include rhebuck, mountain reedbuck, baboons, jackals and smaller animals such as rock hyraxes, mongoose, meerkats and ice rats. Reptiles include the small yet very rare berg-adder. The mountain ranges are home to 280 different varieties of birds, some of which are endemic. It is quite common to see vultures and eagles soaring on thermals, with less usual species comprising the sentinel rock-thrush, orange-breasted rock-jumper and bald ibis. Birding takes place primarily between October and March, with the Sani Pass area ranking as one of the top ten birding spots in southern Africa. The cold mountain streams of Lesotho are TOURISM 32

In winter the ski slopes are serviced by a 1-kilometre long T-bar lift, as well as three beginner lifts, with a travelator for complete beginners or children. A snowmaking system ensures that skiing is possible in winter, even when there is little natural snowfall. In summer, a range of adventure activities are on offer like mountain biking, monster rolling trails, motor biking, abseiling, hiking, and high-altitude fitness training.

Fly fishing © Semongkong Lodge good for fly fishing at most times of year, with the exception of the rainy season. Despite its subtropical latitude, Lesotho’s elevated altitude means that it is free from both bilharzia and malaria. The climate is continental, with hot summers and cold winters, marked by clear blue skies and brilliant sunshine for more than 300 days a year. Long, hot summers are followed by warm autumn days that are ideal for hiking and pony trekking. However, these high altitudes also make weather patterns unpredictable, and beautiful cloudless conditions can rapidly give way to thundershowers or snowfalls. During spring, the hillsides are adorned with a diverse variety of alpine flowers, while the valleys are covered in peach blossom and mimosa. Lesotho’s national flower, the spiral aloe, may be seen on the slopes of the Maloti Mountains. Accommodation The accommodation sector is one of the chief sources of tourism revenue and well as employment. Accommodation establishments in Lesotho encompass hotels, bed & breakfasts (B&Bs), lodges and guest houses, self-catering cottages and backpackers’ hostels. These range from sophisticated, well-appointed establishments, with casinos and conference facilities, to those which

offer more basic amenities. Lesotho has seen steady growth in the number of accommodation facilities over the past few decades. Maseru enjoys two large international hotels and an exclusive boutique hotel, and a variety of new establishments have been built throughout the country in the past several years, such as the luxurious Maliba Mountain Lodge and self-catering Riverside Lodge in Tšehlanyane National Park. In addition, the rise of community tourism has seen more and more rural home-stays offered in villages where visitors are able to experience a slice of real Basotho life. These include Malimong, Ha Kome and Morija in Maseru district; Tsatsane in Quthing and Thamathu in Qacha’s Nek; as well as others in Moteng and Monontsa in Botha-Bothe district, and Matsoaing and Malubalube in Mokhotlong. Skiing and snow sports Lesotho’s picturesque countryside boasts snowcovered mountain slopes during winter, making it unique to Southern Africa and ideal for skiing and other snow-dependant activities. With most of the country lying at more than 1 500 metres above sea level, snow can fall up to nine months of the year, peaking during the winter months of June, July and August. In the highlands, snow skiing takes place below the Mahlasela Pass, which is just a five-hour

Annual events at Afriski include the Winter Whip snowboarding Jam; Winter Fest music festival in August, a great mix of music and bum-boarding, tubing, snowboarding and skiing; a mountain bike festival in October; and mountain biking weekends throughout the year. The slopes are open from June to the end of August during the winter season. There are nursery-level and intermediate slopes, along with the main 3 220-metre high Mahlasela ski slope. Afriski boasts an experienced team of qualified instructors, who are available to skiers of any experience level. In addition to skiing and snowboarding, activities such as incredibly fun bum-boarding and snow tubing are on offer. Equipment and ski lessons may be booked directly at the resort, but pre-booking is advisable. The Pudi children’s club offers supervised snow activities for kids, while adults have their time on the slopes. Reminiscent of an Alpine ski village, Afriski offers several accommodation options, from superior mountain chalets and ski lodges, to modest apartments and backpackers’ quarters. Other amenities include the Gondola Café Après Ski Bar, situated at the foot of the slopes, and

Africa’s highest restaurant a stone’s throw from the accommodation.

world’s best mountain bikers – Phetetso Monese and Teboho Khantsi. Cycling is also the highest ranked sport in Lesotho, ahead of football and athletics.

There truly is something for everyone, and experiencing Africa’s snow first-hand is a mustdo experience. For further information, view the website www.afriski.net, or contact Central Reservations at bookings@afriski.net. Adventure sports and trails Lesotho’s dramatic topography is ideal for all manner of high-altitude adventure sports, and the mountainous highlands pose an exhilarating challenge for climbers, hikers and bikers against the backdrop of a pristine and scenic natural environment. Rivers, waterfalls and dams – particularly the Mohale and Katse dams and the Senqu River – offer various water sports opportunities. The Maletsunyane Falls, one of the highest single-drop waterfalls in the Southern Hemisphere and the highest in Southern Africa, plummets 192 metres into a deep gorge, creating clouds of spray which are visible from afar. The 204-metre abseil off the edge of the Maletsunyane Falls to the bottom of the gorge holds the Guinness World Record for the longest commercially operated singledrop abseil. This is abseiling at its best and most exciting, but definitely not for the fainthearted! To help visitors familiarise themselves with the equipment and techniques used on this extreme abseil, Semonkong Lodge offers a half-day of training with qualified guides on much more modest cliffs of around 25 metres. Visitors should bring a good pair of hiking boots and quick-drying pants or a change of clothing; a water-proof jacket is also advisable. Gentler abseiling excursions are available on the pleasant cliffs around the Lodge. Semonkong Lodge, together with the local community, offers pony trekking on the back of a gentle yet sure-footed Basotho pony, giving visitors a chance to explore the magnificent scenery and culture. There are day rides of up to five hours which take in the Maletsunyane Falls or even Mount Qoang, the highest mountain in the area. The overnight pony trekking adventures involve several hours of riding per day. While strenuous for some, this is a wonderful way to experience

The team behind the Lesotho Sky – Sky Events (Pty) Ltd – also offers guided mountain bike tours, organises the annual Corporate Challenge Event, road bike and mountain bike tours, as well as Team Building Events for big and small organisations. Through charitable efforts the Lesotho Sky team has revived BMX sport in Lesotho and recently built an asphalt pump track for BMX, bicycles and skateboards at Roma Trading Post. The track is free to use and competitions are hosted regularly. The Lesotho Sky team is based at Roma Trading Post, about a 30-minute drive away from Maseru.

Lesotho Sky © Wayne Reiche the wilds of Lesotho and sights such as Ketane Waterfall, the Thaba Putsoa Mountains and Ha Mojalefa. All baggage is carried on packhorses, and accommodation is in Basotho villages.

tourism sector in the world. Lesotho possesses enormous potential in this regard, thanks to its many excellent mountain biking trails which follow dramatic routes through the highlands.

For more information please visit: www.lesothosky. com; www.facebook.com/LesothoSky; www. skyadventures.net; or www.facebook.com/ SkyAdventuresLesotho/ www.tradingpostlodge.com

The rural village of Malealea is also regarded as one of Lesotho’s top adventure destinations. Experiences include overnight pony treks, hiking and mountain biking to attractions such as Botsoela Waterfall, Bushman painting, Pitseng gorge and rockpool, three caves and overhanging rock sites.

For those who are passionate about mountain biking in Africa, the Lesotho Sky Mountain Bike Race has become a ‘ride of passage’. Covering more than 350 kilometres of raw, natural mountain trails over six day, the race takes riders to the edge of MTB Nirvana.

The Sani Pass is a magnet for running and cycling enthusiasts. In addition to the Sani Dragon, which is a two-day MTB stage race taking place every September/October, races include the Sani Stagger marathon and half marathon events in November.

There are motor biking and quad biking adventures, as well as 4x4 trails in the highlands, with off-road driving offering many challenging routes through breathtaking mountain scenery. Celebrating half a century in 2017, the Roof of Africa is considered to be one of the world’s toughest off-road endurance events and attracts the best international Xtreme Enduro competitors. It takes place in the Maloti Mountains every year during November or December. The rugged Menoaneng Pass on the road that connects Mokhotlong and Thaba-Tseka is a treat for mountain bikers and 4x4 drivers. Bike tourism is currently the fastest-growing sports

This international event was launched in 2011 with only 22 riders, and has since grown into one of Africa’s most spectacular and toughest stage races, bringing together top athletes from across the globe. The Lesotho Sky 2018 Race takes place from the 24th to the 29th of September. Entries are limited to 100 riders or 50 teams. The Lesotho Sky has been recognised by the International Cycling Union (UCI) since 2013, and hosts both professional and amateur teams. In 2015, the race was awarded an upgrade from a C2 to a C1 event, which means that UCI riders earn more points and also earn more prize money. Thanks to the UCI points earned by Basotho riders, Lesotho is now ranked 26th in the world and 2nd in Africa after South Africa, boasting two of the

Held in north-east Lesotho over the rugged mountain footpaths of Tšehlanyane National Park, the Lesotho Ultra Trail offers 50-kilometre and 38-kilometre courses through breathtaking mountain landscapes. Hosted by Maliba Lodge, the race celebrated its fifth year in 2017, once again attracting a top-class local and international field. Classed as an Ultra Skymarathon© because it exceeds 45 kilometres in length and 2 500 metres in vertical gain at high altitude – with parts venturing to over 3 200 metres – it’s a challenge for even the toughest of participants. Lesotho is also renowned for its fly fishing opportunities. The Maletsunyane River was stocked with trout in the late 1950s, and today Semonkong Lodge offers fly fisherman a pristine piece of river, where the Maletsunyane Falls has created two distinctly different fishing zones. On TOURISM 33

The Morija Arts Centre / Maeder House Gallery, another component of the Museum, offers training in drawing / painting, ceramics, mosaic and animation. It has carried out a range of initiatives in arts education and production as well as exhibitions.

the easily accessible stretch above the waterfall there’s a realistic possibility of catching a ten-pound wild brown trout, while hiking (or abseiling) to the bottom of the falls reveals excellent fishing opportunities for rainbow as well as brown trout and yellowfish. The lodge also hosts extreme fly fishing adventures lasting up to seven days downstream of the falls, where the river has carved out a magnificent gorge. Only fly fishing is permitted, and this is strictly on a catch and release basis between the months of September and April. All proceeds from fishing licences go to the local guides and to the Maletsunyane River Conservation Fund. Katse Dam & Botanical Gardens Located some 2 000 metres above sea level in one of Lesotho’s most popular tourist areas, Katse is the largest of the five dams built as part of the Lesotho Highlands Water Project – the greatest engineering project in the Southern Hemisphere when it was built in the 1990s. This impressive dam boasts the highest dam wall in Africa (185 metres) and is one of fewer than 30 double curvature concrete arch dams in the world, as well as being among the top ten biggest concrete arch dams in terms of its volume. This marvel of modern engineering has become a must-see tourist attraction which continues to draw many visitors. Katse is best viewed from the Mafika-Lisiu Pass, where there is a car park and view site. The now-renovated Katse Information Centre includes a model of the dam showing the series of tunnels and pumps which form part of the water transfer scheme. Guided tours are offered daily at 09:00 and 14:00. Established in 2009, Motebong Mountain Lodge is situated on the banks of the Katse Dam and provides accommodation in fully equipped selfcatering cottages. Its high altitude makes it ideal for training, and the lodge has previously served as a training camp for South Africa’s rowing team. Responsible tourism is key, and the lodge has undertaken various initiatives in and around the neighbouring Ha Lejone community, sourcing and mentoring staff from the village as well as supporting community enterprises and individual business initiatives. TOURISM 34

MMA has helped to develop and encourage a wider range of tourism services and products in the area, including tours of historic Morija and dinosaur footprints, walking trails, bird watching and pony trekking, guest houses, a conference centre, traditional village experiences and home-stays. Morija Guest House holds regular ‘Sesotho Language and Culture’ weekends where participants learn the basics of the Sesotho tongue and acquire useful knowledge of Lesotho’s history and culture.

During 2016, the tourism sector attracted capital investment of M707.9 million, or 7.2 percent of total investment, and the World Travel & Tourism Council expects this figure to grow by 4.4 percent per annum over the next ten years to reach M1 053.4 million in 2027. Lesotho’s flora is uniquely adapted to the afroalpine environment. Near the Katse Dam are the Katse Alpine Botanical Gardens, which were created to preserve some of the indigenous flora that was displaced in the construction of the dam, especially orchids and the spiral aloe, Lesotho’s national flower. The garden’s setting of paved hillside trails, rock gardens and flowers displays the country’s diverse mountain flora and plant heritage in a natural setting, as well as preserving rare and endangered species. There are two tours per day, at 09:00 and 14:00, Monday to Friday, and 09:00 and 11:00 on weekends and public holidays. Culture and heritage Lesotho’s proud cultural traditions are underpinned by a constitutional monarchy and the legacy of the nation’s celebrated founder and leader, King Moshoeshoe I. Cultural tourism has the potential to play a central role in economic development, and Lesotho boasts a number of must-see cultural

attractions, including rock art sites, cultural villages and national monuments. Established in 1956, the Morija Museum & Archives (MMA) lies just over 40 kilometres south of Maseru. It contains valuable archival material and museum collections, which have been growing incrementally since the 19th century and today form the basis for research and publishing as well as exhibitions and educational programmes for schools, visitors and tourists. The museum is also involved in a range of arts and culture projects, as well as heritage and community-based tourism initiatives. MMA opening hours are 08:00-17:00, Monday-Saturday, and 12:00-17:00 on Sundays. It is closed on Easter Sunday, Christmas and New Year’s Day. (tel +266 2236 0308). Officially launched in August 2015, The Hub is a not-for-profit creative technology lab operating as a subsidiary project of the Morija Museum and Archives. It aims to provide the community of Morija and its surrounding areas – particularly the in- and out-of-school youth – with affordable access to computers, the internet and digital media training on a range of subjects, including basic computer training, photography, film making, and creative writing. The Hub has recently published a magazine – WordPower 2017 – which features short stories and poems by 12 young writers from Morija.

The Royal Archives, Museum and Information Resource Centre is located in Matsieng Royal Village, the 1858 settlement of Letsie I which became the traditional capital of the Basotho after Thaba-Bosiu. The Royal Archives were established in March 2008 by the royal family and are administered on its behalf by professionals in various fields of academia. It houses pre-colonial and post-colonial records (paper-based, digital and electronic) relating to chieftainship in Lesotho, as well as cultural objects. The Royal Palace and homestead are nearby, and the centre provides guided tours to Paramount Chief Letsie I’s settlement. The ‘Seriti sa Makhoarane’ (The Prestige of Makhoarane) initiative is based upon a stronger partnership between Morija Museum, the Royal Archives & Museum (Matsieng) and various surrounding communities, all of which are connected to the descendants of King Moshoeshoe. Many heritage features have been documented and key informants interviewed, leading to the production of a 54-minute film ‘Ho llela borena’ (Yearning to reign). New tourism products and services are also emerging and these should be of interest to visitors to Lesotho. See www.morija.co.ls or the Facebook page (morija.co.ls) for more news about Lesotho’s ‘Valley of the Kings’. Once serving as the mountain fortress of King

Moshoeshoe I, the national monument of ThabaBosiu is one of Lesotho’s most famous sites because it is here that the Basotho nation was built. Situated about 25 kilometres east of Maseru in the Phuthiatsana river valley, Thaba-Bosiu comprises a steep, flat-topped mountain, its summit encircled by a belt of perpendicular cliffs which tower over the surrounding valley. From here, King Moshoeshoe successfully defended the Basotho people against their attackers for many years. There is a visitors’ information centre at the base of the mountain, and guided tours are available to the summit. Moshoeshoe’s grave – a cairn of stones – can be seen at the burial place on the hilltop, as can his restored two-roomed house nearby. The summit also affords commanding views of the countryside, including Qiloane pinnacle which inspired the topknot on the Basotho hat. Located below the visitors’ information centre, the privately-managed Thaba-Bosiu Cultural Village (TBCV) complements the nearby national monument. It was developed to showcase the traditional Basotho lifestyle, illustrated in aspects such as housing, entertainment, arts, crafts and indigenous plants. Visitors can experience Sesotho life within a typical village setting, consult a traditional doctor, and sample Sesotho beer. There is a site museum and interpretative centre, with constituent tribes of the early Basotho represented as well as Stone Age cave-dwellers and the arrival of Colonial forces. Other features include 41 chalets providing accommodation for visitors, a 250-seat conference centre, live-performance amphitheatre with a capacity of 800, ceremonial spaces, botanical gardens and handicraft outlets. The village is also the venue for a variety of annual events. Hidden beneath an overhang in the pink and orange sandstone cliffs some 25 kilometres east of Teyateyaneng lies the mysterious Kome Cave Village. These sheltered dwellings were built in the early decades of the 19th century by Chief Teleka of the Basia as a refuge from the marauding cannibals who inhabited the area. Ha Kome village is near Ha ‘Matjotjo, where the notorious cannibals’ hideout of Malimong and Bokhopa Mountain is to be found. Picnics, pony trekking and a tour of the

MORIJA, CULTURAL HEART OF LESOTHO FOR THE BEST IN HERITAGE, LIVING CULTURE & THE ARTS Including Morija Museum & Archives The Hub, Amphitheatre, Café Mojo Maeder House Art Gallery, Morija Arts Centre Accommodation, Catering & other amenities Regular Calendar of Creative Activities Hiking trails & tours, dinosaur footprints, pony trekking As well as nearby Matseng, The Royal Village, and much more! Tel: +266 2236 0308 / 0324 E-mail: info@morija.co.ls Website: www.morija.co.ls Facebook: morija.co.ls P.O. Box 12, Morija 190, Lesotho

cave village may be organised from the Kome Crafts and Information Office. The Bushmen, also known as the ‘San’, left behind a fascinating array of art in caves and rock shelters across Lesotho. The Masitise (Ellenberger) Cave House Museum in the vicinity of Quthing is part of an old mission house that was built into a San rock shelter by Reverend David-Frederic Ellenberger in 1866. Today it functions as a small museum with some good displays on local history and culture. Accommodation is available in rondavels or the caretaker’s cottage, and home-stays are offered in nearby Tsatsane. One of Lesotho’s most important rock art sites can be found at Ha Baroana in Nazareth, Maseru District, en route to the Mohale Dam. The paintings, which are to be found underneath an overhanging rock facing the Liphiring River, depict scenes of everyday life, like hunting and dancing, as well as animals such as leopard, lion and eland, blue crane and guinea fowl.

Fascinating dinosaur footprints preserved in sandstone may be found at Subeng Stream, about 8 kilometres north of Hlotse and an easy walk from the main Hlotse–Botha-Bothe road. The site features the footprints of several different dinosaurs that existed towards the end of the Triassic period. The fossilised footprint of ‘Kayentapus ambrokholohali’, one of the largest dinosaurs to ever roam the continent, was discovered during a university field trip to the Roma Valley in early 2016. This is a hugely important discovery, as it is a departure from established understanding of the types of dinosaurs that existed during the early Jurassic period around 200 million years ago: ‘Kayentapus ambrokholohali’ would have been some nine metres in length against the previous fossil records which point to sizes of roughly three to five metres in length. Lesotho is the second of only two sites in the world where large carnivorous dinosaurs dating to this period have been identified. It was previously thought that larger theropods such as the more widely known Tyrannosaurus rex only became prevalent during the Cretaceous period –

considerably more recent at 145 million years ago. Cultural events Held annually in March, Moshoeshoe Day is a national holiday commemorating the life of the country’s great leader, King Moshoeshoe I, who was a staunch defender of the language, art and culture of Lesotho. The main celebrations take place in Maseru, where visitors can witness the richness of local traditions. The 2018 Moshoeshoe Day celebrations are scheduled for 12 March. The Menkhoaneng to Thaba-Bosiu Historical Walk takes place every year at the end of March, and offers participants the opportunity of experiencing the richness of Basotho culture by reliving some of the challenges faced by the founder of the nation, Moshoeshoe I. The three-day long event begins at Lithakong tsa Moshoeshoe in Menkhoaneng, and traces the route taken by the Basotho to their future base at Thaba-Bosiu after surviving a vicious attack by the Batlokoa. Horse racing is popular in Lesotho, and the Semonkong Horse Race is held every July with the main aim of commemorating King Letsie’s birthday. In order to make the proceedings even more interesting, betting has been incorporated into the event. Horseracing in Semonkong is currently being promoted by the LTDC as it encourages tourism while generating revenue for the surrounding community, contributing to environmental preservation and conservation, and promoting social cohesion and integration. Now in its eighth year, the annual Lesotho Film Festival features both local and foreign films and takes place in November at a variety of venues. The festival was launched in 2011 by the NPO Sesotho Media and Development (SM&D) to give Basotho youth a platform to develop and showcase their film-making skills. A lifestyle, music and food celebration, the annual Lesotho Tourism Festival takes place every December. Activities include a jazz festival, divas’ concert, poetry, comedy nights, parties and a golf tournament. The main concert takes place at Thaba-Bosiu Cultural Village and attracts visitors from the SADC region and further afield. TOURISM 35

First held in 1999, the Morija Arts & Cultural Festival has showcased the richness and diversity of Basotho culture and talent in an effort to promote peace, unity and confidence among Basotho, growing to become Lesotho’s premier cultural event. The emphasis of the festival has been on reviving various aspects of Basotho culture through song, music, art and dance, while boosting tourism and promoting crafters and small-scale manufacturers. This has brought together people of different backgrounds to celebrate their own culture while experiencing the culture of neighbours and other residents of Lesotho. From the outset, Morija Museum played a key role in coordinating the festival, traditionally held every September or October over a period of four days, with attractions such as arts and crafts as well as cultural groups and performers – both traditional and modern – of music, dance, comedy and poetry from across Lesotho and neighbouring countries. A number of other events are held throughout the year as part of an on-going calendar of activities focused on art, culture, heritage and related areas including book launches, lectures, excursions, musical events and exhibitions. (www.morija.co.ls or e-mail: info@morijafest.com) Launched in 2015, Lesotho’s annual Arts, Innovation and Culture Week takes place in September/October and focuses on Basotho culture, music, fashion, film, food, performance art and social structure. People are urged to dress in traditional outfits and eat traditional dishes, as well as to use and wear products made in Lesotho and take part in the array of activities on offer. Botha-Bothe Tourism Information Centre is the first point of contact for tourists entering Lesotho through the Caledonspoort Border Post. The Botha-Bothe Peach Festival established in 2013 blends tourism, agriculture and small enterprise development initiatives. This festival is usually held during the peach season between February and April, and showcases peach products as well as handicrafts, vegetables and traditional TOURISM 36

Abseiling at the Maletsunyane River © Ant Grote/Semongkong Lodge

Maloti-Drakensberg Park. Together they cover an area of 249 313 hectares: the largest protected area along the great escarpment of Southern Africa. This is not only the most important water catchment area of two countries but also an area of significant global biodiversity, characterised by unspoiled mountain scenery and a unique yet fragile ecosystem. The park provides a vital refuge for many endemic plant species and their associated fauna, particularly endemic highland birds, and there are rock art sites with Bushman paintings and other archaeological and cultural resources of universal significance.

music. Peach trees are prevalent in Lesotho, and their pink blossoms create a beautiful spectacle during the spring months.

NATIONAL PARKS & RESERVES Lesotho’s national parks and reserves are under the jurisdiction of two different entities – Lesotho National Parks (+266 2231 1767), which manages Sehlabathebe National Park, and Lesotho Northern Parks (+266 2246 0723). Presently administered by Lesotho Northern Parks, Tšehlanyane National Park, Bokong Nature Reserve and the Liphofung Cave Cultural Historical Site were originally established by the Lesotho Highlands Development Authority (LHDA) to compensate for the loss of biodiversity caused by the Lesotho Highlands Water Project (LHWP). The affected communities have benefited through tourism projects in these areas, and receive a 10 percent share of all park collections in the form of community development projects. Lesotho’s first national park, Sehlabathebe National Park is situated above the Drakensberg escarpment bordering South Africa. Proclaimed in 1970, this remote and rugged park has an average elevation of 2 400 metres and, covers 6 500 hectares of elevated mountain plateau, characterised by high-

altitude grasslands, alpine flora, waterfalls, lakes and impressive sandstone rock formations. It is home to eland, rhebok and the secretive oribi antelope, wild cats and jackals, and birds of prey such as the black eagle and rare bearded vulture. This pristine environment makes Sehlabathebe ideal for eco-activities such as guided hiking, rock climbing and pony trekking, and there are some good fly fishing sites and San paintings. Day hikes include those to Bushman’s Pass at the edge of the escarpment or to the Tsoelikane Waterfall, with its beautiful, deep pool. The lodge here comprises a restaurant, self-catering rondavels and conference facilities. There is also a campsite near the Matebeng Pass, and home-stay ventures in nearby Thamathu. The development and subsequent management of accommodation facilities and other nature-based tourism ventures has contributed toward sustainable livelihoods for local communities through job creation and the establishment of joint ventures. Considered to be of outstanding universal value because of its exceptional natural beauty and aesthetic importance, Sehlabathebe National Park was proclaimed a World Heritage Site in 2013. As an extension of the adjoining uKhahlamba World Heritage Site, the two parks are now known as the

Reaching an altitude of 3 090 metres above sea level, the Bokong Nature Reserve is the highest reserve in Africa that is accessible by motor vehicle. Bokong lies at the head of the Mafika-Lisiu pass, 72 kilometres from the border post at Ficksburg and 80 kilometres from the Caledonspoort border post. An impressive visitors’ centre has been developed on the edge of a sheer, 100-metre cliff, and affords breathtaking vistas of the highlands and the impressive waterfall which is formed where the Lepaqoa River drops down into the valley below. In winter, the waterfall becomes a dazzling ice sculpture set in a snow-dusted landscape. This 1 970-hectare reserve is home to an impressive variety of birdlife, and visitors may catch a glimpse of the rare and endangered bearded vulture as well as a number of other bird species endemic to the afro-alpine zone. Other wildlife comprises vaal rhebok and baboons, as well as colonies of endemic ice rats. Bokong also contains excellent highaltitude wetlands at the sources of the Bokong River and Lepaqoa Stream. Government is presently seeking private investors in Molimo Nthuse Lodge, Bokong and Liphofung chalets, Thaba-Chitja Island and Sehlabathebe chalets. Hikes may be taken from Bokong across the ‘Roof of Africa’ into the Tšehlanyane National Park to the north. While this challenging three-day

trail covers a 40-kilometre route, with overnight accommodation in two simple huts, there are also a series of less strenuous day trails and interpretive walks. The use of a local guide is strongly encouraged due to the unpredictable nature of the weather at these high altitudes. Other attractions include interesting rock shelters close to the visitors’ centre, restful picnic sites, a reconstructed cattle post and pony trekking. Accommodation is available in self-catering units. The largest of Lesotho’s Northern Park reserves, Tšehlanyane National Park is a protected area located deep in the front range of the Maloti Mountains at the junction of the Tšehlanyane and Holomo rivers. The park is reached along a 32-kilometre gravel access road (negotiable in a two-wheel drive) that leaves the main A1 route about six kilometres southwest of Botha-Bothe and parallels the Holomo River as it passes through a picturesque valley. Tšehlanyane encompasses over 5 600 hectares of unspoiled mountain terrain containing exceptional scenic, natural and wilderness features and preserving significant biodiversity. It has one of the very few indigenous woodland areas (Leucosidea forest) in Lesotho and contains a number of undergrowth plants that are unique to this habitat. The park also boasts some mountain fynbos as well as berg bamboo on the banks of the streams which provide a habitat for the endangered butterfly species Metisella Syrinx. Small game animals are to be seen and birdlife includes bearded vulture and ground woodpecker. The five-star Maliba Mountain Lodge and threestar Riverside Chalets are situated inside the park. In light of the spectacular scenery, there are many opportunities for photographers. Visitors may also take a six-hour circular hiking trail, go pony trekking in the mountains or swim in the reserve’s many streams and pools. Furthermore, there are moves to transform the small village of Mabeleteng, which is situated close to Tšehlanyane National Park, into a tourist hub producing local arts and crafts as well as offering pony trekking and home-stays.

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© Anne Wade The 4-hectare Liphofung Nature Reserve situated in the lovely ‘Moteng Valley, surrounded by high mountains and beautiful scenery, is home to one of Lesotho’s smallest but most intriguing national heritage sites – Liphofung Cave. This large sandstone cave contains rich archaeological deposits and some of the country’s best examples of rock art, with a number of paintings featuring the eland after which this reserve is named. Once a San shelter, the cave was later used by King Moshoeshoe I when visiting the area. It can be reached along a 7-kilometre concrete road just off the main route from Botha-Bothe to Oxbow and Mokhotlong. Liphofung has been developed with the focus on cultural education and the preservation of the rock paintings along with early Basotho history. There is a small visitor’s centre and displays of Basotho culture and San rock art, along with ablution facilities and a craft outlet. Local guides are available to interpret the historical, cultural and natural significance of the site and the area as a whole. Self-catering accommodation facilities have been built which complement the traditional huts of the visitor’s centre. Accommodation is also available at Mamohase B&B, a renowned rural home-stay facility at a nearby village.

TOURISM INVESTMENT Enjoying the highest altitudes in southern Africa, Lesotho has naturally clean, crisp mountain air and an abundance of water sources and bodies. These attributes, together with the scenic beauty of the country’s landscape, have created a host of tourism investment opportunities that cover everything from extreme adventure to eco-tourism and leisure activities.

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every year. Long south-facing slopes offer opportunities for the development of ski slopes in Kotisephola (Mokhotlong District) and Sehlabathebe (Qacha’s Nek District). Water sports and boating excursions – The Lesotho Highlands Water Project (LHWP), with its mighty dams constructed in the central highlands, has great potential for the establishment of water-based adventure centres and investment in cruise boats of not less than 100 people. Accommodation facilities – These are mostly located in Maseru city and major district towns, and the LTDC is encouraging investors to consider positioning new accommodation developments at prime tourist attractions where there are at present few or no facilities offering international quality services to travellers. Health and wellness resorts – Lesotho is proud of its authentic tourism attributes that offer travellers a true African wilderness characterised by tranquillity, clean air and skies, and clean water free from equatorial diseases such as bilharzia and malaria. These features are crucial for destinations offering health and wellness facilities to outpatients and those escaping the hustle and bustle of city life to rejuvenate mind, body and soul. Lesotho’s many pristine areas offer an opportunity to establish health and wellness resorts.

Over the years, the Government of Lesotho has invested in infrastructure programmes to make the rugged terrain more accessible and pave the way for development. In addition, a series of studies have been undertaken to establish the viability of proposed tourism initiatives, as well as vigorous marketing of such opportunities in line with the new Lesotho tourism brand identity. The LTDC provides professional services to investors both before and after investment, assists foreign investors in obtaining clearances (residence permits, work permits, licences, etc) and provides investment advice.

The Lesotho National Development Corporation and Makeka (Pty) Ltd are presently looking for investors to assist in developing the world’s highest altitude eco-distillery for the production of spirits from agave and other sources. There are also plans to build a 20-bed, four-star boutique hotel at a demonstration farm in Botha-Bothe, with an onsite spa, restaurant and events venue. Subsidiary business activities include the production and sale of agave by-products such as cosmetics and furniture in the longer term.

The following areas have been identified for investment: • Ski resorts – Lesotho experiences snowfall in the mountains between May and August

Contact the Lesotho Tourism Development Corporation: PO Box 1378, Maseru; tel +266 2231 2238; fax +266 2231 0189; e-mail: ltdc@ltdc.org.ls; website: www.visitlesotho.travel TOURISM 37

Environmental Conservation

Lesotho has a highly fragile environment, characterised by a variety of environmental stresses that are driven by adverse climate conditions as well as human activities. © Anne Wade Ranked among a group of nations that are highly susceptible to climate change, the mountainous nation of Lesotho is particularly prone to drought, soil erosion and land degradation, desertification, deforestation, loss of biodiversity, and degradation of wetlands and mountain sponges. These challenges are exacerbated by climate change and further hamper efforts to attain sustainable development and food security. Reversing environmental degradation and adapting to climate change are among the key goals of Lesotho’s Vision 2020, and are part of the National Strategic Development Plan (NSDP) 2012/13– 2016/17, which focused on incorporating sound environmental policies and land use planning into strategies for sustainable growth. Fundamental issues include protecting water sources through integrated land and water resources management, as well as methods of boosting the environment’s natural resilience to climate change, conserving biodiversity and exploring environmentally friendly production methods. The Lesotho Meteorological Services (LMS), which falls under the Ministry of Energy and Meteorology, is the coordinating agency charged with monitoring and reporting on weather, climate and climate change issues. A National Climate Change Committee (NCCC), which serves as an advisory body to the LMS, was formally established in 2013 to coordinate Lesotho’s climate change issues. ENVIRONMENTAL CONSERVATION 38

Recent accomplishments by Government in the area of environmental conservation include the publication of the National Lesotho Environment Outlook Report, which emphasises the necessity of tackling the underlying drivers of environmental degradation. Recommendations include strategic backing for growth which takes the fragile nature of the environment into consideration. This can be achieved by developing an integrated methodology for local and national planning, and the enactment of suitable policies in areas such as tourism, land, water, biodiversity, conservation, health and mining. Other recent achievements by the Ministry of Tourism, Environment and Culture comprise the development of information, education and communication materials on persistent organic pollutants and waste; a national assessment of mercury inventories and a review of regulatory instruments; and development of the Maloti Drakensberg Park (MDP) Fire Management Plan. In order to increase biodiversity and promote the sustainable use of the environment, the Ministry’s medium-term goals involve: • Protecting and conserving flora and fauna resources inside and outside protected areas and ensuring their effective and efficient management • Supporting communities and entrepreneurs to develop and implement sustainable projects • Establishing appropriate environmental institutional bodies; for example, a Radiation

Protection Agency, Lesotho Environment Management Authority, and National Biodiversity Agency Lesotho’s recurrent budget for environmental management was set at M12.168 million for 2017/18. Development budget finances amounted to M60 000 for ‘Monitoring of Environment and Security’ and M650 000 for ‘Early Implementation and Ratification of the Minamata Convention on Mercury’, with both these projects being undertaken with funding from the Global Environment Facility (GEF). The US $385 000 project ‘Enabling Activities to Review and Update the National Implementation Plan for the Stockholm Convention on Persistent Organic Pollutants (POPs)’ is also funded by the GEF, with implementing agencies comprising the United Nations Industrial Development Organisation (UNIDO), and executing agencies being the Department of Environment and Ministry of Tourism, Environment and Culture. Climate change: a call for action Lesotho’s Prime Minister, Dr Motsoahae Thomas Thabane, underlined the challenges the country is facing due to climate change while addressing the 72nd Session of the General Assembly of the United Nations (UN) in New York in September 2017. His speech focused on the devastating impact of prolonged droughts due to the El Niño effect,

which has gripped the entire southern African sub-continent, leading to food shortages and other hardships. He called for urgent action in accordance with the Paris Climate Change Treaty concluded in 2016, and reiterate the appeal that small countries like Lesotho be empowered with technologies to deal with and adapt to climate change challenges. Prime Minister Thabane has called on the international community to continue mobilising and providing additional financial resources for climate-friendly technologies to address the urgent adaptation and mitigation needs of Africa and other developing countries.

ENVIRONMENTAL ISSUES Lesotho’s primary environmental challenges include severe land degradation, inappropriate agronomic practices and overgrazing. Coupled with the impact of climate change and socioeconomic issues, these challenges threaten sustainable production, nutrition and food security. According to the BTI 2016 Lesotho Country Report, since more than half of Basotho engage in some form of subsistence farming, the economic prospects of the country and the lives of many ordinary citizens are inextricably linked to the state of the environment.

As Lesotho is a mountainous country, farming is often undertaken on slopes with fragile soil formations. The effects of climate change are especially noticeable in excessive levels of soil erosion caused by water run-off. The country is estimated to be losing about 40 million tonnes of arable soil per year as a result of a combination of factors, including perennial drought, population movement and poor land management practices, with the resultant sedimentation affecting river ecosystems while also exacerbating air and water pollution. Furthermore, Lesotho’s natural resources are being unsustainably exploited, with the overharvesting of biomass such as fuel wood, which is used to provide energy for cooking and/or heating. Although there are many opportunities for the production of renewable energy in the form of wind and solar power, and the country already produces clean energy in the form of hydropower, this is not yet accessible to most citizens. In urban areas, environmental issues relate in particular to air and water pollution, with the pace of urbanisation intensifying the existing capacity challenges among local authorities. While Lesotho’s CO2 emissions remain relatively low, they have nonetheless doubled between 2000 and 2015. The proportional contribution of the three key sectors to greenhouse gas emissions is: agriculture (63 percent), energy (31 percent) and waste management (6 percent). This depicts Lesotho’s socioeconomic circumstances, characterised by an economy dependent on natural resources, a low but growing energy sector and an industrial sector that is still in its infancy. Water Security and Climate Change Assessment Released in September 2016, the World Bank report entitled ‘Lesotho Water Security and Climate Change Assessment’ looks at the challenges faced with regard to water management, against the backdrop of habitual droughts, floods and future climatic variations in the region. Projected temperature increases due to climate change will have a detrimental impact of Lesotho’s water security, patterns of agricultural production and future opportunities to develop water transfer infrastructure. Simulations show that the continued

development of existing water infrastructure, particularly in the lowlands, is central to improving both reliability and resilience. The report recommends investing in monitoring and enhanced data acquisition to develop more sophisticated analyses of the complex issues surrounding natural resources. Better data in respect of agriculture, water and climate will help Lesotho to seize future opportunities while avoiding risks. Land cover database Development of the National Land Cover Database has been undertaken by the Food and Agriculture Organisation (FAO) in partnership with the Lesotho Government through the Committee for Environment Data Management (CEDAMA). Up-to-date information on the status of natural resources is essential for evidence-based decision making, and the land cover database provides an important baseline for planning sustainable land management interventions and broader natural resource management activities. The database, which covers the entire territory of Lesotho, has been developed through a multispectral image fusion technique using satellite imagery and aerial photography. This newly enriched dataset will strengthen organisational capacities in the generation and utilisation of spatial information for natural resources, agriculture management and agro-environmental studies. Furthermore, it will build and support the dialogue and technical information flow among Government institutions, national and local authorities, farmers and stakeholders in natural resources management. The diverse range of applications includes:

• Land cover change analysis of agriculture, • • • • • •

forestry, rangeland, urban areas, etc. Disaster risk maps Erosion risk assessment Rangeland monitoring Above-ground biomass assessment and change Monitoring frameworks for integrated water catchment initiatives Development of a Land Resources Information System

POLICIES & PROGRAMMES

remote areas through the development of private sector led off-grids and energy trading centres.

Lesotho has adopted natural resources and sustainable land management practices through a number of sector-specific policies which tie in with the goals of the National Strategic Development Programme (NSDP).

Combating climate change Lesotho was one of the first countries worldwide to ratify the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol. It is thus committed to working towards halting the advance of climate change by eliminating or reducing its causes, as well as making adaptations to the emerging climate.

The National Environment Policy (1998) laid the legal foundation for the Environment Act of 2008, which provides for the protection and management of the land base against the negative impacts of infrastructure development. The Act introduced Environmental Impact Assessments (EIAs), audits and project monitoring. Other important acts include the Forestry Act of 1998, which provides for the protection and preservation of forests and calls for land to be made available for forestry activities, including fuel wood production, as a means of preserving indigenous shrubs and trees that guard against soil erosion. Introduced in 2008, the National Forestry Policy aims to increase Lesotho’s tree cover to at least 5 percent by the year 2020. The National Range Resources Management Policy of 2014 provides guidance for the development of effective strategies that combat land and vegetation degradation and motivate for improved legislation and the implementation thereof. The goal is to attain sustainable development and management of rangeland resources for enhanced biodiversity, optimum productivity and improved livelihoods of the population. The policy envisages a threetier structure, comprising national, district and community grazing associations. Used in conjunction with Sustainable Land Management (SLM), it enables extension officers to support communities with expertise on SLM techniques and practices, including rangeland management, conservation agriculture, water harvesting and wetland protection and rehabilitation. The Energy Policy of 2015 envisions that energy shall be universally accessible and affordable in a sustainable manner, with minimal negative impact on the environment. In particular, it sets goals to reduce fuel wood usage as well as other fossil fuels, and promotes renewable energy and energy efficiency, focusing on increasing energy access in

The UNFCCC requires Lesotho to submit periodic reports on levels of greenhouse gas (GHG) emissions, climate mitigation and adaptation activities, vulnerability analyses and policy recommendations. Furthermore, the Lima Call for Climate Action requires countries to develop and communicate their Intended Nationally Determined Contributions (INDCs) towards achieving the stabilisation of GHG concentrations in the atmosphere. As a Least Developed Country (LDC), special provisions apply to Lesotho’s INDCs to reflect its special circumstances. Against this backdrop, Lesotho submitted its Intended Nationally Determined Contribution report in September 2015, detailing a summary of national mitigation and adaptation contributions. This follows a series of inclusive national consultations on the nature of the country’s development trajectory between 2020 and 2030. The Strategic Plan for the Ministry of Energy and Meteorology (2015/16-2020/21) outlines key intentions in areas such as climate change mitigation and adaptation, including national energy initiatives. With support from the European Union, the ministry is developing a Climate Change Policy which will include a response strategy and guidelines for integration of climate change and related activities in the various sectors of the economy. While the energy sector will require additional investment in energy-efficient equipment, grid extension and rural electrification projects, these levels of investment are not affordable without financial support. Mitigation potentials in the waste management sector highlight the use of agricultural waste for energy. If just 20 percent of Lesotho’s estimated 310 000 rural households which depend on smallENVIRONMENTAL CONSERVATION 39

Ministry of Energy & Meteorology

LESOTHO METEOROLOGICAL SERVICES 2nd and 3rd Floor, Options Building, Pioneer Road • P.O. Box 14515, Maseru 100 2nd and 3rd Floor, Options Building, Pioneer Road • P.O. Box 14515, Maseru 100 • Headquarters: Tel: (+266) 22 32 5057 / 2231 7250 • Fax: (+266) 22 32 5057 • Email: mahahabisa@gmail.com Headquarters: Tel: (+266) 22 32 5057 / 2231 7250 • Fax: (+266) 22 32 5057 Weather Office: Tel: (+266) 22 35 0732 • Fax: (+266) 22 35 0325 •• Email: weatheroffice@gmail.com • Website: www.lesmet.org.ls • Email: mahahabisa@gmail.com Weather Office: Tel: (+266) 22 35 0732 • Fax: (+266) 22 35 0325 Improvement of Early Warning to Reduce Impacts of Climate• Change and Capacity •Building to Integrate Climate Email: weatheroffice@gmail.com Website: www.lesmet.org.ls Change into Development Plans Funded by the Government of Lesotho and Global Environment Facility CLIMATE CHANGE POLICY BRIEF

Project summary The project was launched in December 2011 and will be implemented until March 2016. Operating in six pilot sites in the districts of Quthing, Mafeteng and Thaba-Tseka, the project aims at building Lesotho’s capacity to formulate and implement effective adaptation responses to climate change impacts. This is to be achieved through fostering of resilient and sustainable natural resource management and piloting of best local adaptation programmes and technologies that will serve to inform future policy development. The project also aims at averting climate change induced human losses and disasters by strengthening the country’s climate monitoring and early warning capacity.

Achievements learned With unprecedented impacts on theand biophysicallessons environment as well as on social and economic growth and development, climate change is one of the greatest challenges facing mankind. Component 1: CLIMATE MONITORING, PREDICTING AND EARLY WARNING • The project procured and installed six sets of automatic weather stations (AWS), at Leribe, Mafeteng, Quthing, Thaba-Tseka, BothaSmall, mountainous, and landlocked developing countries such as Lesotho are highly vulnerable to the impacts of climate change. In recent years, the Bothe and Berea and are all fully operational. To ensure sustainability and provide after care maintenance of the stations, four country has experienced unprecedented and frequent droughts, which resulted in poor crop harvests and substantial livestock losses to rural farmers. technicians attended “training-of-trainers” course on management of the stations which included instrument calibration. Subsequently, farming, a major source of living in rural areas, is in steady decline thereby exacerbating poverty. Prospects for increased employment • The project also trained around 120 observers on the methods of observations and AWS management. creation in this sector look gloomy. The country has also been struck by sudden, heavy snowfalls, strong winds, and floods, with devastating Component 2:and CLIMATE CHANGE POLICY AND environmental socio-economic impacts. Additionally, soil loss,PLANNING land degradation and loss of some biodiversity have accelerated while water resources • Produced GIS-based hazard maps focusing on key production sectors in three pilot areas community councils. have greatly diminished. • Trained 5 climatologists, who also trained experts in 11 sectors, on climate modeling downscaling, risk and vulnerability assessment. • Trained community Leaders, Ministries and central Planning Agencies on climate vulnerability and associated economic aspects. Lesotho has already undertaken numerous efforts to address the climate change challenge. This is exemplified by, among others, the country’s National • Established the National Climate Change Committee (NCCC) and is supporting its quarterly meetings since August 2013. The NCCC Strategic Development Plan which identifies: “to reverse environmental degradation and adapt to climate change” as one of the key strategic objectives. provides platform for cross-sectoral dialogue on climate change adaptation, policy and planning at national level and is the advisory Secondly, the country has made major strides in advancing the use of renewable energy sources. To this effect, Lesotho is referenced, worldwide, as a body to the Ministry of Energy and Meteorology on climate change issues. • Conducted policy analysis to produce sectoral briefs for the national climate change policy. country that uses almost 100% clean energy, with a steadfast commitment to do more, as part of national and global effort to address climate change in the context of sustainable development. Component 3: LOCAL ADAPTATION • Rehabilitated pastures through construction of stone-lines and seeding of fodder on degraded land and implemented grazing plans. Notwithstanding the above, hitherto, the country did not have a climate change policy. The absence of the Policy hindered efficiency and effectiveness of • Planted forest and fruit trees in the pilot areas. myriad of approaches and initiatives aimed at addressing climate change, hence the need for the formulation of the National Climate Change Policy. • Constructed spring tanks (water reservoirs) and dams to enable irrigation and drinking for animals during drought periods. • Tested seeds of climate-resilient maize and sorghum varieties. Spearheaded by the Ministry of Energy and Meteorology, the Policy formulation process entailed intensive nation-wide stakeholder consultations and • Provided trainings on various methods of climate-smart agriculture, management of new pests, diseases and weeds that are discussions. The main objective of the consultations was to gather views and recommendations. The consultations were also aimed at identifying key predicted to become more prevalent under future climate scenarios. issues/principles that would guide and inform the policy as well as resultant strategies. The consultations were to further serve as valuable platforms • The pilot communities received Potchefstroom Koekoex chickens and relevant training. These chickens are for dual purpose, with to ignite the very necessary dialogue on climate change and create the much needed awareness and education on climate change amongst the public, excellent laying capabilities as well as high meat production. • Improved wool quality and meat production in Thaba-Tseka through distribution of 10 merino rams and training of farmers on best thereby enhancing effective implementation of the Policy and the Strategy. livestock farming. The consultations yielded audacious goals which set out and embody a broad and fundamental nation-wide consensus that climate change demands the Component 4: PUBLIC AWARENESS EDUCATION society’s urgent and robust attention; and that theAND government has the responsibility to lead. • Undertook curriculum audit to identify potential areas of integrating climate change in the curricula. • Developed and launched climate change toolkit and its additional notes for teachers. The toolkit is piloted in 56 primary and The CCP is aimed at ensuring a coherent and well coordinated approach to addressing climate change in an efficient and effective manner in Lesotho. secondary pilot schools for the period September 2015 to March 2016. The policy provides strategic directions and coordination on issues of climate change, cognizant of its linkages with sustainable development. It identifies • Trained journalists on reporting climate change and making climate change stories marketable and awarded the best 13 stories/ major vulnerable areas and risks presented by climate change. radio and TV programmes. • Held three awareness campaigns in the three districts of Quthing, Mafeteng and Thabatseka. This was achieved through school competitions on debates, songs, poets and impromptu speeches and awards were given to best performances.

The CCP is based on the guiding principles of the various international conventions and protocols such as the UNFCCC, Sendai Framework and the Paris Agreement. To achieve the Vision and Objectives, the CCP calls for prioritization and implementation of the following core pillars: 1) Adaptation and climate risk reduction 2) Mitigation and low-carbon development pathways 3) Governance and institutional arrangements 4) Climate finance and investment framework 5) Cross-cutting issues (capacity building, gender youth and vulnerable groups). A total of 22 Policy Statements were developed based upon the key areas identified by the consultation process. Each policy statement is supported by a set of principles, key challenges, objectives and actions. The table below lists the Policy Statements, the proposed number of objectives and actions; TABLE 1: LIST OF POLICY STATEMENTS Policy Statement

Obj

Act

Strengthen climate early warning systems and improve climatic information, including Research and Systematic Observation (RSO)

Enhance the resilience of water resources. (by promoting integrated catchment management, ensuring access, supply and sanitation).

Develop/promote climate-smart agriculture and food security systems.

Develop/promote renewable energy sources and increase energy efficiency.

Promote climate resilience in mining sector

Adapt to climate change (and reduce) greenhouse gas emissions in industrial manufacturing.

Climate proof and increase efficiency of the tourism sector

Enhance best practice for forestry and rangelands to mitigate and adapt to climate change.

Increase the resilience of environment, ecosystems and biodiversity.

10 Address impacts on human health

11 Promote low-carbon and climate change resilient transport systems

12 Promote climate proof human settlements and infrastructure

13 Enhance the resilience of natural and cultural heritage.

14 Promote Agro – Ecological/District/local Level Approach to addressing climate change

15 Strengthen climate change governance framework

16 Promote participation of gender youth, and vulnerable groups

17 Promote the participation of the civil society

18 Promote the participation of the private sector

19 Implement Education, Training, Public Awareness and communication programmes

20 Promote Research and Development, Innovation and Technology Transfer

21 Mobilize financial resources

22 National Security and Migration

The 22 policy statements are expected to be implemented by a number of actors ranging from the ministries and institutions covering agriculture and livestock, forestry, environment, water, energy, infrastructure, health, mining, tourism, gender and youth. The academia and research, the private sector and the civil society also have a major role to play. The National Climate Change Coordination Committee (NCCC) has been formed to assist the Lesotho Meteorological Services (LMS) in linking and mainstreaming climate change issues in the respective sectors they belong to. Finally, the CCP recommends a Monitoring and Evaluation Framework. The objective of the Framework is to enhance effective policy implementation; ensuring appropriate utilization of resources; communication of results to decision makers and stakeholders for future action specifying performance indicators and targets for each policy priority and strategic action to be monitored. In addition, the implementation of this policy will undergo an independent external evaluation in five years’ time. The recommendations resulting from this evaluation will then feed into the revision process for the new policy.

Ministry of Energy & Meteorology

LESOTHO METEOROLOGICAL SERVICES 2nd and 3rd Floor, Options Building, Pioneer Road • P.O. Box 14515, Maseru 100 • Headquarters: Tel: (+266) 22 32 5057 / 2231 7250 • Fax: (+266) 22 32 5057 • Email: mahahabisa@gmail.com Weather Office: Tel: (+266) 22 35 0732 • Fax: (+266) 22 35 0325 • Email: weatheroffice@gmail.com • Website: www.lesmet.org.ls Improvement of Early Warning to Reduce Impacts of Climate Change and Capacity Building to Integrate Climate

Transfrontier Conservation and Development project was launched by the two countries’ environmental ministers and the World Bank, and management plans for the TFCA were completed in 2008.

scale farming have sufficient livestock (between three and five cattle) to install a domestic biogas digester to generate gas for cooking, the fuel wood use could be reduced significantly. The potential emissions reduction would be some 29 200 tonnes of CO2 per year. In the forestry sector, tree planting in degraded forest lands presents considerable potential for climate change mitigation. According to the latest mapping inventory, about 1.6 percent of Lesotho is covered in forests, which contain some 2 million metric tonnes of carbon in living forest biomass. If the current deforestation rate of 0.50 percent per year is reversed, it could potentially produce emission reductions of nearly 38 902 tonnes for each 200 hectares of tree cover. The cost of the reforestation option would amount to US $24 million between 2015 and 2030 for the 120 000 hectares of land to be reforested, with an initial establishment cost of US $200 per hectare. Furthermore, given that biomass consumption remains the main source of domestic energy, significant financial support would be required to subsidise fuel-efficient cook stoves and alternative fuels and techniques for cooking. The main opportunities for mitigation consist of energy efficiency and demand management, coupled with increasing investment in renewable energy programmes in the electricity, buildings (residential, commercial and institutional) and waste sectors. Lesotho is committed to unconditionally reducing 10 percent of its GHG emissions by 2030 against the Business-as-usual (BAU) scenario. The conditional target is 35 percent by 2030. Development partner assistance The ‘Strengthening Capacity for Climate Change Adaptation through Support to Integrated Watershed Management Programme’ aims to implement sustainable land and water management practices (SLM/W) and resource conservation measures in selected watersheds to reduce vulnerability and enhance adaptive capacity at community level. The focus is on crop, livestock and agro-forestry systems in the three most vulnerable livelihood zones. Approved for implementation in 2015, the US $2.089 million project is financed by the Least Developed Countries (LDC) Fund, and is being implemented by the FAO with the assistance ENVIRONMENTAL CONSERVATION 42

© CaraWade of a wide spectrum of government ministries and departments. The Least Developed Countries Fund was established in November 2001 under the United Nations Framework Convention on Climate Change to address the needs of least developed countries whose economic and geophysical characteristics make them especially vulnerable to the impact of global warming and climate change. The LDC Fund also finances ‘Reducing Vulnerability from Climate Change in the Foothills, Lowlands and the Lower Senqu River Basin’, an initiative to mainstream climate risk considerations in Lesotho’s Land Rehabilitation Programme for improved ecosystem resilience and reduced vulnerability of livelihoods to climate shocks. With a total cost of US $35.998 million, the project was approved in 2015 and is being implemented by the United Nations Development Programme (UNDP), with executing agencies including the Ministry of Forestry, Range and Soil Conservation and the Ministry of Gender, Youth and Sports.

BIODIVERSITY Factors threatening biological diversity include

habitat loss and destruction, introduction of alien (exotic or non-native) species, human-generated pollution and contamination, population growth, exploitation due to over-hunting, over-fishing or over-collecting, and global climate change. In Lesotho, specific threats are overgrazing, unsustainable harvesting (particularly of medicinal plants), uncontrolled fires, urban and agricultural encroachment, invasive alien species and pollution. Increased activity through tourism also poses potential threats. Among several conservation areas created in Lesotho by the Lesotho Highlands Development Authority (LHDA) in the 1990s to restore some of the biodiversity lost as a result of the LHWP are: Katse Botanical Gardens, Tšehlanyane National Park, Bokong Nature Reserve and the Liphofung Cave Cultural Historical Site. The Katse Botanical Garden is Southern Africa’s first botanical garden dedicated to featuring alpine species. LHDA initiatives are discussed in greater detail in the ‘Tourism’ chapter. Maloti-Drakensberg Transboundary World Heritage Site The Maloti-Drakensberg Transfrontier Conservation Area (TFCA), incorporating Lesotho’s oldest national park (Sehlabathebe) as well as the adjoining uKhahlamba Drakensberg Park in South Africa, was proclaimed in 2001. The Maloti-Drakensberg

This uniquely biodiverse region is now a World Heritage site, following the June 2013 inscribing of Sehlabathebe National Park as an extension to the uKhahlamba Drakensberg World Heritage Site in South Africa by the UNESCO World Heritage Committee. The Maloti-Drakensberg Transboundary World Heritage Site covers an extent of 14 740 square kilometres which encompasses the mountains that span the north-eastern border between Lesotho and South Africa – the magnificent Maloti and Drakensberg ranges. The area is an important centre of endemism for montane plant species and is home to more than 2 500 species of flora. In addition, this is the primary water catchment area for both Lesotho and South Africa, and its wetlands serve as an essential water purification and storage system. The caves and rock shelters of this spectacular natural location contain more than 600 sites of culturally significant and historically rich rock art, representing the spiritual life of the San people who lived in this area over a period of 4 000 years. This is the largest and most concentrated group of paintings in Africa south of the Sahara. The National Heritage Resources Act of 2011 provides for the preservation and protection of all the San engravings and paintings found in Sehlabathebe National Park. While there is a drive to improve tourism and related livelihood options in the area, challenges include the inaccessibility of some attractions as well as a lack of adequate resources to improve, maintain and expand tourism assets. The site is also under increasingly serious threat from various unsustainable land-use and management systems, as well as issues related to cross-border crime such as stock theft, drug smuggling and attacks on hikers, all of which call for more concerted and coordinated efforts for mitigation and management between Lesotho and South Africa. To counter these threats, a Transfrontier Security Strategy was developed jointly by the relevant agencies and is currently being implemented.

Agriculture Agricultural production in Lesotho is characterised by a large number of smallholder farmers, most of whom practice subsistence farming. Lesotho Sky © Wayne Reiche Lesotho’s primary sector is dominated by agriculture. The arable subsector is concerned primarily with rain-fed cereal production, while in the livestock subsector the focus lies on extensive animal grazing, wool and mohair production, and a fast-growing aquaculture industry. The crops and horticulture subsectors decreased their combined contribution to agricultural GDP by almost half between 2001 and 2011. However, over the same period, the livestock subsector increased its share from 47.2 percent to 62 percent.

There is a pressing need to commercialise agriculture in Lesotho, and Government has prioritised this as an important part of its growth strategy. Efforts to promote investment have been intensified, with agro opportunities to be found in crop farming, aquaculture, horticulture, livestock and food processing. In spite of current climatic and structural challenges, the sector does hold immense potential to drive economic growth through generating employment and reducing poverty levels.

As some 70 percent of Lesotho’s people live in rural areas, farming is an important livelihood activity for a significant proportion of the population, with most rural workers employed in private household activities which are predominantly agricultural in nature. Although overall productivity and the contribution of the sector to the country’s Gross Domestic Product (GDP) are quite low, agriculture remains one of the mainstays of the economy.

Agriculture in the economy The contribution of agriculture to Lesotho’s primary sector has continued to dwindle, largely due to challenges in farming compounded by unfavourable weather conditions, and crop and animal diseases which have constrained production. Furthermore, agricultural land is subject to soil infertility and erosion, and has become increasingly fragmented as it competes with land allocated to human settlement. In addition to climate mitigation measures, this calls for the application of modern agricultural methods.

According to the results of the FinScope Micro, Small and Medium Enterprises (MSME) Survey undertaken in Lesotho at the end of 2016, about one in four MSMEs (22 percent) are reported to operate in the agriculture sector. Of these, some 53 percent are involved in rearing livestock while 15 percent concentrate on growing crops.

According to the Central Bank of Lesotho (CBL), agriculture contributed an average of 7.0 percent to Lesotho’s GDP during the 2010-2015 period. In the CBL’s 2016 Annual Report, it was estimated that the agriculture, forestry and fishing subsector had contracted by 0.9 percent during the year against a drop of 4.4 percent in 2015, primarily

because of low rainfall associated with El Niño weather conditions during the ploughing season. Output recovered significantly during the 2017/18 crop year, with area planted having risen sharply by 139 percent over the previous year as rainfall increased.

STRENGTHENING AGRICULTURE Lesotho is a signatory to the Comprehensive Africa Agriculture Development Programme (CAADP) Compact, which commits the country to the aim of raising agricultural productivity by 6 percent per annum and allocating 10 percent of the national budget to agriculture. Government has undertaken to subsidise agriculture until such time that local farmers are adequately developed and local food reserves are stocked with sufficient grain crops. Current efforts to strengthen agriculture rest on sustainable commercialism and diversification, as well as the development of integrated value chains and marketing infrastructure. This includes building effective agricultural support institutions, improving risk management in the sector and reducing stock theft. In addition, the subsidy programme is being broadened across all subsectors, while conservation agriculture is promoted to enhance household food security and reduce vulnerability.

As announced in the 2017 Budget, the Ministry of Agriculture and Food Security will continue to subsidise all agricultural inputs and mechanical operations, roll out greenhouse and shade nets, rehabilitate irrigation schemes, manage and control the spread of animal diseases, undertake feasibility studies for commercial beef production, and construct wool sheds to boost wool and mohair production. The biggest challenges confronting farmers remain the impacts of climate change and affordable modalities for adaptation. A sum of M483.4 million was proposed for the Ministry to carry out these initiatives in the 2017/18 financial year. In the medium-term, the Ministry’s priorities include: • Increasing cereal crop production and enhancing food and nutrition security – At present, some 70 percent of grain crops consumed in Lesotho are imported. To reduce dependency on imports, the Ministry aims to ensure that agricultural inputs are available on time, thereby enabling farmers to increase production to at least meet local demand for staple food products. Relevant technical advice is provided to farmers so as to increase agricultural production and productivity as well as improve nutrition. AGRICULTURE 43

• Increasing production of high value crops,

livestock and cottage industry products – To enhance output in these areas, the focus is on programmes that will support improving the quality of wool and mohair, processing of food crops (food preservation) and livestock products, and that encourage the commercialisation process, as detailed in the National Strategic Development Plan.

• Prevention and control of animal and crop

diseases, parasites and pests – Livestock diseases and parasites, as well as crop pests such as army worm and diseases like fungi, have an adverse effect on agricultural production. Current strategies to prevent and control these diseases, pests and parasites include continuous surveillance for Foot and Mouth Disease (FMD) and awareness campaigns concerning possible pests and mechanisms for controlling them. These control measures will safeguard public health by tracking animal disease transmission to humans, and protecting consumers from food-related health issues.

• Improving farming institutions, extension

services, agricultural technologies, innovation and training – In addition to increasing farming incomes in the face of prevailing climatic condition, development of the value chain for high value products will be essential for sustaining commercialisation. This focuses on strengthening extension services for farmers at all levels as well as improving training modules and developing and promoting agricultural technologies.

Support from the Food and Agriculture Organisation Lesotho joined the Food and Agriculture Organisation (FAO) in 1966, and has enjoyed close cooperation with the organisation since the establishment of the country office in 1983. The main thrust of assistance has been on the formulation and implementation of policies, programmes and projects aimed at improving agricultural output, natural resources management, and food and nutrition security. More recently, important features of cooperation have included responses to agricultural emergencies, climate AGRICULTURE 44

change adaptation and promotion of sustainable land management principles and practices. Enhanced agricultural service delivery is another area of focus, particularly with a view to improving farming communities’ access to agricultural advisory services. The FAO’s current technical cooperation programmes in Lesotho include: • Technical support for the establishment of the Lesotho Soil Information System (2017-2019)

• Strengthening animal disease surveillance in Lesotho (2017-2018)

• Agrifood value chain profiling in support of the Zero Hunger initiative (2017-2018)

• Country Programming Framework and the

agricultural chapter of the National Strategic Development Plan (2016-2018)

Smallholder Agricultural Development Programme Running from 2012 until 2018, the Smallholder Agricultural Development Programme (SADP) aims to support smallholder farmers in exploiting opportunities and increasing productivity, as well as diversifying into market-oriented agriculture. The programme’s initial focus was on four selected districts with high agricultural potential: BothaBothe, Leribe, Berea and Mafeteng. Beneficiaries have been provided with grants and technical assistance to boost their productivity and market access, with projects in irrigated vegetable production, wool and mohair, dairy, piggery and poultry hatcheries, among others. The US $24.46 million project has to date benefited more than 55 000 farmers. The bulk of funding has come from the World Bank and International Fund for Agriculture Development (IFAD), with the Lesotho Government responsible for the balance. Supporting the promotion of high value crops and livestock products, more than 420 production facilities have been given to 50 866 farmers under the SADP.

In September 2017, the World Bank approved an additional US $10 million in financing from the International Development Association (IDA). These funds will continue support to smallholders in the initial four districts as well as those in Mohale’s Hoek and Quthing. Grants are awarded to farmers to test and demonstrate new business initiatives and technological innovations, especially those that focus on climate-smart agriculture. Under the additional financing, farmer groups as well as government agencies will also be assisted in improving food quality and safety standards.

LIVESTOCK FARMING Livestock farming makes up around 62 percent of agricultural GDP. The subsector comprises primarily cattle, sheep, goats, pigs and poultry. Cattle are raised primarily for subsistence, draught power, milk, fuel (dung) and meat, while pigs are reared solely for food. Sheep are kept for meat production and also provide wool and skins, with goats a source of meat as well as mohair and hides. The livestock subsector – in particular wool and mohair – has been singled out as one of the country’s most important value chains. Present challenges to the subsector include outbreaks of animal diseases and a lack of infrastructure to prevent and control the transmission of disease. The FAO is working to strengthen animal health services, and assists Government in improving disease surveillance systems. The development of a cadre of certified livestock breeders is proposed under the National Strategic Development Plan, along with livestock improvement centres and other facilities to enhance the breed quality and production capacity of wool and mohair, poultry, piggery and other livestock subsectors. Cattle and pigs The latest statistics indicate that the country has 540 133 head of cattle, with numbers having dropped progressively in the last few years from a total of some 675 000 head in 2010/11. With around 13 500 metric tonnes produced per year, beef is the largest source of animal protein in Lesotho, and the country is self-sufficient in

production. This is followed by production of pork at 3 698 tonnes. While around four-fifths of meat sold at butcheries is supplied through informal slaughter, according to legislation, informally slaughtered meat is only for home or subsistence consumption. Apart from a few isolated instances, neither export nor import of beef takes place. The pig production sector is still in its infancy. It is dominated by large-scale farmers (41 percent), while small and medium-scale farmers account for 35 percent and 24 percent respectively. Almost all of the pork supplied to retail and wholesale outlets in Lesotho comes from South Africa through formal marketing channels. There is currently limited capacity in the production value chain and absence of accredited slaughtering facilities. Wool and mohair Sheep and goats are mainly utilised in the production of wool and mohair – products which are major income earners for Lesotho. Although wool and mohair are also used by local producers of tapestries and knitwear, a large proportion is sent to South Africa for processing and packaging before being sold in international markets such as Asia and Europe. The wool and mohair industry has been growing steadily, and generated revenue of M330 million in the 2015/16 financial year, up from M250 million in 2014/15. There are an estimated 37 500 farmers who rear a combined total of some four million sheep and goats and employ about 75 000 herd boys. The main pasturelands are located in the foothills and mountains of the Lesotho highlands, which provide favourable ecological conditions for extensive small stock production. The indigenous Merino sheep is hardy and well adapted to the environment, as are Angora goats. Wool and mohair are produced in the Quthing, Qacha’s Nek, Mokhotlong and ThabaTseka districts. Initiatives to support the industry include assistance through the SADP. This has taken the form of marketing support, training and mentorship, genetic improvement of communal flocks through

Association (LDFA) which aims to supply pasteurised and packaged fresh milk, initially to the Mokhotlong community but with plans to expand into other districts. The LDFA also received funding from the United Nations Development Programme (UNDP) and Global Environment Fund (GEF) to purchase land to set up the farm.

the introduction of quality rams, the construction of shearing sheds, and construction of a scouring plant in the Botha-Bothe district near Mokhotlong, where the highest population of wool producing sheep are to be found. Construction is set to begin in 2018 on a wool and mohair centre, following the purchase of a site in Thaba-Bosiu by the Lesotho National Wool and Mohair Growers’ Association. Wool and mohair from around the country will be stored here and prepared before being exported for sale. Farmers currently use the Livestock Products Marketing Services’ storage facilities before the wool and mohair is taken to Port Elizabeth, South Africa, for export. Having facilities to prepare and process the coats before export will prove more cost effective for Basotho farmers as well as creating employment. The centre would also support the establishment of a wool scouring facility, allowing further processing and possibly weaving as well. Poultry The Basotho Poultry Farmers’ Association (BAPOFA) acts as the legal regulatory body for the poultry sector, which comprises both commercial activities and village industries. The association attempts to encourage a supportive business environment through advocacy, training and provision of technical assistance in the development and implementation of enabling policies and laws. It also ensures that local produce is given priority over imported poultry products, and assists in regulating the price structure. The average annual growth rate of per capita poultry meat consumption is 1.3 percent. Most of this increase in demand is met by imports. The poultry value chain comprises three principal marketing channels: formal live bird markets (higher-income consumers); informal city markets (lower-income consumers); informal rural markets (rural consumers). Only some 20 percent of chicken is marketed through the formal sector. The main challenge in the industry is the high cost of inputs, many of which need to be sourced from outside the country. The lack of domestic hatchery services are a major

Fisheries Aquaculture plays an important role in the development of the fisheries industry, where potential has increased thanks to the dam reservoirs built as part of the ongoing Lesotho Highlands Water Project. Lesotho has two distinct fish farming zones; namely: • The Lowlands, where temperatures are relatively high.

Sheep migrating to new pastures © Anne Wade concern, and inadequate hatchery machines limit the growth of the industry. Most local poultry farmers have to import fertilised eggs and chicks from South Africa, which adds to the cost of the end product. It was announced in May 2017 that the National University of Lesotho (NUL) had developed an artificial egg incubator which would benefit the country’s poultry industry. The incubator has a capacity of 618 eggs, temperature and humidity control functions as well as an egg-turning device, and a hatching rate of over 80 percent compared with conventional egg incubators which have a hatching rate of between 50 and 60 percent. Once the market study has been completed, the University plans to attract investors to finance commercial production. Local organic chicken brand Ndu Chicken currently runs two farms, one at Ha Mabote and the other at Koalabata, and has a mini-abattoir with the capacity to process 3 000 birds per day. Dairy Dairy farming is a viable business proposition for both rural and peri-urban areas of Lesotho. Although most milk produced by farmers is used

for home consumption, there is also commercial production of raw milk for delivery to Lesotho Dairy Products (LDP). At present, the vast majority of locally consumed dairy products are imported from South Africa. Dairy has been declared a priority sector as regards food security, and Government is working to create a national platform to stimulate dairy development. The refurbishment of the LDP plant will enable all processing and packaging of milk to be done in Lesotho, thus avoiding the lengthy process of exporting milk to South Africa for processing. NUL has developed a yoghurt factory on its Roma campus under the name of Sebabatso Yoghurt, producing mixed berry, strawberry and fruit cocktail flavours. The facility, which requires a daily input of 200 litres of milk to process 250 litres of yoghurt, is set to benefit smallholder dairy farmers in the vicinity and further afield by enabling them to become part of the value chain. As of March 2017 the yoghurt project was being tested in the market and sold at outlets around the campus as well as in Maseru. Metropolitan Lesotho has injected M700 000 into the project. A M5.5 million commercial dairy project funded by Letšeng Diamonds was nearing completion in 2017. Based in Mokhotlong, the project is an initiative by the Liphamola Dairy Farmers

• The Highlands, characterised by cold climatic

conditions, which are suitable for the production of high-quality trout requiring clean, cold, well-oxygenated and fast-moving water at high altitude.

Commercial floating cage aquaculture for large rainbow trout (Oncorhynchus Mykiss), marketed as salmon trout, is undertaken at Katse Dam, a site known for its deep, pristine waters which create a highly favourable environment for growing premium trout. Steps have been taken to involve the surrounding communities so that they also benefit from aquaculture through jobs, training and skills development. Lesotho’s trout has become a favourite both locally and overseas (the Japanese market in particular), with approximately 800 tonnes harvested in 2016. It is expected that more than 3 000 tonnes per annum will be sold internationally by 2018. There are good prospects for expansion and additional enterprises of this nature in the Metolong Dam. One Thousand & One Voices®, a US private capital fund, has invested in the successful SanLei trout production and processing facility located on the shores of the Katse Dam. SanLei, which translated from Japanese means ‘where the mountains meet the sky’, produces sushi quality trout, primarily for consumption in Japan and South Africa, and AGRICULTURE 45

is the largest facility of its kind in Africa. SanLei has secured a strategic marketing and distribution agreement with CGC Japan Co Ltd, which has more than 4 000 stores and collective revenues in excess of US $40.5 billion, making it Japan’s largest joint procurement supermarket chain.

commercial investors and international distributors. The commercial production of apples, plums, peaches and apricots has been established for the local and South African markets, with fruit supplied to retailers such as Shoprite, Pick ‘n Pay, Game Fruit and Veg, and Spar.

According to the Lesotho National Development Corporation (LNDC), there are also opportunities for the farming of tilapia fish. Other potential investment areas comprise processing and packaging operations, including filleting, trimming and smoking; the extraction of Omega oils; facilities for genetic material production (ova/eggs and fingerlings); and fish food production.

INVESTMENT OPPORTUNITIES

ARABLE FARMING About 11 percent of Lesotho’s total land area is estimated to be arable, and only a small percentage of this is presently used for irrigated crop production. Annual precipitation is highly variable, both temporally and spatially, ranging from 500 millimetre per year to 1200 millimetres per year, most of which is received during the summer months between October and March. The main crops are maize, sorghum and wheat, which occupy, respectively, about 60 percent, 20 percent and 10 percent of agricultural land. Beans and peas are also grown. Summer season crops are those planted between 1 August and 31 January of the following year, and cover maize, sorghum, wheat, beans and peas, with wheat mostly grown in the mountain areas. Winter season crops are planted between 1 February and 31 July, and comprise both wheat and peas. In July 2017, the FAO forecast bumper cereal crop production for the year: a well above-average level of 238 000 tonnes. This marks a significant improvement over the drought-reduced level of 2016. A steep rise in maize production – forecast at 200 000 tonnes – accounts for the bulk of the increase. There was also a sharp increase, in relative terms, for sorghum production, with production set to reach about 28 000 tonnes in 2017. Prospects for the winter wheat crop, to be harvested in the last quarter of 2017, are also favourable, with AGRICULTURE 46

The Lesotho National Development Corporation (LNDC) is currently promoting the development of the agricultural sector through three specific projects: • Establishment of high-tech greenhouses for production of fruits and vegetables which will be processed at the Basotho Cannery. Haymaking © Anne Wade

• Establishment of a poultry slaughterhouse to

production anticipated to be around 10 000 tonnes. Favourable weather conditions following the onset of La Niña conditions were the main driver behind this year’s improved output, which encouraged a large expansion in area planted. Input support programmes by the Government and FAO also helped augment farmers’ productive capacity, enabling them to capture the benefits of the favourable seasonal rains.

Economic Diversification Project (PSCEDP II) aims to contribute to the development of select, non-textile sectors in Lesotho. Sponsored by the World Bank, the project has had as one of its main aims the objective of spurring growth in the horticulture sector, particularly the deciduous fruit market. Three pilot projects were implemented on farms in Thuathe, Qoqolosing and Mahobong between 2007 and 2013.

As such, imports of maize in the 2017/18 marketing year are forecast at approximately 55 000 tonnes against 135 000 tonnes in the previous marketing year. The bulk of Lesotho’s maize imports come from South Africa.

These pilot studies evaluated the feasibility of growing fruit and identified promising varieties and afro-climate locations, based on factors such as altitude, soils and access to water. Maps were drawn up to indicate areas where, for instance, the climate was favourable but additional infrastructure, such as electricity, was required. The research also indicated the massive potential for Lesotho to engage in the commercial growing of horticultural produce which could be harvested substantially earlier than the corresponding produce in South Africa, allowing for market infiltration two to three weeks before her neighbour. This knowledge has proven hugely beneficial to Government and business for planning purposes.

Food security status The FAO expects the food security situation to improve in 2017/18 thanks to the larger agricultural output and lower food prices. The Lesotho Vulnerability Assessment Committee’s (LVACs) integrated rural and urban assessment undertaken in June 2017 projects a total of 306 942 people food insecure from September 2017 to March 2018, putting Lesotho at Phase 1 (minimal) of food insecurity. In the previous year the number of food insecure citizens was estimated at about 709 000. Horticulture The Second Private Sector Competitiveness and

The project has subsequently been scaled-up to several farms over an area of 35 hectares and has achieved Global GAP (Good Agricultural Practices) certification as well as attracting interest from

process, package and market poultry products.

• Establishment of a commercial pig abattoir to process, package and market pork products.

LNDC is looking at developing and managing the greenhouse facility and distribution centre through a public-private partnership (PPP), and seeks a strategic partner with technical and managerial expertise in greenhouse production, marketing and distribution at local and/or international levels. Government is willing to contribute financially to the project through the LNDC. It is envisaged that the poultry slaughterhouse project will involve a PPP between LNDC and strategic partners. This will entail the enhancement of broiler supply to the slaughterhouse, establishing the slaughterhouse, and ensuring that quality products are marketed and distributed appropriately and timeously. The commercial pig abattoir project requires a strategic investor who will be involved in the development, construction and administration of the facility. Government will contribute financially, whilst LNDC will assume a coordinating role, gathering local producers into a national association to ensure quality control and appropriate training, improved feed/supplements, and sufficient animal supply to the abattoir.

Transport

Infrastructure

Lesotho’s road and aviation infrastructure is the backbone that connects both remote and urban areas of the country, improving access to service delivery centres and enhancing socioeconomic development.

The north access road from Ha-Motsoeneng to Metolong Dam © Metolong Authority Transport networks in Lesotho are dominated by road, which makes up more than 70 percent of domestic transport needs. Other modes include air and limited rail services, as well as ferry boats at river crossings, animal transport and pedestrian travel, especially in the sparsely populated highland areas. Lesotho’s rugged topography has made the development of road infrastructure and other transport networks a challenge. While this has had significant implications for transport modes and accessibility, the creation of an integrated transport system remains central to Government’s infrastructure development programmes. Cargo and passenger transport services are mainly provided by private sector operators in the freight, taxi and bus industries. Government is responsible for the Lesotho Freight and Bus Services Corporation, which manages a far smaller percentage of public road passenger transport services, mainly in areas and on routes where volumes are low and the private sector cannot operate a profitable service. The Ministry of Public Works and Transport owns and operates around 44 ferryboats at river crossings. Private operators, working longer hours, complement these services. Lesotho is connected to South Africa’s welldeveloped regional road network via a total of 11 border posts; those at Ficksburg and Maseru staying

open 24 hours a day (see ‘Useful Information’ for additional border post hours). Maseru is only 450 kilometres from the economic hub of Johannesburg and 575 kilometres from the port of Durban on the east coast, the destination of the vast majority of Lesotho’s manufactured goods, which are transported here by road or rail before being shipped overseas. Air transport services operate from Moshoeshoe I International Airport near Maseru to OR Tambo International in Johannesburg, South Africa, from where there are a wide variety of regional and international connections. There are also several rural airstrips which are used by light aircraft. The share of the transport and storage sector in GDP presently stands at 6.9 percent. Real GDP growth rates in the ‘transport and storage’ subsector have been pleasing in recent years, and the Central Bank of Lesotho (CBL), in its Economic Outlook 2015-2018 report forecasts further growth in the subsector of 5.92 percent in 2017 and 6.26 percent in 2018. Transport services are expected to benefit from low oil prices as well as prospects in the mining and construction industries.

TRANSPORT PRIORITIES The Ministry of Public Works and Transport

(MoPWT) is responsible for infrastructure provision and maintenance as well as creating an enabling environment for the private sector to develop efficient, cost-effective and safe transport services. This involves setting standards and guidelines to ensure operational efficiency in transport systems and infrastructure, and meeting Lesotho’s obligations regarding regional and international transport conventions. One of the Ministry’s vital priority areas is the restructuring and reform of the various transport subsectors to meet demand and improve service delivery. For example, it is problematic that the Department of Civil Aviation (DCA) is both a regulator and service provider, as this causes some issues to be overlooked, especially with regard to operations of the airport that are not in line with regulations. Other bodies needing urgent attention include the Department of Traffic and Transport and that of Road Safety, with the latter requiring a clear mandate to direct its activities. The chief objectives of the World Bank’s proposed Lesotho Transport Infrastructure and Connectivity Project (TICP) are to improve access to social services and markets in targeted rural areas, strengthen the country’s road safety management capacity and provide an immediate and effective response to eligible emergencies. This is to be realised by: improving road access through the application of output and performance based

contracts (OPRC) and construction of footbridges; improving road safety management capacity and mitigating road safety risks; and building capacity and strengthening institutions in the transport sector. Key results are expected to be realised in reduced travelling times and transport costs, a greater share of the population with access to a paved/all-season roads or footbridges, a reduced number of road traffic fatalities, and the creation of construction-related jobs. The first component, ‘Improving Infrastructure Access’, will include the construction of about 35 footbridges in isolated areas, along with a number of studies and services. The second, ‘Improving Road Safety’, addresses road safety in a more integrated manner in order to achieve Government’s objective of meeting the global decade of road safety aim of halving road deaths between 2010 and 2020. ‘Institutional Strengthening Support to the Transport Sector’ includes the necessary project implementation support, such as citizen engagement mechanisms, HIV/AIDS and gendertargeted activities, capacity building support to the Roads Directorate and MoPWT, preparation of the National Transport Master Plan, and technical assistance in designing and piloting communitybased maintenance schemes. ‘Contingency Emergency Response’ allows for the possibility of accessing resources in the event of an eligible crisis or emergency to provide an immediate and effective response to said crisis or emergency. TRANSPORT INFRASTRUCTURE 47

Regional transit routes As a landlocked country, Lesotho faces specific transport challenges which are addressed on a regional level in the Almaty Declaration on Landlocked Countries. The development of transit corridors in the Southern African Development Community (SADC) is essential for increasing industrialisation, regional integration and development, connecting areas of production (mines, agriculture and industry) with domestic, regional and global markets. However, infrastructural bottlenecks along these corridors, such as poorly maintained railway lines, roads and bridges, sub-optimal border logistics and complex customs procedures, often result in high transport costs and long transportation times. SADC’s Protocol on Transport, Communications and Meteorology ensures the cooperation of member states in facilitating the free movement of people and goods through the region, particularly from landlocked countries to seaports, and calls for the creation of Corridor Planning Committees to focus on specific strategies for development along the region’s principal routes. The Common Market for Eastern and Southern Africa (COMESA) and East African Community (EAC) are also working toward the development of transit corridors, with the emphasis on reducing transportation costs and enhancing regional competitiveness. The Transport Sector Plan (TSP) of the SADC Regional Infrastructure Development Master Plan (RIDMP) presents an analysis of transport infrastructure, including current and future infrastructure requirements up to 2027. It is focused on providing transport infrastructure services, policy and legislation, an enabling environment, and supportive institutions with the necessary human resources and capacity to transform the sector. The key objective is to identify hubs and gateways for rehabilitation and development in order to ensure that the passenger and goods markets are adequately catered for. The TSP also addresses the need to develop appropriate, integrated, safe, secure and efficient infrastructure capacity along strategic transport and development corridors with regard to road and rail networks. Lesotho and South Africa have formed a Joint Bilateral Commission on Cooperation to oversee the development of cross-border transport within the parameters of the SADC Protocol on TRANSPORT INFRASTRUCTURE 48

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ROAD TRANSPORT Lesotho has an unevenly distributed road network due to its mountainous topography which poses a particular challenge to the expansion and maintenance of road infrastructure. Although the lowlands and foothills are relatively well served, they constitute just a quarter of the country’s total area. Arterial roads connect all districts in Lesotho to 11 border crossing points with South Africa, but relatively fewer rural roads connect villages and towns in the highland districts of Thaba-Tseka, Mokhotlong, Qacha’s Nek and Quthing that constitute the remaining 75 percent of the country. Isolated rural populations still struggle to access basic services, agricultural markets and business opportunities due to limited road connections and bridge access across rivers.

The maintenance of the road network, both routine and periodic, is financed from the Road Fund and the Government budget. Much has been achieved under the World Bankfunded Integrated Transport Project (ITP), which concluded in 2016. Planning and implementation support, which was provided both at the central and local government level, saw the development of a blueprint for planning and change management, appointment of a road safety advisor, and development of the needed systems, plans, studies and technical manuals. Operating within the ambit of the MoPWT, the semi-autonomous Roads Directorate was established under the Roads Directorate Act, 2010. Furthermore, some 500 kilometres of local roads were transferred to the Ministry of Local Government in line with Lesotho’s decentralisation policy. At project closure, the Roads Directorate was fully operational and 87 percent of the periodic

and routine maintenance requirements of the total national network were funded through road user charges (the Road Fund) against a target of 80 percent. The upgrading of the Lesotho Road Management System (LRMS) was completed to provide a mechanised road condition survey. Furthermore, 40 kilometres of non-rural roads has been rehabilitated as per the revised target and as compared with the original target of 20 kilometres. Other noteworthy outcomes under the ITP included: • 38 percent of roads were reported by the LRMS to be in good condition and 50 percent in fair condition, as compared with the original target of 39 percent in good condition and 46 percent in fair condition • Average travel costs in targeted project areas fell by 40 percent, exceeding the original target of 20 percent • 42 percent of the rural population had access to an all-season road within the project area as per the revised target at project closure • 9 372 people, of which 52 percent were women, benefitted from the project as per the revised target The Roads Directorate aims to provide better service delivery and more effective and efficient management of the road network, and is responsible for construction, upgrading, rehabilitation and maintenance of primary, secondary, tertiary and other roads as well as bridges. Additional functions include: implementation of government policy on roadsrelated issues; planning, design and implementation of roads programmes; preparation of strategic road network development plans; and promotion and support of the development of the road construction industry in Lesotho. The Councils and the Ministry of Local Government are entrusted with upgrading and bituminising urban roads and bus terminals, as well as constructing hard gravel roads that link communities within the districts. Government encourages private sector participation in terms of commercial contracting and service provision. Under the Lesotho Road Management System there is a rolling three-year priority investment programme for the core maintainable road network

to eliminate the backlog of deferred periodic maintenance, avoid further deterioration of roads already in a poor condition, and preserve the existing road assets. However, the current capacity of contractors is not adequate to keep up with the maintenance schedule, resulting in a growing maintenance backlog and low absorption of financial resources allocated to maintenance. One of the aims of the World Bank’s new Transport Infrastructure and Connectivity Project (TICP) is to provide further institutional strengthening to the Roads Directorate. This will enable it to improve efficiency in provision and maintenance of road safety while enhancing access and refocusing the management of road infrastructure to accommodate the impacts of climate change. In addition, the functions of the Road Fund will be reviewed to update its responsibilities in line with the changing road network requirements. Road network expansion and maintenance The Government of Lesotho has invested heavily in expanding the network of urban and rural roads, upgrading gravel roads to bitumen standard, building new bridges and repairing and rehabilitating existing roads. According to the latest LRMS Report, the network has grown to approximately 8 638 kilometres, including some 1 817 kilometres of paved roads, 4 358 of gravel roads and 2 463 of earth roads. The main trunk route north, the Main North One (A1), provides access to most of the north. The A1 from Maseru to Botha-Bothe and on to Mokhotlong is tarred, as is the Katse Road, which has opened up much of the northern highlands. The Main North One also connects to improved roads at Caledonspoort and Ficksburg on the South African side of the border. Tarred roads link Maseru to other district headquarters in Lesotho’s lowlands, as well as connecting the capital to Mohale Dam via the A3 along the Maseru to Thaba-Tseka route. The main trunk route to the south, the Main South One (A2), comprises a good tarred road from Maseru to Moyeni (Quthing), Mount Moorosi and on to Mphaki. The road from Semonkong to Matatiele in South Africa is also tarred.

The rehabilitation of 37 kilometres of the NyenyeMapoteng- ‘Makhoroana Road, linking the districts of Berea and Leribe, has been completed with assistance from the World Bank under the ITP. The road forms an important link that connects to the main arterial road network, enhancing access to agricultural areas and the business centres of Mapoteng and ‘Makhoroana, thus contributing greatly to the economic prosperity of these districts and the country as a whole. A sum of M916 million was put towards the construction of roads and bridges through the Ministries of Public Works and Transport and of Local Government and Chieftainship in the 2017/18 budget. In the 2017/18 financial year, construction activities are focusing on 330 kilometres of rural roads, at a cost of M20 million, and 20.3 kilometres of urban roads in Maputsoe and Mohalalitoe. In addition, Government will continue with the construction of footbridges nationwide, as well as the Likalaneng– Thaba-Tseka Road upgrading for which M40 million was allocated. Furthermore an amount of M20 million was budgeted for roads projects related to the new State House.

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Kayhil Freight, as an industry leader will provide you and your business, with a quality service.

Works are ongoing on the Ha Leshoele– Mathokoane–Setene–Ha Bene roads in Leribe District by China GEO Engineering at a cost of M535 million. Covering 40 kilometres, the road forms a loop from the Main North 1 at Ha Leshoele junction near Hlotse, passes through Ha Mositi and Mathokoane villages, and ends at Ha Bene junction, joining the Main North 1 near the village of St Monica’s. M200 million was set aside in the 2017/18 budget for the Leshoele–Mathokoane section of the road. The 140-metre Bethel Bridge being built over the Senqu River in Mohale’s Hoek by Stefanutti Stocks Civil will cost some M137.3 million. A sum of M20 million was committed to the project for the 2017/18 fiscal year. Other projects under the development budget include M2 million for the Oxbow to Mokhotlong Road and a further M12.5 million for the road from Mokhotlong to Sani Pass.

14-16 Lioli Road, Industrial Area, Maseru 100, Lesotho Tel: +266 22 247 300 • Email: hilary@kayhil.co.ls 16 Combrink Road, Alrode, Alberton 1451, South Africa Tel: +27 11 9089699 • Fax: +27 11 8649783 • Email: kevin@kayhil.co.za TRANSPORT INFRASTRUCTURE 49

MOSHOEHOE 1 INTERNATIONAL AIRPORT

Maseru There are compelling reasons why you should consider Maseru Departure Hall at Moshoeshoe 1 International Airport

for your gateway into Southern Africa. Maseru is within reach of major cities in the region, has plenty of room for operational flexibility, some of the lowest airport fees

Departure Lounge

in the industry, and much more. Let us be of service to you.

Control Tower

Please contact: Director of Civil Aviation P.O. Box 629, Maseru, Lesotho Tel: (+266) 2231 2499 Fax: (+266) 2231 0188 Aiport Manager Tel: (+266) 2235 0777 Fax: (+266) 2235 0380

SA Airlink aircraft at Moshoeshoe 1 International Airport

Your gateway to Southern Africa

Department of Civil Aviation

These abovementioned development projects are all financed by the Government of Lesotho. At the same time, the Road Fund is financing the upgrading of existing paved roads (M180 million) and the paving of new roads (M150 million). Footbridges The Roads Directorate constructs and maintains footbridges to facilitate access by rural communities to basic services and markets. While enhancing access to social and health services, footbridges also enhance residents’ safety, minimising the chance of drowning while crossing swollen rivers during the rainy season. Construction of these footbridges in the districts of Qacha’s Nek, Quthing and Mohale’s Hoek, where a lot of travel takes place on bridle paths, tracks and earth roads, has also contributed to the alleviation of poverty caused by rural isolation. A further M10 million was set aside for the construction of footbridges in 2017/18. Transport and traffic The Department of Transport and Traffic is responsible for the efficient operation of road transport, ensuring the availability of public transport and monitoring the participation of the private sector. The Lesotho Road Fund operates on a fee-for-service basis to enable road users to contribute towards road maintenance and construction. The fund’s largest source of revenue has historically been the road maintenance levy, which is included in the price of fuel, followed by tollgate fees and licence fees on motor vehicles. Private taxi and bus transport operators dominate the public transport subsector, and the parastatal Lesotho Freight and Bus Services Corporation is charged with operating on remote roads that are inadequately serviced and where commercial carriers do not exist. Sixteen-seat private minibus taxis provide most public transport in rural areas and cater for commuters in peri-urban areas. Some larger buses cover inter-urban routes and saloon taxis work in and around towns. Operating outside the regulatory framework, 4x4 pickups provide essential public transport on difficult routes inaccessible to minibuses.

The forthcoming Transport Infrastructure and Connectivity Project will focus on establishing the Lesotho Integrated Transport Information System (LITIS); an integrated record management system for revenue collection, driver licensing and vehicle inspection. Road safety initiatives Lesotho faces a number of challenges in road safety, with high fatality rates in densely populated districts and numerous road accidents in the mountain areas. Road safety problems are twofold. In the more densely populated lowlands districts of Maseru and Leribe, where approximately 50 percent of deaths occur, pedestrians are the main victims. In the highlands, where driving conditions on winding roads through mountainous terrain prove challenging, the incidence of road accidents is high. Annual road accident fatalities averaged around 300 between 2009 and 2013, falling to 222 and 228 deaths in 2014 and 2015, respectively. However, this figure rose once more in 2016 to 318, a rate of 15.9 fatalities per 100 000 of the population. This compares with the rate of around five per 100 000 in the safest countries in the world. The Roads Safety Department and soon to be operationalised National Road Safety Council (NRSC) oversee improvements in road transport safety as well as the security of people along road traffic corridors. Lesotho has embraced the Decade of Action for Road Safety (2011-2020), a United Nations initiative aiming to intensify measures to promote the protection of people’s lives on the roads over a ten-year period. The programme highlights expanding the capacity of road safety management to improve the behaviour of road users as well as to enhance post-crash care. The aim is to reduce the number of road deaths by half by 2020. Road Safety Programme activities developed under the now concluded ITP included the establishment of a driver training and examination system, a vehicle inspection system, a road accident database, and traffic surveillance equipment. The NRSC was approved by the Cabinet and a Road Safety Policy was drafted. Chaired by the Principal Secretary in the MoPWT, the NRSC is mandated to coordinate all organisations involved in road safety, in addition

INTRODUCTION: Lesotho Petroleum is a wholly owned Basotho company which has been in existence since 1990. The central hub from where all Lesotho Petroleum’s activities take place is our Head Office and Depot in Maseru where we have a storage capacity of 560 000 litres of fuel and a warehouse of 800 sqm and freezer facility of 144 cubic metres or 72 pallets. DISTRIBUTION AND TRANSPORT • Our transport infrastructure consists of 3 articulated bulk fuel tankers and 2 smaller rigid fuel tankers. • We have 6 articulated flat deck vehicle combinations and 1 rigid and drawbar combination. • We also have 3 smaller rigid trucks. • All vehicles are monitored by satellite tracking. • We have long standing relationships with Engen Petroleum and Puma Energy • We wholesale & distribute Petroleum products throughout Lesotho. • Lesotho Petroluem has long-established trading relations with Itau Milling whose products we distribute throughout the country. • Lesotho Petroleum provides the opportunity to all Basotho to purchase packaged maize, flour and stock feed in small or large quantities, which they can then sell on to their local community, thus empowering local entrepreneurs to make a good living.

to monitoring and evaluating the effectiveness of road safety strategies, approving road safety budgets and formulating road safety policies, actions plans, education and related legislation. The NRSC is presently being operationalised, pending the necessary legal amendments. In this regard the MoPWT submitted an amended Road Traffic Bill to the Parliamentary Council in May 2017. The MoPWT’s medium term objective includes implementation of activities relating to the Road Safety Decade of Action to help reduce the high incidences of road crashes and thereby saving the country millions in terms of human resources and money. The existing road network needs to be monitored and assessed to ensure that improvements are introduced through a structured programme, with collaboration between the Road Directorate, Department of Road Safety and the Department of Traffic and Transport. Road safety audits are critical in identifying potential safety problems with new and existing road projects and designs. Another road safety priority is to properly equip the department to remove snow on the roads during the harsh Lesotho winters.

AIR TRANSPORT Lesotho’s Moshoeshoe I International Airport (MIA) is situated about 20 kilometres outside of Maseru in Mazenod. With a tarred runway measuring 3 200 metres in length, it is suitable for medium-range jet aircraft such as the Boeing 727. Facilities include two passenger terminals, one cargo terminal and four runways. The terminal building has amenities such as a bureau de change, bar and restaurant, left luggage facilities, gift shop and tourism information kiosk. There are also facilities for the disabled. Domestic air transport services utilise a network of 24 airstrips – 12 of which are currently operational – providing secondary and, in some cases, primary access to a number of the country’s most isolated rural areas. The airstrips at Qacha’s Nek and Mokhotlong have tarred runways, while the others have gravel or grass airstrips that are utilised mainly by the Lesotho Flying Doctors Service. SA Airlink offers at least three flights per day between Moshoeshoe I International Airport and OR Tambo (ORT) International Airport in Johannesburg. Flying time to Johannesburg TRANSPORT INFRASTRUCTURE 52

is approximately 55 minutes. From ORT there are connecting flights to a range of international destinations. The Lesotho Defence Force (LDF) Airwing was initially established in 1978 to support the country’s land force. It operates three fixed-wing aircraft and six helicopters out of Mejametalana Airbase, situated north-east of Maseru at an elevation of 5 100 feet above sea level. The airport has undergone a M70.894-million upgrading project in order to attract more fixedwing aircraft from neighbouring countries. This has seen the construction of the main taxiway, which is 1 300 metres long and 30 metres wide and capable of accommodating medium class aircraft with an all-up weight not exceeding 16 500 kilograms, for both day and night flying operations. In October 2017, Lesotho’s Deputy Prime Minister, Monyane Moleleki, commissioned the LDF Airwing’s new H125 helicopter and operationalised the rehabilitated main runway at Mejametalana Airbase. The Airwing occupies a strategic niche in Lesotho’s national security spectrum, ranging from its defensive role capabilities to the provision of operational support in tactical and non-tactical situations. It also provides an important service to Government, NGOs and the public in undertaking socioeconomic and developmental ventures, particularly in the remote mountain areas which are not easily reached by road. Missions include the distribution of books and stationery to schools in the highlands, as well as the transportation of medical staff, construction materials, equipment and supplies to health centres. Humanitarian missions are also carried out, such as food relief operations and emergency rescue services. Airwing aircraft are involved in displays for events such as the Army Day and the King’s Birthday celebrations. In addition, they take part in military exercises with other SADC member states, as well as regional search and rescue training and operations. The 2017 addition of the H125 helicopter – nicknamed ‘Litsebe’ – to the current fleet will enhance the Airwing’s operational capability in

continuing to provide airlift support for various missions, including the delivery of old-age pension payments and election material, not to mention health outreaches. The helicopter will also help address the issue of stock theft, particularly along the Drakensberg range where there are 144 kilometres of passes which serve as entry points for animal theft. Infrastructure development Kicking off in the 2017/18 fiscal year, the US $63.2 million expansion project at Moshoeshoe I International Airport aims to meet existing and forecast demands for passenger and cargo facilities. Furthermore, its completion will allow Lesotho to comply with International Civil Aviation Organisation (ICAO) standards. Funding has been received from several development partners, led by the Kuwait Fund. The project includes the following components: • Increasing the handling capacity of the airport by extension of the runway to accommodate larger aircraft • Construction of a new VIP terminal building • Renovation of the existing terminal building • Installation of navigation aids, such as improved airfield and apron lighting • General improvements to the quality of service at the airport The Kuwait Fund is financing the upgrading of Moshoeshoe I International in an amount of M350 million during the 2017/18 fiscal year, while the contribution from the Lesotho Government amounts to M11 million for that period. Government will also explore the possibility of working with the Mohlakeng Council to turn the airport area into a business district anchoring the aviation service. There have been reports that some global aviation players may be interested in this broader aviation and industrial concept. Other developments have seen Government, with the assistance of BADEA, improve the safety and security of the airport with the installation of navigation aids and the purchase of two new fire trucks. A bank of solar panels, which produce 280 kilowatts of electricity to power the terminal building, was installed at MIA by the Department

of Energy through a grant from the Japanese Government, and went into operation during 2013. Regulation The regulation and promotion of civil aviation, development of infrastructure and licensing of air transport operators is under the jurisdiction of the Department of Civil Aviation. It participates in the activities of a number of international civil aviation organisations and upholds international conventions on aviation, all with the objective of achieving safety, efficiency and regularity of service and creating an environment conducive to the development of regional and international trade and tourism. A bilateral air services agreement between Lesotho and South Africa that was signed in 1990 has been reviewed and renegotiated.

RAILWAYS & FREIGHT HUBS Lesotho has 2.5 kilometres of narrow-gauge railway along the border with South Africa at Maseru West industrial area. This connects the capital city of Maseru via the border bridge on the Mohokare (Caledon) River to South Africa’s Bloemfontein-Bethlehem line. Two freight trains run every day, carrying mainly cement, maize, fuel and freight containers and making up about one third of Lesotho’s international trade in bulk goods. While there has been backing from SADC for the development of a rail link that would run from Maseru to South Africa’s sea ports of Durban and Port Elizabeth, with the Lesotho Government seeking funds to conduct a feasibility study, support from Transnet has not been forthcoming. Maseru Container Terminal The Maseru Container Terminal (MASCON), that was operated by Transnet Freight Rail (TFR) until 2009 and then by South African company InfraDev up to May 2013, is presently managed by the MoPWT. Various studies, consultancies and designs have been undertaken which aim to develop MASCON into a dry port that will be operated by a semi-autonomous government agency. In the interim, the Government of Lesotho has made a number of improvements at MASCON, including the purchase of two reach stackers that are instrumental in the loading and off-loading of containers, the fencing of the perimeter area and the levelling of the platform for the safe storage of containers.

Construction

The construction sector, which presently accounts for 6.4 percent of Lesotho’s GDP at current prices, has played a vital role in the economy through large-scale developments such as the Lesotho Highlands Water Project (LHWP). Vehicle Bridge on the Metolong Dam Wall © Metolong Authority According to the Central Bank of Lesotho (CBL) in its 2016 Annual Report, the building and construction subsector was estimated to have grown significantly by 6.3 percent during the year compared with an increase of 4.5 percent in 2015. As construction work has wound down on the Metolong Dam and Water Supply Project, the main contributors to the observed growth were plant expansion works at Liqhobong Diamond mine as well as the ongoing construction of rural and urban roads. Construction activities are nonetheless expected to dip in 2017, following the completion of the Liqhobong expansion project, before recovering in 2018 to around 9.8 percent as advanced infrastructure development associated with the second phase of the LHWP begins, namely access roads, accommodation facilities, power supply and telecommunications. Furthermore, Government construction activities and other major private projects, including those related to residential property, will continue to boost the subsector, as well the anticipated construction works at the Mothae Mining Project.

THE LOCAL CONSTRUCTION INDUSTRY Lesotho’s National Construction Industry Development Policy is presently being developed

by the Ministry of Public Works and Transport in order to establish an institutional and legal framework for growth in the sector. Despite its weak policy and legislative framework, the construction sector has demonstrated significant potential for world-class performance, considering the nature and scale of works it is able to undertake. Given the appropriate support, it should be able to build sufficient capacity not only to meet domestic demand, but also to compete for, and undertake, work outside Lesotho’s borders. In terms of the Southern African Development Community (SADC) Protocol on Trade in Services, construction services that can be exported include architecture, engineering, and building infrastructure, among others. The construction sector has the potential to contribute significantly to economic development and compete internationally if given the necessary support, according to the Principal Secretary of the Ministry of Trade and Industry, Thebe Mokoatle. The Local Construction Industry Development Study, which was part of Lesotho’s Integrated Transport Project (ITP), aimed to develop a supportive environment in terms of policy and strategy for the establishment of a sustainable local construction industry and body of built

environment professionals. The study recommended the adoption of a National Construction Industry Development Policy, to be supported by a Construction Industry Development Act, Built Environment Professions Act, and recommendations for regulations specific to the procurement of construction works for inclusion in the new Financial Regulations.

connecting more households to basic utilities as well as meeting the needs of local industry. Furthermore, the second phase of the Lesotho Highlands Water Project is expected, like its predecessor, to have many positive spin-offs over and above the dams and water transfer schemes themselves in the form of a hydropower plant, power lines, roads, bridges, housing, clinics and telecommunications systems.

The establishment of two independent bodies would also help to develop the local industry. The mandate of the proposed Lesotho Construction Industry Council (LCIC) comprises setting up a reliable contractor registration system and monitoring the performance of contractors while promoting best practice and seeking international recognition and accreditation for local engineers, architects, technologists and technicians. The Council for Built Environment Professions (CBEP) would be responsible for the registration, training, accreditation and conduct of key built environment professionals, setting standards for best practice, promoting appropriate standards of education and training, accrediting that training, and helping to design suitable courses for Lesotho’s vocational and tertiary education system.

Lesotho Highlands Water Project The Lesotho Highlands Water Project (LHWP) is a multi-phase, bi-national initiative established through a 1986 treaty between Lesotho and South Africa and implemented by the Lesotho Highlands Development Authority (LHDA) and the Trans-Caledon Tunnel Authority (TCTA). In its entirety, it involves the construction of five large dams, implemented over four phases and ultimately transferring 70 cubic metres of water per second to South Africa. The water transfer aspect sees dams and tunnels being built in Lesotho to store, regulate, divert and transfer water from the Senqu (Orange) River and its tributaries to South Africa. This delivery system is utilised to generate hydroelectric power in Lesotho.

WATER & ENERGY PROJECTS The construction of water supply, sanitation and energy infrastructure is prioritised with the goal of

The first phase of the LHWP was the biggest water transfer scheme that had ever been undertaken on the African continent. Completed in 1998, Phase IA encompassed construction of the 185-metrehigh concrete double curvature Katse Dam (the highest in Africa) on the Malibamatso River and CONSTRUCTION 53

associated infrastructure and transfer tunnels from the Katse Reservoir to the ‘Muela Hydropower Station and on to the Ash River in South Africa. Phase IB, which was inaugurated in 2004, consisted of the 145-metre-high concrete-faced rockfill Mohale Dam on the Senqunyane River, a tunnel to the Katse Reservoir, and a diversion weir on the Matsoku River. Launched during 2014 at Tlokoeng in Mokhotlong district where the Polihali Dam is to be built, Phase II of the LHWP (LHWP II) consists of both water transfer components and a proposed pump-storage scheme for electricity generation. In developing Phase II, approximately 5 000 hectares will be flooded by the dam and reservoir in the valleys and tributary catchments of the Senqu and Khubelu rivers. The Lesotho Highlands Water Commission has an oversight function, and represents and advises the two governments as well as monitoring the activities of the LHDA and the TCTA. Water delivery capacity under LHWP II is set to rise from 780 million cubic metres per annum up to 1.27 billion cubic metres per annum. South Africa’s TCTA is responsible for funding the water transfer component – estimated at M22.9 billion on completion – while Lesotho is to fund the hydroelectric component. Together, these projects will provide around 11 000 jobs annually, approximately half of which will be in construction with the rest in indirect activities such as agriculture, transport and services. The challenge will be to transfer skills and leverage income for sustainable employment once major civil works are completed. Water transfer and related infrastructure comprise the following components: • Polihali Dam, a concrete-faced rockfill embankment dam 165 metres high, will be built downstream of the confluence of the Khubelu and Senqu rivers, and have a capacity of 2.322 billion cubic metres, a crest length CONSTRUCTION 54

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of 915 metres, and a full supply level of 2 075 metres above sea level. The dam’s embankment will comprise over 12 million cubic metres of compacted rock, which will be quarried locally within the dam basin. Other associated infrastructure will include a 50-metre-high saddle dam, concrete sidechannel spillway, 70-metre-high Polihali Intake Tower, and a conveyance tunnel 38.2 kilometres long and 5 metres in diameter that will transfer water from the Polihali reservoir to the Katse reservoir. A 60-kilometre west-east access road linking the A8 near Matsoku to the A1 near Tlokoeng. High tension power and fibre optic telecommunications extensions along the abovementioned access road. Ten new bridges, with three being higher than 100 metres and longer than 0.5 kilometres, linked to some 100 kilometres of rural feeder roads. A permanent housing development, which will consist of project offices, and residential and community facilities, will be established near the Polihali Dam and transfer tunnel.

Work associated with the water transfer tunnel includes the intake works and gate shaft at the Polihali reservoir, the transfer tunnel itself, ventilation and dewatering shafts, outlet works and a gate shaft at the existing Katse reservoir. The contractors will tunnel through basalt rock, meaning that excavation will most likely be done using both the drill-and-blast method and a tunnelboring machine, and the tunnels will be fully concrete-lined. Hydraulic control will be effected by the valves in the intake structures. The Polihali intake gate shaft will be used only for maintenance and water quality control functions. During the construction of Phase II, significant additional works contracts will be awarded for the construction of all-weather access roads, a bulk power supply network, telecommunications systems and project housing as well as labour camps.

In July 2017 the LHDA awarded the contract on the design and construction supervision of the Polihali Dam to Matla a Metsi Joint Venture, comprising South African companies GIBB (Pty) Ltd and Mott MacDonald Africa (Pty) Ltd, French company Tractebel Engineering SA/Coyne et Bllier, and Basotho-owned LYMA Consulting Engineers. This is the largest award on Phase II consultancy and amounts to a sum of M445 million. It is anticipated that design work for the construction of the Polihali Dam will take 18 months, while the actual construction of the dam should kick-off towards the end of 2019 or the beginning of 2020. Collection of water into the dam is expected to start in 2023 and transfer of water to South Africa should commence towards the end of 2025. The majority of the advance infrastructure components need to be completed before the construction of the main Phase II works (the Polihali dam and transfer tunnel) can begin. To date, several consultancy contracts have already been awarded for various elements of the advance infrastructure works, including access roads, bridges, construction villages/camps, geotechnical studies, bulk power and telecommunications, environmental and social impact assessments and resettlement action plans. Furthermore, 20 advance infrastructure construction contracts across a variety of disciplines – including roads, bridges, housing, power and water supply, and waste management, with values ranging from M1 million to over M1 billion each – began to go out to tender from the last quarter of 2017. Water and sewerage Lesotho’s Water and Sewerage Company (WASCO), overseen by the Lesotho Electricity and Water Authority (LEWA), is in charge of construction projects related to domestic and commercial water supply and sewerage systems in urban centres. Achievements for 2016/17 include the installation of 5 413 urban water supply connections serving 21 652 people, and 76 rural water supply project systems serving 32 560 people. In addition, 359 urban sewer connections have been completed,

serving 1 436 people, and 7 076 rural VIP systems supplying 7 076 households. The recently completed Metolong Dam is 83 metres high with a crest width of 270 metres and a reservoir of 63.7 million cubic metres. The water treatment works have a capacity of 75 000 cubic metres per day on average (peaking at 93 400 cubic metres). The downstream conveyance system comprises transmission pipelines, storage reservoirs and associated pumping stations. Pipelines include a 34.3-kilometre line to Maseru; 33.0-kilometre line to Roma and Mazenod; 30.5-kilometre line to Morija; and a 25.0-kilometre line to Teyateyaneng. The feasibility study for the Greater Maseru Water Supply Project has been completed and is presently awaiting financing for detailed design and construction supervision. The project covers the water distribution network and associated infrastructure in the villages of Mazenod, Ha Luka, Ha ‘Masana, Ha Tsiame, Ha Makhoathi, Ha Lenono, Ha Bosofo, Ha ‘Nelese, Ha Foso, Marabeng, Berea and Maqhaka. Drawing on EU funding, the Maseru Waste Water Project is helping to improve the treatment and disposal of wastewater for around 100 000 residents in the urban and peri-urban areas of Maseru through connections to sewer networks as well building low-cost on-site sanitation services. It involves transporting reticulated sewage from villages such as Masowe I, II and IV, Thetsane, Khubetsoana, Mabote, Naleli, Makoanyane, NHTC and the filter clinics of Mabote Qoaling and Likotsi. Current works under the project include the construction of sewer mains and a pumping station in Khubetsoana (Lot 1) and construction of sewer networks in Thetsane East and Masowe IV (Lot 2), due for completion by December 2018. Furthermore, baseline assessment and construction is underway to provide on-site sanitation facilities in urban Maseru, and is set to conclude in September 2018. The Five Towns Water Supply Project encompasses provision of water in the five districts of Botha-

MGC Park, Corner Pope John Paul II and Mpilo Boulevard P.O Box 4474, Sebaboleng 104, Maseru Tel: +266 52216200 / +266 22216200 Email: info@mgc.co.ls | Website: www.mgc.co.ls

THE AQUARELLE APARTMENTS As part of the expansion of the group. MGC, through its South African subsidiary, MGC Properties has seen through this magnificent project that is along the beach in the coastal city of Port Elizabeth. It was only natural for the group to want an expansion in South Africa and not only be confined within the beautiful kingdom. With this rapid evolution and technological developments, MGC has also evolved and grown into a multi-facet and international empire. It is through a solid vision and a committed team that we are able to exceed expectation always. Taking into consideration the climate changes, the infrastructural developments and architectural innovation, we are compelled to follow suite and overtake the creativity and expectations of our clients. The Aquarelle is a development that started in 2015 to answer the need for apartments in the coastal area of Port Elizabeth. With 9 floors, the top being two penthouses that are exclusive and custom made for the client, the apartment also has ample parking space. The view over the sea adds a beautiful ambiance with the all-glass surrounding that gives an outdoor feel to the apartment. A walk to the beach will take you just two minutes, then! Your dream has been realized! The Aquarelle is an addition to the Mpilo Estates, MGC office park and Mpilo Boutique hotel among others. Website: www.mgc.co.ls

MANTSONYANE SCHOOL PROJECT Corporate Social Investment In 2005, The Founder of MGC Mr Sam Matekane went back to his origin and built the community of Mantsonyane a church. A few years later he realized the need to expand on this vision and give back a bit more to the community that raised him. In 2014, through the MGC CSI projects, MGC started actualizing Mr Matekane’s dream by constructing this beautiful institution that has not been seen before in the Mantsonyane community and the surrounding the villages. The projects comprises of a high school, primary, a conference center, nunnery and a priest house. Teacher’s quarters and a fully equipped sports center with a stadium are under construction and will be completed by January 2018. This project is meant to be an enhancement to the Bocheletsane schools. The original buildings are still intact and will be used for other means of generating income for the upkeep of the school. The new school comes with improvements such as a science and computer laboratories. This will impact positively on the improvement of the pupil’s education. The comfort of the furniture and new structure will help improve the pupil’s morale and keep them warmer in winter. MGC believes in investing in the future generation, therefore educating our young ones will be beneficial to the growth of the country. Through this project and other projects under our CSI/CSR endeavors, we are committed to changing the lives of the children for a better tomorrow. MGC also runs a sponsorship program under which children are sponsored with needs ranging from fees, uniforms, books and other necessities. Through this program we have been able to assist a number of kids realize their dream. This program has now been running for the past 6 years. MGC hopes the status of education in Mantsonyane will improve tremendously and give its people a fair chance in competing with other schools especially in the urban areas. The project handover will be in 2018.

Bothe, Hlotse, Mafeteng, Mohale’s Hoek and Qacha’s Nek. It entails construction of river intake works, water treatment works, pumping stations, transmission mains, distribution mains, and reservoirs in all the five towns.

Pump Storage Scheme, which would comprise the existing Katse Reservoir and a new upper reservoir in the Kobong valley, allowing for the export of 1 000 megawatts of peak power while leaving 200 megawatts available for domestic use.

The Lowlands Rural Water Supply and Sanitation Project, which has been implemented as part of the Metolong Dam initiative, provides basic rural water and sanitation infrastructure as well as environmental health support to the districts of Berea and Maseru. Benefitting some 65 000 inhabitants with access to safe and reliable water, and 7 800 households with access to improved sanitation facilities, the focus is those communities located in the vicinity of the project’s primary and secondary water supply pipelines.

The optimal installed capacity as well as the operation mode of the power station still need to be determined as part of the generation system in the Southern African Power Pool. The scheme would need energy to pump water to the reservoir during off-peak hours to ensure availability during peak hours. Further, it would require significant strengthening of the existing transmission lines between the two countries.

Projects being undertaken during the 2017/18 fiscal year include Tsikoane Water Supply and Sanitation Scheme and Katse-Matsoku-Lejone Water Supply and Sanitation project. The High North/Sehlabeng/ Foso Water Project entails transfer of potable water from the High North Reservoir at Sehlabeng to the villages of Ha Foso and Marabeng in Berea. Other current projects include the reconstruction of Maputsoe Sewer Line to connect three firms; rehabilitation of Qacha’s Nek intake works; and water network extensions at Lekhobanyane, Mpesi, Ha Jimisi, Foso, Marabeng and Thaba-Tseka. In addition, the replacement of asbestos pipes with high density polyethylene (HDPE) pipes is ongoing at Mohale’s Hoek, Maseru East, Qoaling and Mafeteng, and Sekantsing pipeline in Quthing is being rehabilitated through the replacement of uPVC pipes with galvanised iron pipes. Electrification and power generation projects The hydropower component of Phase II of the LHWP is still to be agreed upon by the governments of South Africa and Lesotho. Following ongoing feasibility studies, a report on bankable hydropower options is expected in the first quarter of 2018. This may include either a pumped storage scheme, conventional hydropower such as the expansion of ‘Muela Hydropwer infrastructure, or new greenfield sites. To date, the preferred option has been the 1 200-megawatt Kobong CONSTRUCTION 56

A M151.76 million loan from the African Development Bank (AfDB) is helping to fund the Urban Distribution Rehabilitation and Transmission Expansion Project, which aims to rehabilitate and refurbish electricity power distribution networks across the country. The project encompasses the rehabilitation of 188 kilometres of distribution lines and switching stations, expansion of the transmission network through the upgrading of a substation, and construction of 8 kilometres of transmission lines, and is expected to create 140 jobs during construction. The Rural Electrification Project kicked-off in October 2017 for the three villages of Ha Sofonea, Ha Majara and Ha Tonki in Maseru’s Thaba-Bosiu constituency. The project will cost in excess of M6 million and benefit 545 households in these villages. This is the initial phase of a project which will be rolled out to rural villages across the country. Major works recently completed by the Lesotho Electricity Company (LEC) include connecting the second 132kV line between Mabote and Mazenod substations and adding the third 40MVA transformer at Mazenod substation. LEC has also upgraded two 33/11kV Maputsoe transformers from 10MVA to 20MVA each in order to address gradual load growth around Maputsoe Industries and the surrounding villages. Furthermore, a 33kV line has been built between Metolong to St Agnes, while the Litšoeneng substation in Mohale’s Hoek

is being re-commissioned and a feasibility study for the 132kV line from Mazenod to Qacha’s Nek via Semonkong has been completed.

TRANSPORT INFRASTRUCTURE A department under the Ministry of Public Works and Transport, Lesotho’s Roads Directorate was formed by the amalgamation and restructuring of the former Roads Branch and Department of Rural Roads, and established under the Roads Directorate Act of 2010. It is responsible for planning, designing and implementing the construction, upgrading, rehabilitation and maintenance of primary, secondary, tertiary and other roads and bridges throughout Lesotho, as well as supporting the development of the road construction industry. The role of transport infrastructure in improving a country’s competitiveness cannot be overemphasised. In recent years, Lesotho’s central and local governments have made considerable investments in improving the quality of roads to bitumen or hard gravel standards and expanding the network of urban and rural roads. The introduction of the Lesotho Road Management System (LRMS), which enables the collection and systematic monitoring of data on national roads, will facilitate timely maintenance interventions before roads start to deteriorate. Temporary employment was provided to 14 839 unskilled labourers during construction, rehabilitation and maintenance of roads, government buildings, bridges and airstrips during the 2016/17 fiscal year. The 2017/18 budget proposed a sum of M916 million for the construction of roads and bridges through the ministries of Public Works and Transport and of Local Government and Chieftainship. This comprises 330 kilometres of rural roads and 20.3 kilometres of urban roads in Maputsoe and Mohalalitoe. In addition, the construction of footbridges continues across Lesotho, and the Leshoele–Mathokoane road

and the Likalaneng–Thaba-Tseka road are being upgraded. Reconstruction and rehabilitation of 37 kilometres of the Nyenye-Mapoteng-Makhoroana road by EXR Construction has recently been completed. There are also a number of ongoing projects, including: • Upgrading to bitumen standard of 40 kilometres of the Leshoele-MathokoaneSetene-Bene road by China GEO • Upgrading from gravel to bitumen of 10 kilometres of the Alywal’s Kop-Tele road by Matekane Construction • Reconstruction of 70 kilometres of the Oxbow-Mapholaneng road by CMC Di Ravenna • Construction of the new Bethel Bridge by Stefanutti Stocks The rehabilitation of Moshoeshoe I International Airport was scheduled to begin in the 2017/18 fiscal year. Work being undertaken includes extending the existing runway and the construction of a new VIP terminal building and renovation of the existing terminal buildings, and the installation of navigation aids and apron lighting. The objective is to increase the handling capacity of the airport to meet existing and forecast demands for passenger and cargo facilities. Government has received funding totalling US $63.2 million from several development partners, led by the Kuwait Fund. The budget for 2017/18 amounted to M350 million (Kuwait Fund) and M11 million from the Lesotho Government. The rehabilitated main runway at Mejametalana Airbase was commissioned in 2017. The runway, which measures 1 300 metres long and 30 metres wide, was built by EXR Construction (Pty) Ltd.

HOUSING & PROPERTY A significant proportion of housing is ownerconstructed and owner-financed, with around 23 percent of households living in dwellings they have built themselves and 19.7 percent having inherited

industrial area, 80 kilometres north of Maseru, and a 7-hectare site in Berea.

their home. In towns and villages, and to some extent also in rural areas, owners typically collect materials over time and eventually build their own homes.

Phase II of Tikoe Industrial Infrastructure was completed in 2016/17 and saw the development of 27 hectares of land into a fully-serviced estate with roads, water, electricity and 11 factory shells with sizes ranging from 2 000 to 4 000 square metres. The project was financed by Government and its development partners, the Arab Bank for Economic Development in Africa (BADEA) and the OPEC Fund for International Development (OFID), in an amount of US $28.4 million.

According to the draft National Housing Strategy, formal housing supply in Lesotho falls short of demand. It is estimated that an additional 5 200 houses (or some 9 000 rooms) will be needed every year to meet the urban housing demand, amounting to an estimated 60 000 houses by 2025. Housing finance is channelled mainly through mortgages, and the criteria used to qualify for a loan poses a challenge to most citizens, particularly those without formal employment. Residential property development A state-owned developer, the Lesotho Housing and Land Development Corporation (LHLDC) was established following the merger of the Lower Income Housing Company and Lesotho Housing Corporation in 1988. The mission of the LHLDC is to assist in meeting the shelter needs of all Basotho by providing a variety of housing sites as well as home ownership and rental accommodation options to cater for a wide spectrum of income levels in the most cost effective manner available. The corporation finances and engages construction companies to build and maintain the housing stock as well as having an in-house capacity for construction. Although the LHLDC has improved on its delivery record in recent years, addressing the needs of low income groups remains a challenge. For this category, the primary approach involves building ‘malaene’ – comprising rows of single or double interconnecting rooms for rental accommodation. In addition to its other duties, the Ministry of Local Government and Chieftainship is tasked with facilitating the delivery of affordable quality houses to Basotho within properly planned settlements. The Ministry has helped to develop the Lesotho Housing Profile (LHP), which was launched in 2016 and is supported by the United Nations Development Programme and UN-Habitat in Lesotho. The aim of the LHP is to develop a holistic interpretation of the factors influencing

Newly constructed Pension Fund House in Constitution Road © Pension Fund housing provision in the country, including areas such as housing finance, land and construction, and institutional, regulatory and cultural issues. Furthermore, the development of the LHP has been instrumental in the creation of the draft National Housing Policy (2016-2020). The Maseru Municipal Council (MMC) is responsible for planning and allocating land within the designated city boundaries and developing plots for residential housing. The 2017 Africa Housing Finance Yearbook, produced by the Centre for Affordable Housing Finance in Africa, reports that in the past two years the LHLDC built 20 three-bedroom houses in the Katlehong area and developed 996 plots in Masowe (Maseru South West) III. The Masowe IV housing project comprises 448 residential plots. The LHLDC is also responsible for the Linakotseng housing project, which was initially overseen by the Ministry of Local Government and Chieftainship as a low income housing project. Private housing developers produce housing stock mainly for middle to high income groups. The Matekane Group of Companies (MGC) is involved in property development and to date has built 20

three-bedroom luxury houses at Mpilo Estate. Another private company engaged in developing housing estates is Sigma Construction and Property Development, which has developed low, middle and high income residential houses (both detached and attached) in Mabote, Masowe II and III, and Khubetsoana. Green City Property Developers plan to build close to 800 gated housing units over a five-year period in Pena-Pena at Ha Abia just outside Maseru for the middle to high income group. Habitat Lesotho works in partnership with vulnerable groups to build donor-subsidised houses between one and three rooms in size. Industrial and commercial property The Lesotho National Development Corporation (LNDC) constructs factory shells and provides services (roads, water and electricity) as an incentive to investors. Development of the 80-hectare Tikoe Industrial Estate has seen new factory spaces becoming available for occupation in line with improvements in output by the manufacturing subsector. A sum of M50.0 million was allocated in the 2017/18 budget for Tikoe Industrial Infrastructure Phase III and an additional M50 million for developing infrastructure at the 121-hectare Special Economic Zone development in Ha Belo, Botha-Bothe. Other sites that have been identified by the LNDC for industrial development include the 31-hectare Nyenye

Further opportunities exist in the development of the commercial property: three prime sites totalling 18 150 square metres in Maseru City Centre; 5 700 square metres in Mafeteng; and 140 hectares near the northern border crossing of Caledonspoort, where there is an opportunity to develop an eco-lodge with conference facilities and outdoor entertainment. Social infrastructure Construction programmes under the Millennium Challenge Corporation (MCC) have focused on building and renovating clinics and bringing health facilities closer to rural areas. Government is presently considering building a Cancer Treatment Centre, as the cost of cancer referrals to neighbouring South Africa for radiotherapy is skyrocketing. An increasing number of public sector projects are undertaken with input from the private sector. Local contractors are used where feasible in an effort to boost citizen economic empowerment. One such example is the Queen ‘Mamohato Memorial Hospital, which was built in Maseru at a cost of around M1 billion in a PublicPrivate Partnership (PPP) agreement between the Government of Lesotho and Netcare. In the area of education, work is ongoing to rehabilitate classrooms and construct new science laboratories, with M15 million set aside for the construction of Secondary Schools in the 2017/18 national budget. CONSTRUCTION 57

Water & Energy

Steady progress has been seen in the electricity and water sectors, and future growth should be boosted by the second phase of the Lesotho Highlands Water Project and its associated hydropower benefits, as well as the development of a utility-scale solar photovoltaic project. The Polihali Dam site © LHDA

WATER The Lesotho highlands are one of the region’s principal water catchment areas, and the source of three major river systems – the Senqu, Mohokare (Caledon) and Makhaleng. These abundant water resources, when combined with Lesotho’s high altitude and geographic proximity to major demand centres in southern Africa, have proven to be a valuable natural asset that is both renewable and sustainable. Rainfall together with winter snowfalls provides an estimated 5.5 billion cubic metres of water annually and renewable groundwater resources of some 340 million cubic metres per year. The landmark Lesotho Highlands Water Project (LHWP) enables the transfer of water from the highlands of Lesotho to the economic powerhouse of the African continent in Gauteng, South Africa, while also contributing to the development of hydropower resources. Royalties earned from the export of water have become the largest single source of non-tax revenue in the country, and the start of the LHWP Phase II has reinforced the vital role of this precious commodity in Lesotho’s economy. While Lesotho’s water resources exceed national WATER & ENERGY 58

requirements, limited access to these resources has been an obstacle to growth and development as well as efforts to stem waterborne diseases. This is especially pertinent for the capital city of Maseru and its surrounding areas, which are the site of the majority of textiles and light manufacturing firms. Lesotho has made substantial progress in the past decade on improving water supply and sanitation facilities. According to the latest available data, 50.9 percent of Basotho households have access to improved sanitation facilities, while 77 percent of rural residents and 95 percent of urban residents have access to an improved water source. The construction of water supply and sanitation facilities is ongoing in both urban and rural areas during 2017/18, and includes projects such as Tsikoane Water Supply and Sanitation Scheme, Metolong Dam and Water Supply Programme and Katse-Matsoku-Lejone Water Supply and Sanitation Project. While the Metolong Dam has greatly enhanced domestic water supply, detailed design of the remaining modules of the project are being undertaken to ensure that water is supplied to additional locations. This includes a feasibility study of future multipurpose dams.

The Ministry of Water is presently working to complete the review of the Water and Sanitation Policy of 2007 and Water Act of 2008. The Ministry also continues to prioritise integrated catchment (wetland) management to ensure sustainability of water resources and reduction of soil erosion, and is preparing the Integrated Catchment Management Plan. Improving the country’s national water resources infrastructure and increasing water security in an environment that is climate-insecure, is central to boosting the Government’s efforts to promote long-term sustainable macroeconomic development, including food security and job creation. The 2016 World Bank report ‘Lesotho Water Security and Climate Change Assessment’ evaluates the vulnerabilities, challenges and opportunities in the country’s water management system. Simulations show that continued development of existing water infrastructure is critical to improving the reliability and resilience of the domestic and industrial sectors. Exploring interconnections between water resources developed through the LHWP and linking these to address domestic

and industrial demands in the lowlands could help improve the resilience of the existing system. Furthermore, the implementation of additional phases of the LHWP will increase transfer capacity as well as acting as a major job creator in the construction sector. In March 2017, the Global Environment Facility (GEF) approved the release of US $4 million to complement US $17 million from the African Development Bank (AfDB) to fund Lesotho’s water supply and sanitation projects. The funding, which was mobilised under the Least Developed Countries Fund (LDCF) of the GEF, is expected to address constraints in Lesotho’s water and sanitation sector related to increasing populations in the periurban areas; economic growth and higher demand; geographical isolation; lack of public utilities and regulation; high cost of water provision; and the water stress caused by increasing climate change and variability. Water management The management of Lesotho’s water systems falls under the Ministry of Water, which was created in 2015. The Department of Water Affairs (DWA) keeps and provides records, information, results

The Lesotho Highlands Water Project (LHWP) was established by the Treaty between the Governments of the Kingdom of Lesotho and the Republic of South Africa on the 24th October, 1986. The Treaty specifies the purpose of the LHWP as to “enhance the use of the water of the Senqu/Orange River by storing, regulating, diverting and controlling the flow and its affluents in order to effect the delivery of specified quantities of water to the Republic of South Africa and by utilizing such delivery system to generate hydro-electric power in the Kingdom of Lesotho”. The LHWP was designed to be implemented in four phases and on completion, transfer 70 cubic meters of water per second to South Africa. The LHWP has been quoted as an African success story. It ranks among the most successful cross-border water collaboration schemes between two sovereign states. It contributes significantly to the promotion of sustainable economic growth, reduction of poverty and improvement in the livelihoods of the people of the two countries. The institutional arrangements for the implementation of the LHWP were established by the Treaty and subsequently domesticated by national legislation in the two countries. The Government of Lesotho established the Lesotho Highlands Development Authority (LHDA), an organization responsible for the implementation of the LHWP in the territory of Lesotho. The Government of South Africa established the Trans-Caledon Tunnel Authority (TCTA), an organisation responsible for the implementation of the LHWP in the territory of South Africa. The Joint Permanent Technical Commission, which was later re-named the Lesotho Highlands Water Commission (LHWC) was established and gazetted in both countries as a bi-national body.

The LHWC was established to provide a joint oversight of the implementation of the LHWC on behalf of the two Governments. The LHWC is responsible and accountable to the two governments for the overall implementation of the LHWC and is the only channel of the Governments’ inputs into the LHWP. The LHWC has monitoring, advisory and approval powers in respect of the activities of the LHDA relating to the LHWP in Lesotho and activities of the TCTA relating to the operations and maintenance of features of the LHWP in South Africa. The two Governments are equally represented in the LHWC. Each Government appoints three delegates and three alternate delegates as its representatives. Each Delegation is led by a Chief Delegate and advises their respective Governments on matters pertaining to the planning, implementation and operations of the LHWP. The LHWC is serviced by the Secretariat.

PROJECT GOVERNANCE

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LESOTHO HIGHLANDS WATER COMMISSION

Significant achievements have been recorded during the past thirty-one years of implementation of Phase I of the Project. These include the construction of the 185m high Katse Dam, the 145m high Mohale Dam with their interconnecting tunnels for the transfer of water to South Africa, and the 72MW ‘Muela Hydropower Station which generates hydropower electricity for the supply of Lesotho’s needs. Apart from the engineering component, several infrastructural developments and ongoing social and environmental programmes ensue from the LHWP. Mitigation measures have been established to protect the environment and contain the adverse impacts on the communities affected by the

construction of the project. Livelihood enhancement programmes have been established to assist the affected communities in achieving sustainable livelihoods. Throughout the years, the LHWP has won several prestigious awards from leading associations in the areas of project management, engineering, hydropower generation and management, construction, as well as environmental planning and management. Currently the LHWP is embarking on the implementation of Phase II which was inaugurated on the 24th March 2014 by the King of Lesotho, His Majesty King Letsie III, and the President of South Africa, His Excellency President Jacob Zuma. This phase entails the construction of a 163.5m high Concrete Faced Rockfill Dam in the Mokhotlong District. Other associated infrastructure will include a 49.5m high saddle embankment dam, a 70m high Polihali Intake Tower and a 38km long conveyance tunnel connecting Polihali Reservoir with the Katse Reservoir. The dam will increase the total amount of water transferred to South Africa from 780 million cubic metres to 1,270 million cubic metres per annum. Furthermore, Phase II will simultaneously increase the amount of electricity generated for Lesotho. The exact form of the hydropower component is still to be agreed by the governments of South Africa and Lesotho. The decision will be informed by on-going further feasibility studies. During the first quarter of 2018, the consultant undertaking these studies will submit a report which will recommend the bankable hydropower options for Phase II that can be implemented immediately on completion of these further studies. The main expected benefit of Phase II is that South Africa will be assured of a reliable and cost effective water supply that will meet the demands of the Gauteng region well into the future, while Lesotho will benefit from an increased capacity to generate electricity to meet Lesotho’s requirements and also increased royalty revenue.

5th Floor, Standard Lesotho Bank Tower Kingsway, Private Bag A 156, Maseru 100, Lesotho Tel: +266-52214000, Fax: +266-223240211 e-mail: sec@lhwc.org.ls, website: www.lhwp.org.ls

The Lesotho Highlands Water Project Phase II of the Lesotho Highlands Water Project Having successfully implemented Phase I of the Project, the LHDA is now in the early stages of implementing Phase II of this multiphased Project. Just like the first phase, Phase II of the LHWP includes two engineering components, namely, the Water Transfer and Hydropower components. As in Phase I of the project, social and environmental programmes are integral to the project as they ensure that the Project is implemented in line with best practice. Phase II will increase the current water supply rate from 780 million cubic metres per annum to more than 1,270 million cubic metres per annum. At the same time, Phase II will increase the quantity of electricity generated in Lesotho and is a further step in

the process of securing an independent electricity supply to meet Lesothoâ&#x20AC;&#x2122;s domestic requirements.

The construction of the dam is expected to commence in December 2019 or January 2020. The water delivery to South Africa is expected to commence in 2025.

The Polihali Dam will be constructed downstream of the confluence of the Senqu and Khubelu rivers. This will be similar to the Mohale Dam. In terms of height, the Polihali Dam at 163.5m high sits between the Mohale and the Katse Dams. However, in terms of volume of water that will be stored, the Polihali Dam is slightly larger than the Katse Dam. Containing more than 2,300 million cubic meters of water, the Polihali Dam will be about 19% larger than the Katse Dam at full supply.

Progress Update

The design of the dam which is currently underway will take approximately eighteen months and will be followed by the procurement of the construction contractors.

Preparatory work This planning and preparation includes developing policies and procedures that will steer the projectâ&#x20AC;&#x2122;s implementation and the procurement of consultants to design the various elements of the Project. These elements include the advance infrastructure works such as access roads, bridges, construction villages/camps, geotechnical studies, bulk power and telecommunications, Environmental and Social Impact Assessments and Resettlement Action Plans.

The Polihali Dam site

Sourcing contractors and consultants Phase II of the Lesotho Highlands Water Project is currently sourcing contractors and consultants for its implementation. Over the last three years commencing in 2015, the main focus has been on the procurement of consultants. The consultants not only design the engineering works or social and environmental studies but they will also be responsible for supervising the work of the subsequently appointed contractors. This is intended to ensure that the resultant works or programmes will be of a high standard. The consultancy contracts so far awarded cover, amongst others, the design and supervision of construction of access roads, diversion tunnels, project housing, bulk power and telecommunications. They also include environmental and social impact assessments, the development of a framework for the regulation and management of safety, health and environmental issues, the contract for further feasibility studies on Phase II hydropower, the contract to construct and install beacons to mark the perimeter of the Polihali reservoir and a contract to carry out geotechnical investigations where the Polihali Dam wall will be constructed and along the route of the tunnel that will transfer the water from the Polihali Dam into the Katse Dam.. Livelihood Restoration and Social Development Livelihood restoration initiatives will be undertaken so that individuals and communities can continue with income-earning activities after the withdrawal of Project inputs and support. The livelihood restoration

initiatives, which will consider all members of an affected household, and not only the household head, will entail land-based, wage-based and enterprise-based livelihoods. A consultant has been appointed to consult with the affected communities and households on possible livelihood restoration options. The options that will be considered viable will be subjected to further detailed feasibility studies and planning for implementation. In addition, a social development programme will be planned and implemented with local communities and their authorities in order to promote and support broad-based socio-economic development in the Project area. In parallel with the comprehensive livelihood development framework, the LHDA is implementing some pilot projects. Members of communities are being invited to the set up incubation/development centres where these pilot projects are being implemented to allow them to gain practical experience and make informed choices. This process was preceded by the livelihood restoration awareness programme that is largely intended to create awareness and inform the communities around the LHWP Il about the skills and knowledge required in productive sectors such as viable agriculture practices, post-harvest management and other related vocational skills. Procurement opportunities and preferences Phase II will not only contribute to economic growth of Lesotho and South Africa but at the micro economic level, this Phase provides

enormous business and developmental opportunities. The two governments have approved a mechanism for enabling Lesotho and South African companies and individuals to maximise benefits arising out of the Project. As an example, regarding procurement opportunities, Article 10 of the Phase II Agreement states that preference shall be given to suppliers of goods and services including consultants and contractors in Lesotho, South Africa, SADC member states and then internationally, in that order. It is important to note that this is conditional to such procurement being made on a competitive basis, taking into account the quality of the goods and services being supplied, their cost effectiveness and ensuring that the procurement process itself is transparent. The Article further stipulates that the consultants and contractors registered in Lesotho and in South Africa shall share the value of all infrastructure works on an equal monetary basis, taking into account, amongst other things, their shareholding and operational experience. Professional development - Skills development and technology transfer Consultants and contractors working on the project are required to contribute to the development of skills of their employed staff and also assist in the development of small enterprises. This includes provision of opportunities for young professionals who will be mentored and trained, the objective being that these young professionals are afforded an opportunity to gain experience that will prepare them for career opportunities in different disciplines.

LESOTHO HIGHLANDS DEVELOPMENT AUTHORITY (LHDA) For more Information: LHDA Public Relations Office 3rd Floor, LHDA Tower Building, Kingsway. Maseru100. Lesotho Tel: +266 22246000 Fax: +266 22310665 E-mail: lhwp@lhda.org.ls. Website: www.lhda.org.ls

The Katse Dam

Mohale dam spilling

Polihali Weir

of monitoring activities research and analyses to the offices of the Commissioner of Water (CoW), who acts as the custodian of raw water resources. The Department of Rural Water Supply (DRWS) provides small settlements with water, while the operation and maintenance of these schemes is the responsibility of local authorities and committees.

The main objective of the Tsikoane Water Supply and Sanitation Project is to improve the health and living conditions of communities in the Tsikoane area through the development of sustainable water supply and sanitation services. Being implemented by WASCO with a price tag of M8 million, the water supply system is designed to serve a projected population of over 18 000 by 2035. The project includes, among others, construction of a reinforced concrete bulk reservoir as well as collection tanks, pumping and gravity mains, a reticulation system, pump house and operation buildings, and 2 500 Ventilated Improved Pit (VIP) latrines.

Provision of potable bulk water supply to urban areas is undertaken by the Water and Sewerage Company (WASCO) under the licence issued by the Lesotho Electricity and Water Authority (LEWA). The regulator oversees services provided by WASCO, which operates several river intake works, water treatment and wastewater treatment plants, and their associated bulk water transfer systems into bulk water storage tanks. The Lesotho Highlands Development Authority (LHDA) operates and maintains the Lesotho Highlands Water Scheme dams (Katse and Mohale), raw water transfer system and the ‘Muela hydropower scheme within Lesotho, while its counterpart, the Trans-Caledon Tunnel Authority (TCTA), is responsible for the South African side. The Lesotho Highlands Water Commission (LHWC) was established to provide a joint oversight of the implementation of the LHWP on behalf of the two governments. It has monitoring, advisory and approval powers in respect of the activities of the LHDA relating to the LHWP in Lesotho and activities of the TCTA relating to the operations and maintenance of the project in South Africa. Supplying the lowlands The Metolong Dam and Water Supply Programme (MDWSP), which forms the first phase of the Lesotho Lowlands Water Supply Scheme, has made an average of 75 000 cubic metres of treated water per day available to the centres of Mazenod, Roma, Morija, Teyateyaneng and Maseru, where it will meet domestic and industrial requirements for approximately 40 years. It was given priority within the overall scheme as WATER & ENERGY 62

Award winning pedestrian bridge at Metolong Dam © Metolong Authority it serves the greatest number of end users, and the communities and industries that it supplies had the most urgent need of upgraded water supply systems. The MDWSP includes water treatment works and a downstream conveyance system, with a water reticulation component that is operated by WASCO and a wastewater project that deals with liquid waste from industry. Apart from guaranteeing a reliable water supply to thousands of people in the Metolong catchment area, the programme will leave long-lasting benefits for the communities along the pipeline route who have been directly affected by the construction, with a total of 40 villages in the catchment area being supplied with water and sanitation services. Tertiary pipelines constructed as part of the MDWSP include branches and take-offs at specific points along the pipeline routes to facilitate future distribution of potable water to the surrounding communities. This infrastructure is being linked to components of the Rural Water Supply and Sanitation Project in the districts of Berea and Maseru, benefitting some 65 000 inhabitants of the area.

The Lesotho Water Sector Improvement Project Phase II is being implemented by the Lesotho Lowlands Water Supply Scheme Unit. It encompasses development of the next leastcost, longer-term solution to supply water to the lowlands (Maseru, Roma, Morija, Mazenod, Teyateyaneng) along with distribution network expansion, continued reforms within the sector, and scaling up of community water supply systems within an environmentally sustainable, socially responsible and economically viable framework. World Bank funding will go towards the Teyateyaneng extension of the conveyance system, the MDWSP environmental and social management programme, and continued institutional and policy support to the water sector.

The programme, ‘Climate Change Adaptation for Sustainable Rural Water Supply in the Lowlands’ will be financed by GEF for an indicative amount of US $4.4 million and co-financed by the AfDB to the tune of US $17 million.

Funded by the Government of Lesotho, BADEA, OFID and the Saudi Fund, the Five Towns Water Supply Project involves water supply improvement in the five towns of Botha-Bothe, Hlotse, Mafeteng, Mohale’s Hoek, and Qacha’s Nek. The improvement entails construction of river intake works, water treatment works, pumping stations, transmission mains, distribution mains and reservoirs. The Three Towns Water and Sanitation Project is being implemented by WASCO with a budget of M15.25 million. Urban and peri-urban water supply Rapid urbanisation in the capital has seen city boundaries shift substantially, putting pressure on WASCO to extend the supply services to areas not previously within its territory. Following the commissioning of the MDWSP, WASCO is now able to produce adequate water to meet the increasing water demand, provided distribution network challenges in these areas are addressed. Intended to supply those parts of Maseru which currently do not have access to clean water, the Greater Maseru Water Supply Programme covers feasibility and preliminary design of water distribution networks and all associated infrastructure in the three packaged areas. These comprise: South (Masana, Mazenod, Ha Luka, Bosofo, Lenono and Makhoathi); South-West (Tsiame, Ha Tikoe, Ratjomose/Lesia, Tsautse and

Qoaling); and North-East (Maqalika, Mabote, Tsenola, Foso, Marabeng and Berea).

hydroelectricity) and royalties. In its totality, the LHWP consists of five large dams implemented in four phases and eventually transferring 70 cubic metres of water per second to South Africa.

The initial study, which was undertaken with a grant from BADEA, examined the technical, financial and economic feasibility of providing water to these areas as well as developing preliminary water supply designs for a planning horizon of 2040. The findings of the study revealed that embarking on water supply projects in the selected areas would be economically viable, as clean water will not only improve the health status and productivity of the residents, but also their livelihoods. The project is currently awaiting financing for the detailed design and construction supervision. The residents of Ha-Foso and Marabeng in Berea district are to be given access to clean water, thanks to the Drought Relief Water Supply Project, a joint effort between the Ministry of Water, WASCO and the Disaster Management Authority (DMA). The project was introduced by Government in response to the 2015/16 El Niño-related drought that affected the greater part of southern Africa. This complements efforts to provide water to urban dwellers through the Greater Maseru Water Supply Programme. The Maseru Waste Water Project is funded by the Government of Lesotho (M25 million) and BADEA (M35 million) and implemented by WASCO. The aim is to provide a modern, environmentally friendly system of wastewater collection and treatment within the administrative boundaries of Maseru, and the project consists of rehabilitation and extension measures for the improvement of the wastewater collection, treatment and disposal systems in town areas where a piped sewerage system exists or proves justified. Rural water supply and sanitation The Department of Rural Water Supply is presently implementing the Rural Water Supply and Sanitation Project which has the objective of

Phase I of the LHWP included the construction of Katse and Mohale dams, ‘Muela hydropowerstation, and associated tunnels and reservoirs, and was inaugurated in 2004. The transfer scheme sees water travelling from a network of reservoirs at Mohale, Katse and ‘Muela through the transCaledon tunnel and then into the Vaal Dam in Gauteng – South Africa’s industrial heartland.

Mohale Dam © Anne Wade improving the health and livelihoods of Basotho living in rural areas. This will be achieved through increased and sustained access to improved domestic water supply and sustained access to improved latrines, as well as cultivating better hygiene practices among beneficiary communities. In total, the scheme comprises 79 water supply systems and 11 140 VIP latrines in villages across Lesotho. The project budget stands at M75.819 million. Progress on all water systems under construction is at 63 percent.

of the reservoir with potable water through the construction of gravity-fed water supply systems, sanitation facilities and refuse disposal facilities. By the first quarter of 2017/18, construction had been completed on 17 water supply systems and was ongoing on a further three.

The Village Water Supply Project, which is also implemented by the Department of Rural Water Supply, has a budget of M30 million. The main activities include maintenance of existing rural water systems and their rehabilitation, as well as construction of new water supply systems and VIP latrines.

Lesotho Highlands Water Project An African success story, the Lesotho Highlands Water Project (LHWP) is a multiphase initiative established by a 1986 treaty between Lesotho and South Africa, and one of the most ambitious engineering projects ever undertaken on the continent. It has proven to be a winning crossborder water collaboration scheme, contributing significantly to the promotion of sustainable economic growth, reduction of poverty and improvement in the livelihoods of Basotho and South Africans.

The Katse-Lejone-Matsoku Water Supply, Sanitation and Refuse Disposal Programme has a budget of M15 million and is being implemented by the LHDA. Its aim is to protect the water quality of the Katse reservoir and to improve livelihoods by providing the communities upstream

Involving the construction of dams and tunnels in the two neighbouring countries, as well as the generation of hydropower, the water transfer scheme provides water for South Africa’s domestic and industrial use, with Lesotho reaping the rewards of associated infrastructure (roads and

Phase II of the LHWP entails the construction of the Polihali Dam at Tlokoeng in Mokhotlong below the confluence of the Khubelu and Senqu rivers, as well as additional transfer tunnels feeding water to the Katse Dam. Once completed, this will enable water delivery capacity to rise from 780 million cubic metres per annum to some 1 270 million cubic metres per annum, dependent on the operating rules and water demand. Pending the outcome of further feasibility studies, a hydropower component in the form of a pumped storage scheme may also be constructed. Not only will Phase II of the LHWP guarantee a reliable and cost effective water supply for South African industry, it will also see Lesotho benefit from increased royalty revenues and electricity generation capacity. LHWP Phase II was launched in March 2014, and the focus has subsequently been on procuring consultants for its implementation. While initial activities concentrated on advance infrastructure works (access roads, bridges, telecommunications, electrification and project housing), the core water transfer components are now in the spotlight. The main contract, which is for the design and construction supervision of the dam, was awarded in July 2017 to Matla a Metsi Joint WATER & ENERGY 63

The Metolong Programme which is an initiative of the Lesotho Government to ensure a secure and reliable water supply for domestic and industrial use to Maseru and the surrounding towns of Roma, Mazenod, Morija and Teyateyaneng has now been completed. The Programme forms part of the Lesotho Lowlands Water Supply Scheme which aims to ultimately bring water to all the lowlands regions of the country. This Programme was given priority over others because over the years Maseru and the surrounding towns have undergone rapid urban growth which has put a strain on resources such as water. The Programme comprises 5 major components: · Advance Infrastructure · Metolong Dam · Water Treatment Works • Downstream Conveyance System · Environmental and Social Management Programme 1. Advance Infrastructure • 32 km North Access Road • 10 MVa Power Supply • 30 m3 per day water and sanitation • 12 km South Access Road • Bulk Power Supply • Telecommunications • Civil Works and Waste Water Treatment Works • Vehicle, Pedestrian Bridges and Rural Access Roads • Staff Housing • Visitor’s Centre • Police Stations Renovations

2. Metolong Dam - The Metolong Dam is constructed from Roller Compacted Concrete (RCC) and has the following properties: • Height - 83m • Crest Length - 270m • Width - 60m (bottom) - 7m (top) • Spillway Elevation - 1671 m ASL • Reservoir Capacity - 63 million cubic metres • Reservoir Length -13.5 Km

Key Milestones • Construction of the wall commenced in August 2013 and was completed to full height in February 2015 • First impoundment of the Dam took place on 17 February 2014 • First Water delivery to the Water Treatment Works commenced in May 2014

3. Water Treatment works • Capacity - 75 ML/d (average) - 93 ML/d (peak) • High lift pump station • 700 m raw water pipe from reservoir • Treated water pump station • 2.5 km treated water pipeline to the command reservoir • 40 ML Command Reservoir

4. Downstream Conveyance System Contract 1—Primary Pipeline to Maseru • 36Km pipeline to Maseru of 120mm – 800mm diameter steel pipe • Reservoirs at Mpilo • Metolong Connector: Connecting the bulk water into Maseru water system including connections to High South, Mabote, Naleli and Lesotho Sun Contract 2—Secondary Pipeline to Roma, Mazenod and Morija • 63Km pipeline to Roma, Mazenod and Morija of 660mm – 200mm diameter steel pipe • Reservoirs at Roma, Mazenod, Mantsebo and Morija Contract 3 — Secondary Pipeline to Teyateyaneng • 25Km pipeline to Teyateyaneng of 460mm – 300mm diameter steel pipe • Reservoir at Teyateyaneng (Ha-Mokhothu) Key Milestones • First water delivery to Roma, Mazenod and Morija September 2014 • First water delivery to Teyateyaneng - January 2015 • First water delivery to Maseru, High South Reservoir – March 2015 • First water delivery to Maseru, Mpilo Reservoir – May 2015

The two reservoirs at Mpilo

The resevoir length is about 13.5km

Closer view of the Water Treatment Plant

29 Mabile Road, Red Cross Building, Private Bag 9137, Maseru 100 Tel: (+266) 2231 5789, Fax: (+266) 2231 5804, Email: info@metolong.org.ls, Website: www.metolong.org.ls 5. Environmental and Social Management Programme An Environmental and Social Management Plan has been adopted which seeks to mitigate any adverse impacts on the environment and communities affected by the Metolong Programme. The plan includes the following: • Resettlement and Compensation To ensure that the people affected by the Metolong Programme are compensated for any losses incurred. • Livelihood Restoration Programme Communities affected by the Programme are assisted to improve their livelihoods through various income generating projects. • Cultural Resources Management To identify, preserve and rescue where necessary, the cultural heritage of the Metolong catchment for present and future generations. • Integrated Catchment Management To ensure that the communities achieve a sustainable and balanced utilization of land, water and other resources to maintain water quality and long-term storage capacity of the dam. • In stream Flow Requirements To ensure that the amount, quality and timing of water released from the dam maintains downstream plant and animal life in optimal health and also meets the social needs of communities downstream. • HIV/AIDS Management Programme The objective is to minimise the risk of transmission of sexually transmitted diseases especially HIV/AIDS on the labour force and surrounding communities. • Construction Monitoring Programme To ensure that all contractors comply with environmental and social requirements, including health and safety measures. • Community Participation To ensure two-way communication between the Programme and all relevant stakeholders, especially affected communities. • Rural Electrification—Electrification of over 70 villages in the Programme area. • Water and Sanitation Services (WATSAN) - Provision of water and sanitation services to over 70 villages in the Programme area.

The Metolong Programme is financed by several Funders as shown below: COMPONENT Advance Infrastructure Phase 1 & 2

FUNDER Government of Lesotho Republic of South Africa (The African Renaissance and International Co-Operation Fund) European Investment Bank

Metolong Dam

Kuwait Fund for Arab Economic Development Arab Fund for Economic Development in Africa OPEC Fund for International Development Saudi Fund for Development Abu Dhabi Fund for Development European Investment Bank Government of Lesotho

Water Treatment Works

Millennium Challenge Corporation European Investment Bank Abu Dhabi Fund for Development

Downstream Conveyance System

European Investment Bank World Bank Government of Lesotho Abu Dhabi Fund for Development

Environmental and Social Programme

Government of Lesotho World Bank

Ntloana-Tšoana cave on the Phuthiatsana River which is now under water

Vehicle Bridge on the Metolong Dam

Venture for M445 million. Construction of the dam is scheduled to begin in December 2019 or January 2020 (by which time most of the advance infrastructure will have been completed) and the first water delivery to South Africa should take place early in 2025. The estimated cost of Phase II’s water-transfer component is M22.9 billion. In respect of the recruitment of personnel by the LHDA, preference is being given to nationals of Lesotho, South Africa and the Southern African Development Community (SADC) member states, in that order, provided that the required skills and experience levels are met. Particular attention is being given to the relocation of the 2 500 people affected by the dam construction, with the LHDA developing compensation and resettlement programmes to ensure that those affected are fairly compensated and that physically displaced households are properly relocated and re-established. The Authority has engaged with local communities and other stakeholders in the development of the Compensation Policy to ensure community concerns are addressed and that such communities understand the compensation process.

LESOTHO ELECTRICITY & WATER AUTHORITY The Lesotho Electricity Authority Amendment Act of 2011 was passed in order to broaden the mandate and scope of the former Lesotho Electricity Authority (LEA). This saw the creation of the Lesotho Electricity and Water Authority (LEWA), which in 2013 assumed responsibility for regulation of the Water and Sewerage Company (WASCO) in addition to the Lesotho Electricity Company (LEC). Activities regulated by LEWA thus encompass the generation, transmission and distribution of WATER & ENERGY 66

electricity, and the supply as well as import and export of electricity, not to mention the regulation of the following urban water and sewerage services: water treatment, production, transmission, distribution and supply, storage of water for treatment, distribution or onward supply, the delivery of water to trunk or main pipelines, and the treatment and disposal of wastewater by the sewerage system. LEWA’s prime responsibility is to ensure that water and electricity are provided to industry and business, as well as domestic, public and government consumers, private education and health institutions, in a manner that is affordable, reliable and cost effective. This entails putting mechanisms and policies in place that encourage, promote, monitor and evaluate local private sector participation in the efficient financing and timely construction of water and electricity programmes, as well as the collection of data on water and electricity schemes in all constituencies. LEWA also protects the interests of all consumers of electricity, water and sewerage services in relation to access, quality and price of service, and makes appropriate recommendations to Government. Important developments under LEWA include its administration of the Universal Access Fund, preparation of legal and regulatory frameworks for both electricity and urban water and sewerage services, and sound financial management strategies. Furthermore, the Authority has developed and implemented mechanisms to expedite the resolution of customer complaints. LEWA’s 2014-2019 Strategic Plan takes into account its broadened scope of services. A set of incremental activities and projects form part of its planned strategic initiatives, with the focus on harmonising roll-out of strategies. As the roles and responsibilities of the various key players in the energy sector are not clearly defined, a bridging programme by the EU under the National

Indicative Programme (NIP) of the 11th European Development Fund (EDF) has been proposed to assist in addressing this issue. The EDF, which runs from 2015 until 2020, identifies the focal areas of water, energy and governance for development cooperation, with €142 million having been set aside for the implementation of projects in these areas. Some €28 million is earmarked for energy production, electrification, conservation and efficiency, and €78 million for the expansion of water supply and sanitation infrastructure and rain water collection.

ENERGY The Department of Energy (DoE), which operates under the Ministry of Energy and Meteorology, is tasked with managing and administering the energy sector in Lesotho as well as developing policies and strategies to ensure the security of such supplies and services. The Rural Electrification Unit (REU) is mandated to develop, operate and maintain transmission and distribution networks as well as rural electrification. Lesotho is well placed to expand its production of indigenous renewable energies, with an estimated 14 000 megawatts of hydropower potential in addition to substantial wind and solar resources. However, the energy sector is currently characterised by a reliance on biomass (wood and dung) and imported coal and petroleum. Electricity makes up only 4 percent of Lesotho’s energy balance, and as of 2016 there was a household connection rate of 38 percent. The rest of the population relies on multiple fuel sources to meet their energy needs. Government has set targets to expand the electrification rate to 50 percent of the population by 2020, along with ensuring security of supply using locally available renewable energy resources (a targeted 200 megawatts) and constructing strategic fuel reserves and regional depots to assist other sectors of the economy.

The 2016 Population and Housing Census shows that household penetration of electricity in Lesotho is 59.7 percent in urban areas, 52.3 percent in the peri-urban areas and 14.2 percent in the rural areas.

Access to electricity is predominantly enjoyed in urban areas, where about 60 percent of households are connected to the network. The country’s mountainous landscape and remoteness of rural settlements results in high grid extension costs, and access to electricity in these areas is just over 14 percent. In rural locations, biomass is used for cooking and heating, and candles and paraffin for lighting. By contrast, urban households rely less on biomass and more on paraffin and gas for heating and cooking, while they use a combination of electricity, paraffin and candles for lighting. Electricity demand (a significant proportion of which comes from manufacturing and the garment industry) currently outstrips supply, and Lesotho imports about 35 percent of its annual electricity needs. While the ‘Muela hydropower plant has a capacity of 72 megawatts, peak demand for electricity in 2016 was about 153 megawatts, and is expected to grow to 304 megawatts by 2020 and 432 megawatts by 2030. Developed by the DoE, Lesotho’s Energy Policy (2015-2025) aims to make energy universally accessible and affordable in a sustainable manner, with minimal negative impact on the environment. The policy provides for the participation of public agencies, non-governmental organisations (NGOs), research and training institutions, private organisations and development partners, among others. Local private partners are invited to become involved in energy initiatives, with the new policy stipulating 50 percent domestic participation. This includes the distribution and transportation of petroleum.

VISION Be a benchmark of excellence in the provision of electricity. MISSION To provide reliable, safe, environmentally friendly and quality electricity for sustainable economic growth and improved quality of life for the people of Lesotho. VALUES Excellence in customer care, Safety and quality consciousness, Corporate Governance, Regulatory compliance, Zero tolerance to corruption, Responsiveness to employee needs, Team work approach, Adaptive to change. ELECTRICITY CONNECTIONS The LEC annual target, which is set by the government for LEC to connect 15,000 new customers was met and exceeded countrywide. LEC managed to achieve 15,608 connections thereby clocking around 40% of the total household connectivity. This is in line with government’s long term goal to connect 50% of the households by the year 2020.

SYSTEM IMPROVEMENTS AND MAJOR WORKS LEC carried out major projects in order to increase the network capacities both at transmission and distribution levels. Some of the projects were also creating redundancy on the network with the aim of improving reliability and availability of LEC’s electricity supply, hence maintaining quality power supply to LEC customers. Major works that were done include installing of line bay of the second 132kV line between Mabote and Mazenod substations and adding the third 40MVA 132/33KV transformer at Mazenod substation. LEC also upgraded two 33/11kV Maputsoe transformers from 10MVA to 20MVA each in order to address gradual load growth around Maputsoe Industries and surrounding villages.

viability of a project to construct the132kV line to connect Qacha’s Nek and Semonkong to the national grid so as to improve the availability of electrical supply to the areas and to facilitate economic growth of the two towns. Other transmission projects that started during the financial year include the construction of a 33kV line from Metolong to St. Agnes, installation of a transformer at Mazenod distribution substation, as well as re- commissioning of the Litšoeneng substation in Mohale’s Hoek.

TRANSMISSION AND DISTRIBUTION PROJECTS A feasibility study for the 132kV line from Mazenod to Qacha’s Nek via Semonkong was completed during the reporting period. The feasibility study which was worth M3, 8 million, was aimed at establishing and confirming

CORPORATE SOCIAL RESPONSIBILITY The Company has, during the financial year 2016/2017 donated a total of M372, 400.00 to a variety of beneficiaries including Non-Governmental Organizations in support of various corporate and institutional events, awards for

BULK SUPPLY AGREEMENTS LEC continued with the three bilateral bulk supply agreements with LHDA, ESKOM and EDM for its bulk electricity supply. The supply points are Maseru bulk for Eskom and EDM, ‘Muela for LHDA and again Qacha’s Nek and Clarens for Eskom.

academic excellence at Tertiary Institutions and the orphaned and vulnerable children with their diverse needs as per their requests. This, LEC has been exercising in an effort to make a positive impact towards the community it serves. The company has therefore considered social responsibility a priority and thus has committed through provision of a budget every financial year. STAKEHOLDER ENGAGEMENT LEC embarked on a campaign to engage all stakeholders in all districts of the country. Key stakeholders were identified as target audience at district level and LEC invited them to a one day meeting each. During the meetings which were officiated by the District Administrators in the various districts, LEC officials educated the participants on LEC Operations, highlighting all the essential components that are key and critical for the customer to know and comprehend.

We light the nation

One of the three transformers at Mazenod Transmission Substation rated at 40MVA 132/33kV.

132kV and 33kV lines at Thaba-Putsoa Range

A donation to Habitat by LEC for Energy saving stoves

Countrywide awareness campaign with the Butha-Buthe Stakeholders

The Strategic Plan for the Ministry of Energy and Meteorology (2015/16-2020/21) focuses on climate change mitigation and adaptation strategies which include national sustainable energy initiatives. The Sustainable Energy Strategy and Action Plan (2018-2022) has been developed to assist in the implementation of the Energy Policy. The electricity supply industry The electricity supply industry in Lesotho is dominated by two state-owned entities. The Lesotho Electricity Company (LEC) is the monopoly transmitter, distributor and supplier of electricity, while the Lesotho Highlands Development Authority (LHDA) is the main generator of electricity through its 72-megawatt ‘Muela Hydropower Plant, which is part of the Lesotho Highlands Water Project. There are also some small hydro projects providing generation capacity totalling around 4 megawatts. Indigenous generation sources are supplemented by imports from South Africa (Eskom) and Mozambique (EDM). Changes took place in the electricity industry in the post-2000 period when, as part of its programme to restructure state-owned assets, the Government decided that LEC would be privatised while ‘Muela would be ring-fenced within the LHDA to ensure that its costs were known. The LEC is responsible for electrification within its service territory, with rural electrification efforts currently managed by the Rural Electrification Unit of the Department of Energy. A Universal Access Fund disburses monies in order to subsidise the capital costs of electrification in the country, with the goal of facilitating the development and expansion of electricity service infrastructure. Puma Energy Puma Energy is a midstream and downstream petroleum company which operates across five continents in 47 countries, including Lesotho. One of the largest independent storage and downstream companies in Sub-Saharan Africa, it operates from more than 662 retail sites and 29 airports in the WATER & ENERGY 68

region, and provides deliveries to industrial and commercial customers in some of the most remote areas.

viability of building a 132kV line from Mazenod to Qacha’s Nek via Semonkong, to connect these areas to the national grid, has been completed.

Puma Energy is a well-resourced and well-managed business, with global know-how of the fuel industry and an understanding of the challenge of delivering sustainable growth in both emerging and mature markets. Its key success factors include: wise and decisive investments; operating in strategic locations; operating efficiently; employing talent; and being responsive and flexible.

For 2017/18, the energy sector has been allocated a sum of M316.5 million. Of this amount, M169.0 million was set aside for the connection of 10 000 households in Leribe and Botha-Bothe to the power grid, through the BADEA-funded Northern Districts Electrification Project, while rural electrification received a budget allocation of M147 million.

Puma Energy LS (Pty) Ltd entered the Lesotho market in October 2016 through acquisition of Exel Petroleum Lesotho. In addition to owning and operating a fuel terminal of 1 200 cubic metres in Maseru, the company has a footprint of 22 retail sites, situated predominantly in the lowlands of the country. Furthermore, Puma Energy LS supplies various customers outside of its retail chain, in sectors such as mining, construction (buildings and roads), transport and independent business.

A M151.76 million loan agreement from the AfDB in 2017 is financing the Urban Distribution Rehabilitation and Transmission Expansion Project, which aims to rehabilitate 188 kilometres of distribution lines and switching stations and expand the transmission network through upgrading a substation and building 8 kilometres of transmission lines. The networks include Quthing to Mohale’s Hoek, Roma to Thaba-Tseka, Maseru, Teyateyaneng, Botha-Bothe and Letšeng Diamond Mine in Mokhotlong.

Expanding electrification Accelerating the electrification programme is a key policy tenet of Lesotho’s Government. In addition to its focus on renewable and sustainable energy sources which have limited negative impact on the environment, the Ministry of Energy and Meteorology is committed to fast-tracking electrification projects and electricity connections. The LEC’s annual target of connecting 15 000 new customers to the electricity grid annually has been met and exceeded countrywide, with 15 608 household connections achieved in 2016/17 compared with 14 215 in 2015/16. This brings total household connectivity to around 40 percent. Recently completed transmission projects include the construction of a 33kV line from Metolong to St Agnes, installation of a transformer at Mazenod substation, upgrading of transformers at Maputsoe substation as well as re-commissioning of the Litšoeneng substation in Mohale’s Hoek. In addition, a feasibility study to determine the

Improving access to electricity for rural communities continues to be a major challenge. Even though Lesotho is a relatively small country, around two-thirds of its land area comprises mountainous terrain which is sparsely inhabited. The majority of rural villages lack electricity and the probability of connecting them to grid electricity in the foreseeable future is very low, given the commercial nature of grid electricity and the generally low income levels among the population. Energy sector initiatives are currently focused on increasing access to electricity in remote areas through the development of private sector led offgrids and energy trading centres. The Rural Electrification Programme was launched in October 2017 in the three villages of Ha Sofonea, Ha Majara and Ha Tonki in ThabaBosiu. Being undertaken at a cost of M6 million,

this represents the first phase of the project and will benefit 545 households. The project will be extended to other rural villages across Lesotho in due course, with the aim of electrifying 7 000 rural households per year. To enable a community to be electrified, there has to be a village or community electricity scheme, spearheaded by a committee, with each family paying a minimum deposit of M500.00 to be connected. The balance of the cost (M1 500.00) is paid either on a monthly basis for a period of seven years, or by a pre-determined surcharge each time that electricity is purchased. Renewable energy Lesotho is fortunate to have an abundance of solar, wind, and hydropower resource potential that well surpasses its relatively modest energy needs. Realising the potential of these resources is a focus of the Government’s Vision 2020 strategy, and investment in renewable energy is viewed as a means for addressing many of the energy sector challenges faced by the country. Increased generation capacity from utility-scale solar PV, wind and hydropower could reduce Lesotho’s dependence on imports from South Africa, while decentralised technologies powered by solar, wind or biomass could bring access to modern energy services to the Basotho who currently rely on biomass and kerosene to meet their energy needs. Approved for implementation in 2016, ‘Development of Cornerstone Public Policies and Institutional Capacities to Accelerate Sustainable Energy for All’ is a Global Environment Facility (GEF) project. Its aim is to develop financial regulatory systems to catalyse investments in renewable energy-based mini-grids and energy centres, thus reducing GHG emissions and contributing to the achievement of Lesotho’s Vision 2020. Government is also developing the Low Emission Investment Plan to facilitate the deployment of renewable energy technologies. Lesotho is eligible for funding under the World Bank’s Scaling Up Renewable Energy

DEPARTMENT OF ENERGY ...ensuring sustainable energy for all Basotho ENERGY SECTOR OVERVIEW The Energy Sector in Lesotho is managed and administered by the Ministry of Energy and Meteorology through the coordinative function of the Department of Energy (DOE). The energy sector comprises multistakeholders and institutions ranging from regulator, implementers, financiers, academia and private sector. The regulatory function is handled by Lesotho Electricity and Water Authority while coordination is handled by the Department of Energy. Other key players in the energy sector are Lesotho Electricity Company; the monopoly electricity transmission and distribution utility; Rural Electrification Unit is mandated to develop, operate and maintain distribution network in the rural areas; Petroleum Fund is an energy institution tasked with financing projects within the petroleum sub-sector. The private sector and development partners are responsible for implementation and funding of energy projects. The DOE is mandated to create an enabling environment in the energy sector through: •

Development of policies and strategies in order to ensure security of energy supply and services ; and

•

Coordination and management of the energy sector

The DOE has four divisions that are all established to attain the mandate of the department, these are Planning, Renewable Energy, Conventional Energy and Administration divisions. In an attempt to achieve its coordinative function of the energy sector, DOE established Energy Sector Coordination Forum (ESCF) in 2015. The multisectoral ESCF objective is to create a platform for sharing information on energy programmes and plans as well as to share lessons learnt.

Policies, Strategies and Plans The DOE developed and launched Energy Policy 2015-2025; the policy provides strategic direction in the energy sector. The policy vision pronounces that “Energy shall be universally accessible and affordable in a sustainable manner, with minimal negative impact on the environment. The Energy Policy has 15 policy statements that are targeted at attaining the strategic priorities identified in the National Strategic Development Plan. To implement the Energy Policy, the DOE developed Sustainable Energy Strategy and Action Plan 2018-2022. The Government made pledges that energy will be available to all Basotho at an affordable and sustainable manner and declared that it will attest to achieving 50% electrification rate by 2020, ensure security of electricity supply using locally available renewable energy resources and to construct strategic fuel reserve that would assist other sectors of the economy by the year 2020. CURRENT INITIATIVES Renewable Energies Lesotho is among the cleanest electricity generating countries in the world, with 100% of electricity generation coming from hydro power. Lesotho generates 72MW of electricity from Mmuela hydro power plant and meets the national peak demand of about 150MW through imports from Eskom and EDM. The country has potential to generate electricity from solar and wind sources which Lesotho has in abundance as per the pre-feasibility studies commissioned. Renewable Energy Resource Map to assess Lesotho’s renewable energy potential is currently being developed with the technical assistance from the Government of Italy under climate change mitigation project. The development of financial support schemes and regulatory systems for renewable energies are also being carried out by the Global Environment Facility project titled “Development of cornerstone Public Policies and Institutional Capacities to accelerate Sustainable Energy for all”. To further scale-up renewable energies in Lesotho, the Government

of Lesotho is also developing the Low Emission Investment Plan to facilitate the deployment of renewable energy technologies. Conventional energies; The conventional energy sector comprises petroleum and electricity sub-sectors. The policies and regulations governing the petroleum sub-sector include Fuel and Services Control Act 1983, Fuel and Services Control (importation of Petroleum Products) Regulations 1999, Guidelines for a registered Oil company and Safety Guidelines and necessary facilities for filling/service stations. The policy framework of the petroleum sector is housed in the Ministry of Energy and Meteorology. The role of petroleum price setting is housed in the Petroleum Fund. Importation, transportation and distribution of petroleum products are handled by the private sector. DOE in collaboration with the Ministry of Trade and Industry are responsible for licensing of petroleum companies. The current electrification rate of Lesotho is 40.8% of households and is mainly centred in the urban areas. The total number of households in Lesotho is 537,456 with 219,432 electrified households in 2016/17. The electrification programme comprises a BADEA funded Northern Districts electrification project targeted at electrifying approximately 10 000 households including public institutions in the two districts of Leribe and Butha-Buthe. There is also Rural Electrification programme that targets annual electrification of 7000 rural households.

Hon. Mokoto Hloaele (Minister of Energy and Meteorology) launching rural electrification project

MINISTRY OF ENERGY AND METEOROLOGY Department of Energy P/Bag A91, Maseru 100, Lesotho Tel: +266 22322349 Telecommunication Station powered by hybrid RE sources

Solar Generation Facility at Moshoeshoe 1 International Airport

There are several electricity generation projects planned that are aimed at ensuring Lesotho security of energy supply, inter alia: multipurpose dams at Makhaleng, Hlotse and Senqu with a potential of 40MW, 10MW and 120MW respectively. The Lesotho Highlands Water Project component of electricity generation as per the treaty is currently identifying electricity generation options and feasibility studies are being carried out. Feasibility of a 20 MW solar power plant has been completed and independent power producer appointed. For wind power generation, 35MW and 15MW power plant feasibilities have been completed for Letseng and Semonkong respectively. To further facilitate the security of petroleum products, the Government of Lesotho has embarked on developing Strategic Fuel Reserve and regional depots.

Programme in Low Income Countries (SREP), which provides financing for renewable energy technologies, including solar, geothermal, wind, small hydropower (below 10-megawatts per site) and bioenergy. The SREP Sub-Committee allocated Lesotho an envelope of US $30 million in this regard. An investment plan has been prepared with input from the World Bank, International Finance Corporation (IFC) and AfDB, and was published for public consultation in November 2017. The plan includes an assessment of technical potential for various renewable energy technologies that can be used in Lesotho. These include: • Utility-Scale Solar PV – 118 megawatts • Utility-Scale Wind – 2 077 megawatts • Small-Scale Hydro – 36 megawatts • Waste-to-Energy (city waste) – 10 megawatts • Solar Micro-Grids (solar battery) – 31 megawatts • Floating Micro-Hydro – 0.50 megawatts • Solar Home Systems (solar battery) – 1.2 megawatts • Micro-Solar Technologies – 38 megawatts Each of these potential resources has been evaluated against national and SREP criteria, and prioritised accordingly, with Government favouring technologies that result in job creation, improve energy security, and promote increased private sector investment. SREP funds will be used to support investments in three on-grid technologies (solar, wind and small hydro) and three off-grid technologies (micro-grids, solar home systems and improved cook-stoves). The programme consists of two core investment-focused components and a third technical assistance component. For the first component, it is proposed that SREP resources be used to finance the development of a 20-megawatt solar PV plant – the first commercial utility-scale plant in Lesotho. This has been chosen as utility-scale solar is competitive with imported energy and is economically and financially viable. By contrast, wind is economically viable, but only financially viable with subsidies. The economic viability of small hydropower plants is site-specific, WATER & ENERGY 70

an integration study, geotechnical investigations and legal and commercial arrangements, should be submitted in the first quarter of 2018. The aim is to bring the hydropower component of the LHWP to a bankable state, with other options similar to the Kobong scheme also being reviewed. A design phase will follow the study, with construction expected to begin in 2021.

One of the three transformers at Mazenod Transmission Substation rated at 40MVA 132/33kV © Lesotho Electricity Company and they require subsidies to be financially viable. Covered with solar panels, Vodacom’s new Maseru headquarters is carbon neutral, powered by renewable energy, and ranks as the biggest ‘green’ building in Lesotho.

As regards the second component, SREP resources would be used to finance the development of 9-megawatts of solar PV-battery hybrid microgrids through an off-grid concession scheme. The SREP would also finance the development of 0.77-megawatts of solar home systems (SHS), other solar technologies, and improved cook-stoves (ICS). Micro-grids are competitive with diesel generators, but the cost might still be too high for rural customers. On the other hand, ICS pay for themselves within a few months because of offset fuel costs, and they are economically and financially viable if investment is financed. SHS needs subsidies to be affordable, and although solar pumps are competitive with diesel pumps, it is unclear if other solar technologies are also competitive. Relating to the third component, US $3.6

million in SREP grants would be used for: an AfDB-managed renewable energy integration study (US $0.6 million); World Bank managed site specific prefeasibility studies; and project preparation (US $1.5 million). Future initiatives While the outcome of the initial Lesotho Highlands Water Project (LHWP) Phase II feasibility study was not conclusive in respect of the hydropower component, the Kobong Pump Storage Scheme was identified as the most likely option. This 1 200-megawatt scheme would consist of a hydropower station, the existing Katse Reservoir as the lower reservoir and a new upper reservoir in the Kobong valley. It could potentially cover the future domestic demand of peak and intermediate loads for Lesotho, as well as allowing for the export of peak energy. A consultant was engaged in the latter part of 2016 following technical and economic feasibility study recommendations that further studies should be undertaken before the exact form of the hydropower component was decided. The report on these studies, which include a market study,

A 20-megawatt Solar PV Project (discussed under the SREP investment plan) is expected to become the first such utility-scale solar project in Lesotho, with the power generated to feed into the national grid in Mafeteng. This follows the approval of a US $695 500 grant to NEO I SPV, a subsidiary of IPP OnePower Lesotho. The grant comes from the AfDB-managed Sustainable Energy Fund for Africa (Sefa) to support the structuring of the project and lead it to bankability. This is intended to be a reference solar PV project for the SADC region. The Sefa funding goes towards technical and financial services, environmental and social impact assessment, lenders’ due diligence and risk allocation. Managed by the African Development Bank, Sustainable Energy Fund for Africa (Sefa) supports the sustainable energy agenda in Africa through grants to facilitate the preparation of medium-scale renewable-energy generation and energy efficiency projects; equity investments to bridge the financing gap for small- and mediumscale renewable energy generation projects; and the public sector to create an enabling environment for private investments in sustainable energy. Contributing about 13 percent to Lesotho’s maximum system demand of some 150 MW, the project will contribute to a strategic phase-out of costly power imports, thereby decreasing retail electricity prices in Lesotho. It will also decrease greenhouse gas (GHG) emissions by reducing imports of thermal-generated power from South Africa, and support rural development by stabilising the grid in Mafeteng province.

Information &

Communications Technology

Lesotho has experienced more than a decade of rapid growth in the communications sector, and current initiatives concentrate on improving the operating environment and backbone infrastructure, as well as achieving the goal of universal access to ICT services for its citizens.

Telecommunications development in rural areas © LCA Mobile telephony has been at the forefront of growth in Lesotho’s ICT sector, and there has been sustained and ongoing investment in the country’s communications infrastructure, wireless and fibre networks, data centres and switches. These developments are complemented by service centres and hotspots at schools and community centres, where internet and broadband facilities are being made available even in the most remote areas of the country. However, Lesotho’s topography, together with the low population densities in the mountain regions, continues to present a challenge to making universal access a reality, and therefore, by extension, preparing Basotho to participate fully in the digital future.

the subsector will reach a projected 12.6 percent in 2017 and 12.7 percent in 2018.

construction of a data centre in Mohale’s Hoek. The project is expected to wind up in 2018.

REGULATION & COMPETITION

Current government initiatives The Ministry of Communications, Science and Technology plans to install a fast, safe and reliable platform for all government telecommunications and internet services. This will allow government ministries, private businesses and individual citizens to develop a meaningful and significant web presence. E-government services, where Basotho can access educational materials, health and consultative services, and apply for enrolment in schools and tertiary institutions, are set to become a reality in the near future.

The Lesotho Communications Authority (amendment) Act of 2008 broadened the Lesotho Telecommunications Authority Act of 2000 to include electronic media. The communications sector, which now encompasses telecommunications, broadcasting, radio frequency and postal services, is regulated by the Lesotho Communications Authority (LCA).

According to the Central Bank of Lesotho (CBL) in its latest annual report, the positive performance of Lesotho’s services sector during 2016 was strongly supported by the Information and Communication subsector, where technological advancements and new products, particularly in the mobile phone industry, continued to drive growth. The CBL’s Economic Outlook 2016-2018 predicts that the subsector will continue to benefit from the ongoing enhancement of telecommunications products, including increased coverage of internet services and the rapid expansion of mobile money services by mobile operators. It is predicted that real growth in

Launched in 2014, the E-Government Infrastructure Project is co-funded by the Lesotho Government and the African Development Bank (AfDB). It has four main components; namely, strengthening of core government network infrastructure, strengthening of data centres, improvement of the government e-portal, and skills development. Activities completed during 2017 include the construction of five towers – located at Senqunyane in Mokhotlong, Likhoele in Mafeteng, Ha Ts’ilo in Maseru, Malimong in Berea and Thamathu in Qacha’s Nek – as well as the renovation of a video conferencing centre and

The Ministry’s medium term priority areas include: • Construction of an office complex to house the Department of Broadcasting, including broadcasting studios, an administration block and recording studios • Reorganising the structure of Postal Services and the Lesotho National Broadcasting Services from being full Government entities to corporations, each with a board of directors, in order to promote the free flow of high quality information through competitive and accessible platforms • Enhancement of good governance by the deployment of a modern and secure e-government broadband infrastructure The 2017/18 development budget of M120 million covers projects such as: the PostBank recapitalisation initiative; transformation of broadcasting services; construction of the broadcasting building; the Data Network Project; and the E-Government Infrastructure Project. The importance of the internet in promoting Lesotho as a business and tourism destination cannot be overemphasised.

The LCA’s main objective is to facilitate new entries into the communications market and the provision of new services, including converged communications services, while promoting Lesotho’s participation in the global information society. Its mandate covers issuing licences to operators, promoting fair competition, approving tariffs, managing the radio frequency spectrum, empowering and protecting consumers, and typeapproving terminal equipment. The authority also cooperates with the Independent Communications Authority of South Africa (ICASA) in regulating telecommunications and broadcasting, particularly with regard to controlling signal spill-over between the two countries. One of the authority’s prime tasks is to promote a competitive telecommunications market through appropriate regulatory interventions, while creating INFORMATION & COMMUNICATIONS TECHNOLOGY 71

opportunities for all Basotho to benefit from the ICT revolution. This is being undertaken with the overall strategic objective of ensuring the delivery of a universal, affordable and high-quality service which includes rural areas and low-income subscribers. The Communications Policy of 2008 established the framework for regulating the telecommunications, broadcasting and postal sectors, in line with the Southern African Development Community (SADC) Protocol on Transport, Communications and Meteorology. Its primary aims are to: • Strengthen the regulatory capacity of the LCA • Reflect and promote the convergence of services and networks based on the internet • Foster universal access to a diverse range of high-quality communications services at affordable prices, including advanced networks, in order to enable Lesotho to participate in the global information society • Promote a competitive communications market, which entails facilitating the cooperative deployment and sharing of infrastructure while promoting service-based competition

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The Radio Frequency Spectrum Management Policy of 2014, which replaced the Radio Frequency Spectrum Policy of 2008, cleared the way for the application and deployment of innovative technological developments, especially those that enable and extend broadband uptake in Lesotho. In this respect, the LCA Board has extended the use of Industrial, Scientific and Medical (ISM) frequencies beyond wireless Local Area Networks (LANs) and hotspots to incorporate wireless mesh networks. Universal service and access Lesotho’s Universal Access Strategy was developed in 2001, and its present mandate is to ensure that all citizens have access to communications services; namely: telephony, broadband, broadcasting and basic postal services. The Universal Access Fund (UAF) was established in 2009 with seed capital of M10 million, and receives 25 percent of the revenue raised by the LCA (its parent body) and 1 percent of the annual Net Operating Income (NOI) of each of the main network operators. Its name has been changed to the Universal Service Fund (USF) to reflect the emphasis on service over access, in line with the 2012 Communications Act.

Replacing the Lesotho Telecommunications Act of 1979 and the Post Office Act of 1979, the Communications Act of 2012 came into effect in April 2012. The act introduced reforms to the broadcasting industry as well as providing for the independence of the Lesotho National Broadcasting Services (LNBS) and the postal services. Licensing Fees and Classifications Rules were published in 2013.

The greatest demand since 2009 has been for voice services. However, Government policy is presently directed towards broadband in order to improve the welfare of citizens. As mobile broadband and mobile voice are implemented using the same basic infrastructure, extending mobile broadband infrastructure to unserved areas will equally meet the need for access to voice services across the country.

One of the principal functions of the Communications Act is to regulate the granting of licenses by ensuring that qualifying operators give the public access to a ‘diverse range of broadcasting services’. This covers a wide spectrum of broadcasters – public, private, commercial and community – who are in turn expected to offer a varied range of broadcast content, including news, sports, entertainment, religious, educational and cultural programming.

Since its inception, the Fund has provided voice services through 48 GSM network infrastructure projects comprising 51 base transceiver stations. This infrastructure has benefited at least 125 000 people in about 800 villages throughout Lesotho. In addition to mobile network expansion, which includes mobile broadband, the Fund is also committed to the development of broadband – particularly in the education sector – where both access and usage are targeted.

Lesotho Communications Authority Telecommunications development in rural areas

Maseru Post Office

CORPORATE MANDATE:

The general objectives of the Authority are outlined in the Communications Act of 2012, and are as follows:

VISION: Access to affordable and reliable communication services throughout Lesotho by 2020.

a. To integrate the regulation of telecommunications, broadcasting and postal services to introduce efficient methods and practices which would meet international standards;

MISSION: To facilitate provision and accessibility of quality communications services.

b. To facilitate the introduction of a converged regulatory regime for the provision of communication service parameters;

VALUE STATEMENT: The Authority shall maintain integrity, professionalism and transparency in regulatory and corporate affairs.

c. To enhance consumer protection by ensuring that the Authority monitors quality of services rendered;

MOTTO: Fairness to all and allegiance to none. Lesotho Communications Authority (LCA) is a statutory body, established in June 2000, with broad mandate of licensing operators, facilitating the development of and regulating the communications sector in Lesotho. This mandate entails: granting licences to operators, promoting fair competition, approving tariffs, promoting sector development, managing the radio frequency spectrum and numbering resources, empowering and protecting consumers, type-approving terminal equipment and performing other related responsibilities.

d. To introduce competition regulation safeguards on dominant licensee(s);

Broadcasting facilities The Authority established the Universal Service Fund in 2009 and its function is to extend access to services to unserved and underserved areas that network operators consider not commercially viable. Since its inception, the Fund has provided voice services through 48 GSM network infrastructure projects comprising 51 Base Transceiver Stations (BTSs). This infrastructure has benefited at least 125,000 people in about 800 villages. All districts of the country have benefitted from the Fund. Apart from mobile network expansion, which includes mobile broadband, the Fund is also committed to the development of broadband ecosystem. The strategy is to promote broadband use in the education sector whereby the programme addresses both access and usage.

g. To efficiently manage universal access to communication services to ensure that communications services are available to Basotho in underserved and unserved areas; and

Lesotho has experienced a decade of high growth in the communications sector, driven by mobile phone technology. The national goal is to build on this success and continue to improve the operating environment and backbone infrastructure (NDSP 2014). The objective of the Authority is to facilitate new entry into the Lesotho communications market, the provision of new communications services, including converged communications services and promote Lesotho’s participation in the global information society.

h. To introduce an element of self-regulation in the broadcasting services.

Talk to us about the opportunities available in the ICT, broadcasting and postal sectors in Lesotho.

e. To enhance tariff regulation on operators classified as dominant licensees; f.

To facilitate infrastructure sharing by operators to foster universal access;

Lesotho Communications Authority: 30 Princess Margaret Road, Old Europa P.O. Box 15896, Maseru 100, Lesotho. Tel: +266 2222 4300 / +266 5222 1300 / Customer Care: +266 2232 6784 Fax: +266 2231 0984 / +266 2232 6081 Email: lca@lca.org.ls or admin@lca.org.ls Website: www.lca.org.ls

“FAIRNESS TO ALL AND ALLEGIANCE TO NONE” INFORMATION & COMMUNICATIONS TECHNOLOGY 73

To expand the mobile network to unserved and underserved areas, Government is investing in the roll-out of at least two base transceiver stations per year. The USF’s Strategic Business Plan (SBP) for the three-year period covering 2017/18 to 2019/20 is based on the mandate of the Fund as expressed in the Communications Policy of 2008 and the Communications Act of 2012. Further, it takes into account Lesotho Vision 2020, which sets out the strategic framework for the country, and the National Strategic Development Plan (NSDP) 2013-2016/17. It is also aligned with the LCA Strategic Business Plan 2016/17–2018/19. This plan is also informed by commitments that the Government has as a member of SADC and the United Nations (UN). In 2015, at a meeting of SADC ICT Ministers in Namibia, the Government of Lesotho agreed to the following targets for broadband: • Coverage – 80 percent of the population of each SADC Member State to be covered by broadband services by 2020 • Access and use in schools – Broadband connections and usage to all primary and tertiary schools to allow e-learning by 2020 • Access and use in health centres – Broadband connections and usage to 70 percent of health facilities to allow e-health by 2020 • Access and use in government agencies – Broadband connections and usage to all public sector agencies to allow for e-governance by 2020 • Access and use in households – Broadband connections to 50 percent of the SADC Member State households by 2020 • Affordability – Broadband services should not cost more than 5 percent of national average disposable monthly income by 2020 In addition to the SADC targets for broadband, the Government of Lesotho has adopted the UN’s Sustainable Development Goals (SDGs). While none of the SDGs specifically points to ICTs, their attainment depends on ICT to varying degrees. The plan acknowledges these targets, but will not INFORMATION & COMMUNICATIONS TECHNOLOGY 74

be aiming to meet them due to their wide scope which goes beyond the mandate and resources of the Fund. The focus for the next three years will be on promoting access to broadband for communities and parts of society that have had no access to date. The need for subsidies to expand mobile networks remains, in order to provide coverage to underserved and unserved areas. The Fund will be exploring access gaps in basic postal services as well as broadcasting services, and will work with the relevant parties to develop effective interventions.

TELECOMMUNICATIONS Lesotho and the rest of the African continent have seen robust growth in the telecommunications sector in the past several years, primarily because of the exceptional performance of the mobile sector and wireless technology. The Communications Sector Liberalisation Framework states that there will be no quotas set for the number of participants in any service. All existing network operators as well as specified classes of Internet Service Providers (ISPs) are allowed to operate international gateways and voice and data services are fully liberalised. The LCA estimates that over 90 percent of residential areas in the country have mobile network coverage. Furthermore, almost 80 percent of Basotho own mobile phones, and subscriptions to mobile services stand at 160 percent. Telecommunications services in Lesotho are managed by the privatised national operator, Econet Telecom Lesotho (ETL), with mobile telephony provided by ETL and South Africa-based Vodacom. Vodacom Lesotho (VCL) was launched in 1996, followed by Econet Ezi-Cel (EEC) in 2002, with the latter a subsidiary of the national fixed-line operator. In 2008, with the controlling interest in both EEC and Telecom Lesotho passing to the Econet Group, the two were merged to form the current Econet Telecom Lesotho (ETL). Both operators have launched 4G LTE services, which address the relative scarcity of fixed line connections in the country through the provision of high-speed mobile internet.

Econet Telecom Lesotho and Vodacom Lesotho offer mobile money services, which have not only provided instant, convenient and cost-effective remittance corridors, but also put financial services within reach of the unbanked and underbanked sectors of the population. Broadband is an area that requires particular focus because of the potential it has to contribute to socioeconomic development and job creation. However, while 90 percent of the country has mobile broadband coverage, the 2016 Population and Housing Census found that 67.5 percent of citizens had never used the internet, 57.1 percent did not know what the internet was, and 49.3 percent did not own a device for accessing the internet. Furthermore, 40 percent of those who did use the internet indicated that their usage was limited by the fact that it is too expensive, and 20.7 percent were limited by the slow speed of their internet connection. These findings tally with those of the State of ICT in Lesotho (2016) report, which found that in addition to issues such as lack of devices like smartphones, tablets or computers, the main reason for people not using the internet was an absence of digital literacy. Other obstacles include lack of access to energy sources for charging devices, not to mention critical factors such as the cost of devices and affordability of services. Due to high levels of poverty, broadband services remain unaffordable for the majority of the population. In the 2017/18 to 2019/20 period, the Universal Service Fund aims to assist at least 150 High Schools to access broadband connectivity, and will support digital literacy training for teachers in all schools provided with a broadband connection. In addition, limited public Wi-Fi access will be provided in designated areas (initially one per district). Content and relevant applications will also be developed, along with backbone infrastructure in USF projects. A minimum of 3G coverage is stipulated for new mobile network expansion projects, and priority areas will be upgraded to 3G or 4G under the USF.

In order to achieve true broadband, some areas also require improvements in the backhaul, including migrating from microwave to optical fibre. The Fund will further make provision for incentivising the roll-out of fixed backbone infrastructure where there is a sound business case for such. Investment opportunities The Lesotho National Development Corporation (LNDC) is currently seeking an infrastructure investor for the Lesotho National Broadband Network (NBN) Initiative, to partner with the LNDC (as anchor investors) and telecommunications service providers. The intention is to develop a shared telecommunications infrastructure company in which both parastatal and private sector players could collaborate on telecommunications infrastructure spending to achieve better results. This will make the most of capital investment by avoiding duplication of infrastructure and maximising coverage, thereby encouraging service providers to compete – based on service offerings and not infrastructure ownership – to drive economic development and job creation. The scope of the NBN encompasses the consolidation of available telecommunications infrastructure and expanding the base to make it available on an Open Access, non-discriminatory and uniform pricing basis to a large number of service providers. To ensure international communications price efficiency, it is proposed to consolidate multiple international capacity links into the NBN. An integral part to the NBN business plan includes the deployment of additional ICT infrastructure in the form of an ICT City, inclusive of data centre and call centre infrastructure, to stimulate bandwidth demand. It is envisaged that the project cost will be some US $150 million. Econet Telecom Lesotho After years of significant capital investment, Econet Telecom Lesotho is proud to offer a full range of telecommunication services to Lesotho on stateof-the-art fixed and mobile networks. It provides standalone or converged voice and broadband solutions on these networks, to individuals,

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corporates, NGOs, SMEs and governmental institutions, with products ranging from fixed lines to leased lines and fibre-to-the-building broadband, mobile voice and ISP hosting services. Econet has roaming partners in most countries across the world. The M6 million deal between Econet and the Lesotho Premier Soccer League (PSL), proclaiming Econet the new PSL sponsor from 2017 to 2020, is the biggest soccer deal ever made in the history of soccer in the Mountain Kingdom.

Pioneer and Maseru malls, as well as the LNDC office complex along Kingsway Road and in the middle of the bus stop area on the corner of Pitso Ground Stadium. Other strategic locations in Maseru include Abia and Roma. Other services offered with connectivity at their base are EcoSure and Connected Car, with additional services planned. EcoSure is a funeral insurance policy designed for prepaid mobile phone customers between the ages of 18 and 65, which is offered by ETL in partnership with the Lesotho National Insurance Group (LNIG). Connected Car offers fleet management services.

In the past few years, ETL has launched a number of services which have connectivity at their base, but which assist the customer beyond connectivity. Chief amongst these is the mobile money service, EcoCash, which is a simple and convenient way of transferring money to other mobile users, purchasing airtime, and paying utility bills and merchants. This service permits ETL customers to make payments via their mobile phones without handling cash or going to a bank to withdraw money. Furthermore, EcoCash customers can receive money from their families and friends in the United Kingdom through www.worldremit. com. While the EcoCash service is useful for ETL customers who have bank accounts, it is invaluable for the unbanked, who would otherwise lack access to financial services.

Econet Media, a subsidiary of Econet Group Limited, has launched Kwesé TV, Africa’s newest multi-platform Pay TV network. The bouquet includes live sports, news, children’s programmes and family entertainment, which is offered to Basotho at home and on their mobiles.

Econet has and continues to invest heavily on upgrading its network with fibre optic cables. Rapid internet access is vital for the future of the country, whether for business, leisure or the education and development of the youth. No technology can yet match the strength, power and low cost of internet connectivity via fibre. Fibre connectivity together with the upgrades which have been made to the network’s 3G mobile capability, means that Econet is able to offer Basotho high speed data connectivity at affordable prices.

Other mobile services Vodacom Lesotho (VCL) is owned by the Vodacom Group (80 percent) and local SekhaMetsi Consortium (20 percent). VCL has been operating in Lesotho since 1996, and has over the past 21 years invested more than M1.3 billion in technology and communications infrastructure in the country. This solid distribution network has made VCL Lesotho’s leading operator, with a market share of 90.9 percent and a customer base of 1.468 million in the year ending March 2017 – 4.9 percent up on the previous year. Minutes of Use (MOU) per month has also risen over the same period, from 75 to 82, representing an increase of 9.3 percent.

Econet products are available in all 16 Econetowned stores located in district centres countrywide, including the following in the Maseru district: INFORMATION & COMMUNICATIONS TECHNOLOGY 76

In 2017, Econet and the Lesotho Premier Soccer League (PSL) signed a M6 million, three-year deal declaring Econet the new brand name sponsor of the PSL from 2017 to 2020. The biggest soccer deal ever made in the history of soccer in the Mountain Kingdom, the sponsorship package amounts to M2 million per annum. The league champions will walk away with M500 000, while the rest of the 14 teams will share M1.5 million according to their ranking in the league.

Vodacom Lesotho’s network is equipped with more than 300 base stations, 86 of which are powered through a combination of solar and wind. A quarter of Vodacom Lesotho’s cell phone network is powered by ‘green’ base stations which use energy saving technologies such as wind and solar power to help reduce carbon emissions. Total coverage (including 2G) currently stands at 97.6 percent, while 95 percent of the country is covered by 3G and 69 percent by 4G. The company continues to invest in the network, increasing 3G and 4G sites while stepping up its fibre roll-out. VCL products include voice, data and SMS services, in addition to offerings such as the mobile money platform M-Pesa, whose customer base grew by 76.8 percent in the year to March 2017. Vodacom plans to migrate the legacy M-Pesa platform to the new ‘G2’ Vodafone financial services platform, a move which will enable improved system stability and security, while enhancing flexibility in the rollout of new products and services. The company is also involved in developing healthcare, education and entrepreneurship through the Vodacom Lesotho Foundation, which is mandated to invest in critical areas of development. In 2015, the Foundation launched its business incubation hub – Vodacom Innovation Park (VIP) – a technology-based business incubator for young entrepreneurs in Lesotho looking to leverage the power of technology and mobile communications to differentiate and make their businesses more competitive and productive. In 2017, VCL invested M3 million to support 12 entrepreneurs through a 12-week incubator programme. Vodacom iSchool is a multi-year project that delivers educational tablets to five primary schools in four districts. The tablets contain approved curriculum and relevant teaching material, from lesson plans and classroom exercises to homework and homework help sections. In the area of health, VCL’s Moyo Lesotho project is investing over M100 million into the country’s health system over three years, with the aim of

putting HIV positive children and pregnant women on life-saving treatment as well as improving maternal health outcomes for Basotho. A textto-treatment model is being used to get more HIV-positive pregnant women and children onto effective treatment programmes, with M-Pesa facilitating patients’ transport.

BROADCASTING & MASS MEDIA The broadcasting industry is dominated by private and commercial broadcasting, with both electronic and print media represented in the form of private radio and television stations and independent newspapers. The difference between broadcasting and telecommunications is accounted for in the Communications Act of 2012, which established four categories of broadcasters: public service, community, private and commercial, with each category differing according to ownership, purpose and coverage requirements. Lesotho has 21 radio broadcasters and three television broadcasters. Most of these services are concentrated in the urban areas or lowlands, while rural areas have either one or two broadcast services or no coverage at all of terrestrial television or radio. Constraints to accessing television broadcasting include the cost of equipment and satellite television subscriptions, not to mention a lack of electricity. The State of ICT in Lesotho (2016) report found that 29.5 percent of households had a working television set, and 52.8 percent of households had a functional radio. Based on the 2016 census, the penetration of television sets in rural households is 14.5 percent. There is a pressing need to develop an enabling policy as well as institutional and regulatory frameworks to facilitate broader coverage of both television and radio. At present there is a lot of infrastructure duplication, resulting in limited national coverage. A more economical approach is one that makes use of a distributor that serves the whole country, and issues licences with universality obligations for signal coverage. Content and language diversity is another issue which needs to be addressed.

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Government is presently supporting efforts to evolve Radio Lesotho and Lesotho Television from state broadcasters into national broadcasters, with the emphasis on equitable, fair and unbiased broadcasting. This change in operating culture will coincide with an investment in new equipment and broadcasting technologies. M20 million will be invested during the 2017/18 financial year in sourcing local content for radio and television. Further, a programme of investment over the next three years intends to foster the emergence of local production houses that can harness the country’s home-grown talent, supported by local content licensing. Reform within Lesotho’s broadcasting sector is seeing state broadcasting being transformed into public service broadcasting. The Lesotho News Agency (LENA) was established in 1985 as a national news agency responsible for the distribution of local, regional, and international news services to local and international media organisations, institutions and individuals. Today it provides its services by utilising Information Technology as an effective method of distributing both news and pictures from within the country and around the world. Services include news, sports events, business and economic news and feature articles by reporters across the country. Daily news feeds are available to LENA subscribers online, and are updated regularly throughout the day. Ongoing initiatives to foster the development of the sector include the corporatisation of the Lesotho National Broadcasting Service (LNBS), deployment of transmission infrastructure throughout the country, adoption of a transparent and non-discriminatory regime for the regulation of content, and promotion of internet-based ‘new media’ services. While the Lesotho Communications Policy of 2008 already makes allowance for these remedies, primary and secondary legislation is required to implement them. The LNBS is required to grant all licensed broadcasters access to its transmission infrastructure under reasonable and non-discriminatory terms, and is licensing new market participants to increase INFORMATION & COMMUNICATIONS TECHNOLOGY 78

competition in the sector. The Media Institute of Southern Africa (MISA) Lesotho is a non-governmental, non-profit making, member-driven organisation that seeks to promote freedom of expression, media freedom, media diversity, independence and pluralism in Lesotho. MISA endeavours to uplift the standards of journalism in Lesotho and facilitate the economic self-sufficiency of the country’s independent media services. Radio and television services Radio Lesotho, which was established in 1964, produces, among others, talk shows on current affairs as well as educational programmes. Radio Lesotho’s commercial channel, ‘The Ultimate 99.8fm’, was launched in 2006 and targets listeners aged 16 to 45, broadcasting interactive, youthoriented programmes as well as news flashes in English across seven districts. Radio Lesotho has the widest geographic reach, although it does not cover the entire country. There was only one national radio station in Lesotho until 1999, when Government issued licenses for other privatelyowned radio stations. Lesotho currently has three television stations. Lesotho Television (LTV) was established in 1988 with funding from M-Net, the owners of MultiChoice, and handed over to government in 2002. The station covers the whole country with satellite transmission and about 60 percent through terrestrial transmission. Programming covers newscasts in Sesotho and English, sports, current events, music, cultural and children’s shows, including several locally produced programmes. Content is 80 percent Sesotho and 20 percent English, and the development of local broadcasting content is encouraged. Satellite connectivity exists for Radio Lesotho, Ultimate FM and LTV following an agreement entered into with MultiChoice which allows these broadcasters to be accessed countrywide as well as outside Lesotho’s borders on DStv. In addition, South African television networks are available in Lesotho, as are satellite links to other broadcasters. Multi-platform broadcasting television network Kwesé TV network was launched in May 2017.

Lesotho joined 12 other African countries where Kwesé has been launched, comprising Botswana, Ethiopia, Ghana, Kenya, Malawi, Namibia, Nigeria, Rwanda, Swaziland, Tanzania, Uganda and Zambia. The Kwesé bouquet comes standard with over 60 channels, including six free-to-air channels that include news, sports, religious channels, and the Kwesé informative channel. Print media Lesotho’s print media has a long history, with publications like the fortnightly ‘Leselinyana La Lesotho’ (Little Light of Lesotho), which is published by the Lesotho Evangelical Church, and the weekly ‘Moeletsi oa Basotho’, produced by the Roman Catholic Church, both established back in the late 1800s. Today there is a variety of independent newspapers, such as the Lesotho Times, as well as small publications, periodicals and newsletters, in addition to the state-owned newspapers falling under the Lesotho News Agency (LENA). Weekly papers include Lentsoe la Basotho (Voice of Basotho), Sunday Express, Public Eye, Mopheme (The Survivor), Mosotho and Maseru Metro. A number of newspapers may also be found online, including the national news agency, LENA, which appears on the Lesotho government website, and independent news sources such as the Lesotho Times, Public Eye and Informative. Some international publishers, such as Macmillan and Pearson, are represented in Lesotho. Educational materials for local school curricula are also published under Longman and Heinemann, imprints of Pearson. Business Advertising and Marketing Media are one of Lesotho’s main publishing companies, established in 2009. The company produces a variety of products including newspapers, magazines, books and newsletters. Local publishers include Mazenod Printing Works; Morija Sesuto Book Depot; St Michael’s Mission and the Government Printer. Low levels of investment in this sector have negatively affected the growth of the printing and publishing industry, and the majority of printing jobs are undertaken outside Lesotho.

POSTAL SERVICES The Lesotho Post Office (LPO) comprises a network of 47 post offices across Lesotho offering services such as letter mail (local and international), Express Mail Services (EMS) and electronic money transfer. Other products include post box management, parcel post, bulk mail, philately, postal orders, EcoCash (mobile money transfers) and DStv payments. While the LPO has historically operated under the Ministry of Communications, Science and Technology, the Integrated Postal Reform and Development Plan proposed by the Universal Postal Union (UPU) would see it transformed from a state agency into an independent corporation. The LCA has been developing a regulatory framework for the postal sector, based on a market study that was conducted as part of the reform process in this area. The aim is to designate the universal postal service operator and define the basic services subject to universality, with mobile technology presenting a clear opportunity for postal services to be made accessible to all citizens. This involves identifying ‘reserved’ postal services that will not be subject to competition, as well as establishing a framework for the provision of non-reserved postal services – such as express mail, bulk mail and larger package shipping – by private sector participants. In order to open up the sector to competition and increase choices for consumers as well as ensure access to global express mail networks, the LPO is required to provide new entrants with access to its delivery routes and post offices. In the context of meeting specified universal service commitments, the LPO is focusing on developing new convergent services which make use of the internet and e-mail. The LPO and Lesotho PostBank (LPB) are strategic partners, with the post office providing space in its branches which the LPB utilises to serve the unbanked population. There are currently 14 PostBank branches and ten ATMs across the country.

Financial Services

Insurance & Investment

Lesotho’s formal financial sector is dominated by banks and insurance companies, which are complemented by an extensive range of informal financial services. The Ministry of Finance is the financial sector policymaker. Lesotho’s regulatory system hinges on the Central Bank of Lesotho (CBL), which is responsible for regulating banks and non-banking financial institutions (NBFIs), including creditonly and deposit-taking microfinance institutions (MFIs), financial leasing institutions, insurers, money lenders, money transfer operators, the credit bureau and others. NBFIs are supervised and regulated within the Non-Banks Supervision Division (NBSD), which is also charged with implementing projects aimed at building financial infrastructure, fostering financial inclusion and improving access to finance. The primary instrument of regulatory legislation is the Financial Institutions Act (FIA) of 2012, which establishes the CBL as the regulator of banks and a wide range of NBFIs. The Payments Systems Act (2014) enabled the CBL to exercise oversight of the payment systems and provide modernised methods of payment, covering interbank payment systems, clearing houses and securities settlement systems, as well as collateral and netting arrangements. Since its launch in 2006, the Lesotho Wire (LSW) has been the backbone of the payment and settlement system in the country. In 2016, this system continued to process and settle significant

interbank transactions – a total of 23 917 transactions valued at approximately M34.26 billion compared with 27 683 transactions to the tune of M28.06 billion processed and settled in 2015. While this represents a decline in terms of transaction volumes, at the same time transaction values have grown by 22 percent. Three of Lesotho’s commercial banks – Standard Lesotho Bank, Nedbank and First National Bank – are foreign-owned, being subsidiaries of South African banks and serving the formal sector, mainly medium and large corporate enterprises and salaried employees in urban and peri-urban areas. Most bank credit to households takes the form of personal loans related to salaries, but mortgage finance is also growing. The local, state-owned Lesotho PostBank is more development-focused and concentrates its activities in rural areas. Commercial banks are concentrated in the capital city of Maseru, and while the distribution of ATMs is improving, they are mainly found in urban centres and the Lesotho lowlands. Despite the small size of the banking industry, the number of branches has increased significantly, from 44 in 2013 to 76 in 2016. Furthermore, the number of ATMs has risen to 194, while the number of Point of Sale (POS) terminals now stands at 1 339.

Economic and financial cooperation in the region is vital, and Lesotho is actively involved in the activities of various regional and international organisations. This includes, among others, the Common Monetary Area (CMA), along with Namibia, Swaziland and South Africa, and also the Southern African Customs Union (SACU), Southern African Development Community (SADC), International Monetary Fund (IMF) and World Bank. Bilateral and multilateral monetary agreements exist between Lesotho and South Africa. Lesotho’s national currency, the Loti, is fixed at par with the South African Rand, which is also legal tender in Lesotho. Benefits arising from the CMA arrangement include macroeconomic stability and the elimination of exchange rate risk between Lesotho and South Africa. However, it also poses some challenges for Lesotho, particularly with regard to synchronising fiscal and monetary policies. The Central Bank expects financial and insurance activities to register an average growth rate of 6.5 percent over the 2016-2018 period, as it reaps the rewards of ongoing financial sector reforms geared towards improving access to credit and financial inclusion.

FINANCIAL INCLUSION According to the FinMark Trust report ‘Making Access Possible’, financial inclusion in Lesotho is relatively high, largely due to the coverage and operation of the informal sector which is used by 62.4 percent of the adult population. The most common financial service providers include non-bank credit institutions, registered money lenders, NGOs, Savings and Credit Cooperatives (SACCOs), Village Savings and Loan Associations, Rural Savings and Credit Groups, and unregistered money lenders (Machonisas). This high level of inclusion is also driven by very high usage of insurance, primarily funeral insurance (formal as well as informal), which covers 62 percent of adults, with a further 23 percent having another form of formal financial service. As a result, Lesotho’s financial exclusion was just 19.1 percent of adult Basotho at the end of 2016. This figure compares favourably with 27 percent for South Africa, 31 percent in Namibia, and 33 percent for Botswana. However, the report also shows that Lesotho ranks the lowest amongst SACU member state on access to banking services at 38 percent. FINANCIAL SERVICES, INSURANCE & INVESTMENT 79

CENTRAL BANK OF LESOTHO 1. INTRODUCTION

In 2017, the Central Bank of Lesotho pursued its statutory functions of monetary policy implementation, supervision of banks, insurance companies and other financial institutions, capital market development and oversight of the national payment system. In addition, the Bank continued with the implementation of financial sector reforms in line with the Financial Sector Development Strategy (FSDS). The strategy focuses on improving access to finance and financial inclusion in Lesotho. To date, significant progress has been achieved in areas of legal reforms, improving supervisory frameworks, capital markets development and establishment of institutions that support access to credit.

2. MONETARY POLICY IMPLEMENTATION The Central Bank of Lesotho continued with the implementation of monetary policy in the Kingdom of Lesotho, which involves maintaining the peg between the Loti and the Rand. In 2017, the CBL rate was reduced in June to 6.75 per cent. During the year, six meetings of the Monetary Policy Committee (MPC) were convened to consider global and domestic economic conditions, global financial markets conditions that have an underlying influence on the net international reserves (NIR) developments and outlook, and to make the determination on the NIR target floor and the CBL Rate. The Bank also monitored domestic developments and undertook relevant research. On that regard, the Bank published Quarterly Economic Reviews, Macroeconomic Outlook and CBL Research Bulletin.

3. CAPITAL MARKET DEVELOPMENT MASERU SECURITIES MARKET (MSM) Following the launch of Maseru Securities Market (MSM) in January 2016, the Central Bank of Lesotho continued to pursue strategies aimed at operationalizing the facility. The Maseru Securities Market is regulated by the Central Bank of Lesotho as the registrar and the regulator of capital markets. MSM provides an opportunity for companies to raise capital domestically while also creating an investment opportunity for Basotho. During the year, effort was exerted towards improving public awareness about the existence of the facility such that people can take advantage of the investment opportunities. This was done through roadshows and media communication such as radio, television and print media. The Central Bank of Lesotho also engaged with potential corporates and public entities. In 2017, four additional market participants were registered taking the number to six. These new participants are; Old Mutual Lesotho Consulting Services, Matlotlo Group Lesotho, Cadiant Partners Consultants and Actuaries, all of whom are financial advisors. Katleho Securities is licensed as a broker and sponsor for MSM.

GOVERNMENT OF LESOTHO TREASURY BONDS The Central Bank of Lesotho continues to implement the Government of Lesotho

Treasury Bonds Program. Treasury bond issuances are an important marker for maturity of domestic capital markets. To date, there are 7 year and 10 year maturity bonds. The auctions are currently conducted four times a year and the number will increase as the market deepens. In an effort to bolster the bonds market while addressing the infrastructure deficit in the country, the Honourable Minister of Finance has announced that for the fiscal year 2017/18, the Government will require M450 million through Government bonds.

4. BANKING SECTOR A major reform ongoing in the Banking sector is the migration project from Basel I to Basel II. The migration will ensure that the domestic banking sector is supervised on better supervisory framework. In pursuing this objective, four sets of guidelines on Pillars II and III of the accord, namely; Internal Capital Adequacy Assessment Process (ICAAP), Stress Testing, Basic Disclosure Requirements and Corporate Governance guidelines were drafted. A robust consultation process then ensued. The guidelines were issued to the market and consultation workshops held. The guidelines are ready for use during the parallel-run that is planned to take place in 2018. The Central Bank of Lesotho remains committed to ensuring the integrity of the financial system. During the first quarter of 2017, the Central Bank of Lesotho embarked on a joint Anti-Money Laundering/Combating of Financing of Terrorism (AML/CFT) inspection with the South African Reserve Bank on one of the local banks in Lesotho. The purpose of the inspection was to assess the bankâ&#x20AC;&#x2122;s level of compliance with the global anti-money laundering and combating the financing of terrorism (AML/CFT) standards of the Financial Action Task Forceâ&#x20AC;&#x2122;s (FATF) 40 recommendations, and the Basel Committee on Banking Supervision (BCBS) sound management of risks related to money laundering and financing of terrorism guidance. The inspection has enhanced banking supervision staff supervisory skills on AML/CFT issues. Consequently, the bank is busy with the process of drafting a Risk-Based AML/CFT policy framework which will further enhance the Supervision process on AML/CFT by ensuring that a Risk-Based Supervision Approach is adopted in 2018. The Central Bank of Lesotho continues to monitor financial system stability in Lesotho and reports the findings through the quarterly Financial Stability Watch. This report analyses international and domestic developments and trends of the financial soundness indicators (FSIs) and distils implications for financial stability. In addition, in order to enhance its early warning system, the Bank semi-annually conducts Stress Testing on the banking sector to assess the resilience of the sector to both external and internal shocks. In 2017, the Bank has also published the first Financial Stability Report.

5. INSURANCE AND PENSION SECTORS In 2017, the Central Bank of Lesotho has focused on the implementation of the Insurance Regulations of 2016, following their publication. This includes the new licensing requirements, fit and proper requirements as well as revised capital requirements for

the insurance sector. The requirements are meant to strengthen regulation of the sector, which is generally prone to fraud globally. Furthermore, with the assistance of the regional regulatory bodies, the Central Bank of Lesotho has implemented the risk based supervision framework, which is aimed at deploying the supervisory resources efficiently for the optimal regulation of the insurance sector. The Bank shall continue to implement relevant frameworks and instruments to implement best international principles, particular the Insurance Core Principles (ICPs) to which the Bank subscribes as far as insurance supervision is concerned. On the pension sector, the Central Bank of Lesotho has completed drafting the implementing regulations of the Pension Bill. This includes regulations on licensing, disclosure and financial reporting. The regulations are expected to be gazetted after the enactment of the Pension Bill expected early in 2018. Furthermore, supervision frameworks and structures aimed at supporting the implementation of the Pension Bill have also been put in place. The enactment of the Pension Bill is expected to represent a major milestone in the financial sector as pensions can play critical role in fostering economic growth.

6. NON-BANKS FINANCIAL INSTITUTIONS DEVELOPMENT OF THE FINANCIAL LEASING MARKET The Central Bank of Lesotho continued to explore measures aimed at developing the financial leasing market in Lesotho. Following the delivery of the market research of financial leasing in Lesotho in 2016, the Bank has engaged several stakeholders from institutions which were identified as relevant in implementing the proposed incentives and regulatory environment for leasing in Lesotho. These include commercial banks, Lesotho Revenue Authority, the Lesotho National Development Corporation, Lesotho Tourism Development Corporation, Ministry of Small Business Enterprises and Cooperatives, Ministry of Trade and Industry and Ministry of Finance. On the legal side, the Proposed Amendments of the Financial Leasing Regulations are yet to be enacted by Parliament of the Kingdom of Lesotho. Going forward, the Bank looks forward to undertake the investment forums aimed at attracting international leasing firms to deliver leasing finance products in Lesotho. The Bank is also looking forward to overseeing training of microfinance institutions on development of leasing products in the country.

CREDIT INFORMATION BUREAU Following the launch of the Credit Information Bureau in 2016, the Central Bank of Lesotho has begun analyzing credit information. The analysis provides information on trends in the credit market in Lesotho, levels of consumer indebtedness and the usage of credit information system by lenders. Also efforts have been scaled-up to sensitize consumers about the credit bureau. A communications company has been outsourced to undertake public campaigns across several media platforms targeting consumers and lenders. These campaigns are planned to continue in the next year.

The Central Bank of Lesotho continued to ensure that the credit information bureau is in compliance with its regulatory obligations. To date there are about 137 000 individuals and a total of 220 000 accounts in the bureau. The number of active credit providers has not been increasing. At the end of September 2017, the number of credit information enquiries was recorded at 13000 with the bulk of inquiries being by banks.

SECURED TRANSACTIONS REGIME ON MOVABLES AND THE COLLATERAL REGISTRY Efforts are still on-going towards the development of modern secured transactions in movable property law and the establishment of a national public registry for security interests in movables. The main goals of this reform are to: increase access to credit for businesses and consumers by facilitating the use of movable assets as collateral for credit; reduce risks to lenders through increased certainty of repayment; increase the likelihood of loan approval; improve the loan duration and loan-to-value ratios; and reduce interest rates. In 2017 the work in this area included drafting of Secured Transactions Regulations. Also several groups of borrowers including commercial banks, microfinance institutions and money lenders were trained on the use of the electronic registry named Lesotho Registry of Interests in Movable Assets (LeRIMA).

7. NATIONAL PAYMENT SYSTEMS There is continuous effort to strengthen the legal and regulatory framework to achieve safety and efficiency of the National Payment Systems by the Central Bank of Lesotho. In March 2017, the Payment Systems (Issuers of Electronic Payment Instruments) Regulations 2017 were gazetted and published to operationalize the Payment System Act 2014 and to strengthen the mobile money regulation in the country. Consequently, all new and existing issuers of electronic payment instruments are expected to abide by these regulations thus resulting in the promotion of market confidence, protection of investors and management of risks.

MOBILE MONEY The two mobile money systems, M-pesa and Ecocash continued to grow over time. At the end September 2017, M-pesa and Ecocash jointly registered a total of 7175 agents, of which 75 per cent and 52 per cent are 90-days active and 30-days active, respectively. In the same manner, the registered accounts also grew. Mobile money had registered a total of 1,296,489 accounts, 44 per cent and 31 per cent of which are active on a 90-days and 30 days basis, respectively at the end of September 2017. This is a testimony that the mobile money operators (MNOs) continue to make an effort to build a substantial agent network throughout the country. The growth in mobile money in the country is also demonstrated by the growth in trust account balances. The trust account grew on annual basis by 43 per cent by September 2017. In terms of product mix, the MNOs provide a menu of financial services such as customerâ&#x20AC;&#x2122;s deposits and withdrawals, bill payments, domestic money transfers, merchant payments, and cross-border money transfer services and attempts to integrate their systems.

REMITTANCES SERVICES CROSS BORDER REMITTANCE SERVICES As a consequence of the widespread labour migration to South Africa and other

countries, remittances especially from South Africa make up the bulk of inward remittances to Lesotho and these remittances contribute significantly to economic growth and development in the country. For this reason, the Central Bank of Lesotho and the Government of Lesotho in collaboration with implementing entities in the country continuously seek to develop safe and efficient remittance channels. As part of the effort to improve and formalise inbound remittances, Shoprite and Capitec Bank in South Africa (SA)1 with the assistance from the Central Bank of Lesotho and the South African Reserve Bank launched the Shoprite cross-border money transfer remittances facility in March 2015. Since its launch, this remittance facility has experienced remarkable growth in terms of processed transaction volumes and values. Between January and September 2017, this remittance facility processed a total of 211,954 transactions with a total value of about M206.62 million. These transactions volumes and values are testimony of the high take-up of service by large number of Basotho diaspora who work and reside in South Africa (SA). This may be due to its low charges, convenience, safety and reliability as it allows Basotho to send and receive money to and from relatives and/or friends at any nearest Shoprite stores in Lesotho.

DOMESTIC REMITTANCE SERVICES Owing to considerable uptake of inbound cross-border transfer service, Shoprite Lesotho in collaboration with Standard Lesotho Bank (SLB) launched the Shoprite domestic money transfer service in November 2015. Similar to the cross-border counterpart, the transactions volumes and values related to this facility continue to grow. For instance, a total of 408 transactions worth M478, 965 were received through the facility while a total of 406 transactions valued at M498, 571.68 were sent through the same facility between January and September 2017. This indicates that many Basotho people utilise this service for sending and receiving money to and from relatives and/or friends within the country.

8. CONSUMER PROTECTION Consumer protection is critical for financial inclusion. The Central Bank of Lesotho has completed the financial consumer protection diagnostics study with the assistance of the World Bank. This is expected to pave way for the development of a financial consumer protection policy framework and law in Lesotho. The financial consumer protection regime will help the Bank deal with issues in relation to undue collection methods by lenders, serial consumer complaints, abusive lending practices and high prices.

9. CENTRAL BANK MODERNISATION OF SYSTEMS In 2017, the Central Bank of Lesotho launched the Quantum Central Banking Solution which replaced the Integrated Banking System called MIDAS. The new system represented a major development towards the modernization of the Central Bank systems. The system comprises of Core Banking Enterprise Resource Planning Financial System which is used for banking activities and production. The system is expected to put the Bank in the position to deliver better services to its customers by improving valuable internal services that support processes and technologies.

PHYSICAL ADDRESS: Corner Airport and Moshoeshoe Roads, Maseru Central POSTAL ADDRESS: P.O. Box 1184, MASERU, 100, Kingdom of Lesotho Telephones: (+266) 22 31 4281/22 23 2000 Telefaxes: (+266) 22310051/22310679 E-MAIL: cbl@centralbank.org.ls WEBSITE: www.centralbank.org.ls

Financial inclusion and literacy are known to be catalysts for financial education and stability in both developed and developing countries. The objective of enhancing financial inclusion is to reduce vulnerability and increase income in the wider economy, thereby enhancing poverty reduction, employment and growth. Lack of access to credit and savings, and poor payment mechanisms from formal service providers, have been identified as some of the main challenges in Lesotho’s financial sector. World Bank FIRST initiative In an effort to achieve greater national financial inclusion, the CBL has received technical assistance from the World Bank FIRST initiative in addressing issues related to MFIs, SACCOs, mobile financial services, and partial credit guarantee programmes. According to the World Bank, Lesotho lacks adequate regulatory and supervisory frameworks for MFIs. Similarly, SACCOs are highly fragmented and inadequately managed and supervised because the CBL has limited supervisory capacity and no legal foundation for oversight. The legal requirements for banks that use agents are much stricter and more inconsistent than are regulations for mobile network operators that provide mobile money services. Consumer protection is an area of particular concern, especially because Lesotho lacks the appropriate legal framework. In addition, the country’s partial credit guarantee programmes, which are intended to serve small and medium enterprises, have not had sufficient impact because of deficiencies in the programmes’ design, lack of institutional capacity to implement the schemes, and ineffective governance. In order to address these challenges and create a strong regulatory framework for the sector, the spotlight has been on the following five components: • Strengthening legal, regulatory and supervisory frameworks for MFIs and financial cooperatives • Strengthening supervision of other non-bank FINANCIAL SERVICES, INSURANCE & INVESTMENT 82

financial institutions

• Developing an environment that is conducive to mobile money and agency banking

• Developing the framework for financial •

consumer protection and improving financial capability and education Revamping the Government’s partial credit guarantee schemes to improve access of small and medium enterprises to financing

Current developments With lack of access to financing being one of the most limiting constraints faced by the private sector, Government committed in the 2017/18 budget speech to implement the Financial Inclusion Strategy. This seeks to: increase access to financial products and services in the rural areas by bringing access points closer; deepen the usage of financial products across a wide spectrum of instruments; and increase the take-up and effective use of mobile money and digital finance products and services, especially where such products and services are more affordable.

The CBL, with the assistance of the World Bank under the FIRST Initiative, has been reviewing the Deposit Taking and Credit Only MFIs Regulations with the aim of creating an appropriate legal and regulatory framework. In the coming months, Government plans to set up a committee to develop proposals on lending to start-ups and small businesses. This committee will also review the two government partial risk guarantee schemes which have to date fallen short of expectations.

FINANCIAL INITIATIVES & LEGISLATION The Central Bank of Lesotho is undertaking a variety of activities to realise the targets set in its 2015-2019 Strategic Plan. Some of these strategic

objectives include: • Adapting to changing stakeholder needs • Using technology effectively • Engendering a culture of innovation and modernisation • Delivering services effectively and efficiently The Financial Leasing Regulations were enacted into law in 2013. However, no players have yet entered the industry. The CBL is pursuing the development of the leasing market by undertaking market research and reviewing the legal framework with a view to identifying and reducing barriers to entry. The Bank is also implementing a Financial Education and Literacy programme, working in collaboration with major stakeholders in the financial sector. This involves activities such as the Annual Money Month Event which promotes knowledge and understanding among Basotho on financial matters. In September 2017 the CBL launched its new website, which has an enhanced look and feel and makes it easier for clients to access information as well as providing additional opportunities for interaction and communication between the bank and its strategic stakeholders. Mobile money and cross-border transfers In 2016, Shoprite Lesotho in collaboration with Standard Lesotho Bank launched the Shoprite Domestic Money Transfer Service in Lesotho. This was after witnessing the successful launch of Shoprite cross-border Money Transfer Service for inbound remittances in the previous year, and its significant uptake by Basotho working and residing in South Africa. In addition, the transaction volumes and values of mobile money in Lesotho have grown significantly over the years since the service was launched in 2012. In 2016, these systems collectively processed a total of 29.69 million transactions worth about M4.21 billion compared with 16.76 million transactions valued at approximately M1.95 billion in 2015. This represents growth of approximately

77.0 percent in transaction volumes and 116 percent in transaction values. Accessing credit The CBL’s credit bureau project has seen the promulgation of the Data Protection Act (2011) and the Credit Reporting Act (2012), with the Credit Reporting Regulations of 2014 laying the foundation for the establishment of the credit bureau, which commenced operations in August 2014. During 2016 the focus was directed at improving data coverage in the Bureau and building supervisory and regulatory frameworks within the Central Bank. The SADC Credit Information Sharing (CIS) project, initiated and supported by FinMark Trust, also began in 2014. This saw a partnership between the Ministry of Finance as the policy maker and project custodian on the ground, the CBL, the credit bureau and the credit providers themselves, who have been working together to improve the credit information sharing environment in the country. The ease of ‘Getting Credit’ in Lesotho has improved tremendously in the World Bank’s ‘Doing Business’ rankings, rising from 152nd place in 2016 to 82nd in 2017 and 77th in 2018, thanks to the establishment of the country’s first credit bureau and its subsequent expansion in coverage.

MONETARY POLICY Under the CMA arrangement, the CBL is involved in maintaining the peg between the Loti and the Rand. The Monetary Policy Committee (MPC) meets to consider global and domestic economic conditions, global financial market conditions, net international reserves (NIR) developments and outlook in order to determine the NIR target floor (the level of NIR below which the parity of the Loti and the Rand would be compromised) and the CBL Rate.

The introduction of the CBL Rate in December 2015 was the first pillar of the three-pillar monetary policy framework improvement project. The rate, which was introduced at 6.25 percent, is meant to serve as a reference and anchor for domestic interest rates, ensuring that the cost of borrowing is aligned with domestic developments and thus helping the bank to maintain price stability. The second pillar of the project, which entailed development of an active liquidity management model, was completed in 2016. The model uses the autonomous components of the Bank’s balance sheet that influence the liquidity of the banking sector. In-sample tests and dry runs of the model were conducted, and its performance was satisfactory. The model data requirements were finalised and the full roll-out of active liquidity management began in 2017. Monetary and financial indicators Improvements in the inflation outlook during 2016 were in line with the downwards adjustments of South Africa’s inflation outlook, particularly food inflation. The year-on-year consumer inflation rate was registered at 5.4 percent in October 2017. This compares favourably with the 5.6 percent recorded in September 2017 and, according to the CBL, follows the observed trend across the southern African region At the meeting of the Central Bank’s Monetary Policy Committee on 29 November 2017 it was decided to increase the NIR target floor from US $700 million to US $745 million and maintain the CBL rate at 6.75 percent per annum. Interest rates in Lesotho follow the same trend as those in South Africa. The prime lending rate has remained stable and was set at 7 percent in mid2017, in line with that of South Africa, dropping to 6.75 percent in November 2017. The commercial bank prime lending rate averaged 11.7 percent from June to December 2016, while the deposit rate FINANCIAL SERVICES, INSURANCE & INVESTMENT 84

result of a rise in net income across the industry. However, Return of Assets (ROA) remained relatively unchanged. The ratio of net interest margin to gross income was 58.0 percent in 2016 – a marginal decrease compared with 2015. The ratio of non-interest expense to gross income rose from 52.2 percent in 2015 to 54.7 percent 2016. This shows that administration expenses relative to income increased during the year, although this was offset by growth in gross income. The liquidity ratio of commercial banks stood at 72.4 percent in 2016 compared with 82.6 percent in 2015, predominantly caused by a 32.6 percent decline in balances due from banks in South Africa and a 4.8 percent drop in total deposits.

Standard Lesotho Bank Maseru Branch, Kingsway © Standard Lesotho Bank has remained unchanged at 3.5 percent. The large margin between the lending and the deposit rates implies low lending by commercial banks, despite high demand for start-up and working capital. By the end of 2016 the 91 day Treasury Bill rate had increased to 6.58 percent. The position of Lesotho’s external sector improved during the third quarter of 2017, with the current account deficit narrowing to 3.1 percent of GDP from a revised 7.9 percent of GDP in the second quarter. The current account’s performance was influenced by rising exports during the quarter. However, a slowdown in primary and secondary income offset the smaller current account deficit, thereby slightly reducing the official reserves from 4.4 months of import cover realised in June, to 4.3 months in September 2017. Money supply increased by 8.5 percent in September 2017, compared with an increase of 0.7 percent realised in June 2017. The rise in money supply was due to a 13.3 percent surge in domestic claims, coupled with a 4.2 percent increase in net foreign assets. Credit to the private sector grew by 3.8 percent during the third quarter of 2017, up from the 1.3 percent recorded in the second quarter. This follows an improvement in credit extended to households that offset a fall in credit to business enterprises.

By mid-2017, total private sector credit by commercial banks in Lesotho was approximately M5.6 billion, which is about 23.7 percent of GDP. The equivalent in Botswana is 32.3 percent of GDP, while Swaziland is about 21.6 percent of GDP. However, M5.6 billion is not enough to drive private sector growth, and there are viable businesses with strong growth potential which are unable to borrow from banks any further because they are highly leveraged.

In respect of asset quality, Non-Performing Loans (NPLs) management improved during 2016, as the ratio of NPLs to total gross loans declined by 0.3 percentage points to 3.6 percent and the ratio of large exposures to capital decreased by 26.4 percentage points to 124.5 percent. The ratio of liquid assets to short-term liabilities dropped from 63.5 percent in 2015 to 52.4 percent in 2016, while the ratio of liquid assets to total assets declined by 9.0 percentage points from to 31.4 percent recorded in 2015.

BANKING SECTOR

The customer deposit to total (non-interbank) loans ratio is a measure of liquidity that compares the stable deposit base with gross loans, excluding interbank activity. In 2016, the ratio was 149.4 percent, reflecting a drop of 13.9 percentage points from the ratio observed in 2015. This was due to a decline in customer deposits during the year.

The industry’s total assets amounted to M13.2 billion in December 2016, with the sector largely dominated by foreign subsidiaries, which accounted for 97 percent of assets. Four-fifth of total banking sector assets are concentrated in the top two banks. The first half of 2016 saw the industry’s total assets increasing due to growth in financial intermediation, while total assets dropped in the second half of the year due to a decline in balances with South African banks and investment securities. According to the CBL in its 2016 Annual Report, the banking industry remained profitable during the year, with banks utilising their resources efficiently to generate income. Return of Equity (ROE) increased significantly, by 20.67 percentage points to 61.5 percent. The increase in the ratio was as a

The banks’ exposure to foreign risk, measured by the net open position in foreign exchange to capital, increased in 2016 to 42.0 percent against 18.6 percent in 2015 as a result of an increase in assets denominated in foreign currencies. Commercial banks Standard Lesotho Bank is proud to have been in the country for 24 years and still continuing to be the leading financial service provider for many individuals, organisations and the Government

in the investment of more than M3 million in charitable courses and life-changing sponsorships that instil the spirit of hope in Lesotho’s people. This is because, as the largest bank in Lesotho and with a footprint encompassing all ten districts, more than a business the bank also sees itself as a local and community bank that understands the challenges of the people. Standard Lesotho Bank fully appreciates the value of its brand as a leading financial services provider and leverages on this to grow and partner with Basotho as they build their own legacies.

of Lesotho. The bank’s relationship with the Government is founded on a strong heritage that has been largely underpinned by mutual trust and cooperation, with the common goal of providing value for Basotho. Standard Lesotho Bank was born of the merger of Standard Bank and Lesotho Bank (1999) back in 2006, and Standard Bank Group is the majority shareholder, with the Government of Lesotho and Lesotho Unit Trust owning the remaining shares. Standard Lesotho Bank remains committed to driving Lesotho’s economic growth and has mapped a clear strategic focus that puts its clients at the centre of everything it does. Due to the ever changing environment and to demonstrate its commitment to clients, the bank took a transformational journey by upgrading its core banking system in 2017 with the aim of unlocking a great deal of value while moving into the future in order to bring relevant solutions to its clients. It is driven by the vision of being ‘The Preferred and Leading Financial Services Provider in Lesotho’ and has also developed a very clear mission and value proposition to help achieve this vision, supported by the following five strategic pillars: • Client centricity • Enabling technology • Operational excellence • High performance culture • Brand elevation Standard Lesotho Bank prides itself on being not just a bank but a financial partner that continues to change the game of banking to Lesotho’s advantage. It continuously engages clients with the aim of understanding their needs and hearing their voice. With the feedback received, the bank has heeded the clarion call from Basotho to refocus its efforts and add more impetus on developing entrepreneurship, which is widely regarded as a golden key for unlocking the way towards the economic emancipation of every Mosotho. The bank has thus opened another chapter to take entrepreneurship to the next level. Understanding the economy and appreciating the fact that Lesotho’s growth trajectory largely depends on FINANCIAL SERVICES, INSURANCE & INVESTMENT 86

His Majesty King Letsie III with the winner of the Nedbank Mohokare Golf Classic 2017, Ms. Motselisi Ramakoae, the first lady winner ever. With her are previous years’ winners. the pioneering spirit of its own entrepreneurs, the bank has not only partnered with Basotho to make entrepreneurship real, but has also carved out a roadmap that is set to take local businesses to greater heights. During 2017, the bank opened its doors to the new Enterprise Banking facility, situated at Maseru Mall. Bigger and better, the facility also accommodates an ever increasing number of entrepreneurs, who visit the bank for an array of financial services as well as expert advice from a team of seasoned business bankers who are dependable and reliable. Enterprise Banking features Enterprise Direct, which provides Business Banking via the telephone or email. Enterprise Banking is all about convenience, and its operating model is premised on the understanding that time is a valuable commodity in the world of entrepreneurship. Instead of spending time at the bank, entrepreneurs are now able to spend more time on their shop floors or closing deals, whilst their day-today financial services are handled by banking professionals over the phone or via email. Housed within Enterprise Banking there is another innovation aptly called the Enterprise Hub, which provides the requisite resources for budding

entrepreneurs in order to help them realise their dreams. It is a meeting venue, a research hub and a networking area, fully equipped with workstations that have free internet and WiFi. The Enterprise Hub is there to bridge the gap for start-up businesses and new ventures that do not have office facilities and meeting rooms. When it comes to changing the game in the lives of unemployed youth, the bank continues to grow the Bacha Entrepreneurship Project, which is undertaken in collaboration with BEDCO and the Lesotho Revenue Authority (LRA). The project targets unemployed graduates with the aim of transforming them into entrepreneurs that can bring value to Lesotho’s economy and employ other youths. Now in its third year of operation, the project has so far established about nine youth companies that have shared around M1.5 million to invest in their new business ventures which are currently in operation. These are just glimpses of the many game changing initiatives that demonstrate Standard Lesotho Bank’s commitment to the entrepreneurial drive that is needed to grow Lesotho’s economy and improve the welfare of its citizens. The bank is prepared to invest handsomely in developing entrepreneurship going into the future. This commitment is demonstrated

Nedbank Lesotho officially marked a rich 20-year history in Lesotho in January 2017. As part of this history, Nedbank Lesotho has been a pioneer in the market with some of these ‘firsts’: • First bank to launch Internet Banking in Lesotho • First and only bank to offer a managed local credit card • First bank to launch the first low-cost EMV and PCI – certified fully mobile point-of-sale (POS) solutions designed for business (i.e. Nedbank PocketPOS™) • First and only bank to offer Cash Online solution for corporate clients • Financed the first mall in Lesotho, namely the Pioneer Mall, as part of its pioneering retail property developments • First bank to introduce Sunday opening times through the Pioneer Mall branch • Corporate sponsor of the first local golf tournament in Lesotho, the annual Nedbank Mohokare Golf Classic Nedbank continues to strengthen its innovation drive to cater for clients’ specific needs through a variety of banking and financial solutions. It offers a range of personal, SME, business and corporate banking and financial services, including: transactional and current accounts; electronic and mobile banking; private banking; savings and investments; and short-term and long term finance such as overdrafts, personal loans, vehicle finance, home loans and business loans.

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EMAIL: business@yourfd.co.ls | WEB: www.yourfd.co.ls P.O. Box 1144 Maseru 100 FINANCIAL SERVICES, INSURANCE & INVESTMENT 88

The bank’s specialised expertise in business and property finance allows it to be a partner to business and corporate clients and offer specialised financial advice, which results in business growth and success. For corporates, the bank also offers unique solutions in trade finance, money market, foreign exchange trade and sales, and funding. For servicing of SMEs, Nedbank holds the pioneering position of being the first bank to create a full SME unit, which still operates today from Maseru branches and the Northern and Southern regions to meet the unique needs of local enterprises. In its bid to continue to bring better value banking, Nedbank Lesotho has significantly expanded its offerings and simplified banking for its clients, with innovations that also bring more convenient electronic and self-service banking channels, including the new Nedbank Mobile Banking App, as well as a wide network of ATMs, POS terminals at key retailers, strategically located branches, and unique Sunday banking services at Pioneer Mall for more convenient around-theclock banking. The large investment in the bank’s new core banking system has enabled Nedbank to expand its product and services portfolio for the local market, and offer improved value propositions to existing and prospective clients. This has facilitated simplified and transparent pricing with the implementation of real-time billing on transactions, thereby helping to improve clients’ banking and financial management; new bundled products and value adds for entry level, middle income and working professionals, and private banking clients; as well as new mobile banking with value added services, including airtime and electricity purchases. The bank’s upgraded electronic banking service allows registered clients to transfer funds and make payments, get electronic account statements (e-statements) and do LRA tax payments with convenience and security, anywhere at any time. This enhancement has been further expanded to corporate and business clients to enable efficient

business account management. Nedbank remains the only bank that offers a local credit card for personal, business and corporate clients. Nedbank Lesotho’s philosophy is to be a ‘green and caring’ bank, using their financial expertise to do good for staff, clients, shareholders, regulators, and for the local communities in which they operate. The various contributions to this aspiration include: •

•

A phantom share scheme (Seshoai) for Nedbank Lesotho staff to create a constructive workplace and empower staff members to become and deliver their best. Key corporate social investment (CSI) initiatives and sponsorships that include – the Royal Education Development Fund, Queens’ National Trust Fund, Hlokomela Banana ‘Care for Girls’ Project, youth and career days for high school and tertiary students, the annual Menkhoaneng Moshoeshoe Walk, the annual Nedbank Mohokare Golf Classic, support to the Red Cross and Rotary International in Lesotho, and initiatives by other corporate partners. Nedbank has embedded efforts that go towards the development of education, promotion and protection of heritage, the arts, sports development, entrepreneurship, and improved health delivery and social development projects for key beneficiaries and target groups.

First National Bank of Lesotho (FNBL) has an array of digital banking platforms – FNB Banking App, FNB Online, eWallet and Cellphone banking platforms, as well as cross-border payments which enable real time transacting 24/7 – all adding convenience, time-saving and effectiveness. While increasing FNB Lesotho’s footprint beyond branch banking, the bank’s strategy remains to heighten the use of innovation and technology by being available, visible and locally relevant. FNB Lesotho is available via branches in Maseru, Mafeteng, Teyateyaneng (TY), Hlotse, Maputsoe,

The inaugural Alliance Sports Media Awards, the first of its kind in Lesotho, was held at Thaba Bosiu Cultural village on 4th November 2017. The reason Alliance embarked on this project was due to our deep involvement in sporting activities, as well as a need to acknowledge the men and women who work tirelessly throughout the year to give us sports updates and news. It is a well-known fact that sports play a very important role in bringing people together, fostering friendly rivalry. Thus Alliance, in collaboration with Lesotho Sports Reporters Association, are proud of our reporterâ&#x20AC;&#x2122;s efforts from across the various media. Congratulations to the winners!

Our MCs with TV sports presenter of the year Mr Tsebeletso John Tumahole

Mr. Relebohile Makosholo receiving an award from Mr. Brown

Best Radio Presenter Mr Chalale Mokhethi

Mrs Popi Kaiser handing over a Life Time Award to veteran sports commentator, Mr. Motlatsi Ncholu

Best Sports Reporter Mr Moorosi Tsiane

Ms Senate Seetsa handing an award to Mr Tseliso Tale

Mr Mohapinyane Taole and Ms Liepollo Tsekoa from Alliance Insurance

Some of our winners from LNBS

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Botha-Bothe and Mokhotlong. It also has ATMs countrywide to support its digital strategy to bring banking solutions closer to communities. FNBL continues to expand the availability of fully functional ATMs throughout Lesotho, along with the new Slimline Mini ATMs which can be placed at retail merchants across the country. Its latest offerings are an ATM with cash deposit-taking technology, and the Cash Deposita: an interactive safe that enables businesses to safely make deposits which automatically reflect in their bank accounts without the need to travel to FNB. The different FNBL personal bank accounts encompass a broader product offering, from the future-forward account for the toddler to the Private Wealth account for the elite. Beyond the strong Retail Banking offerings, FNBL offers Home Loans, Premier Banking Suite, Business Banking Suite, as well as Corporate and Investment Banking based at Pioneer Mall, Maseru. Vehicle and Asset Finance is another major offering. WesBank, which is well known for financing machinery ranging from farming to office equipment, also has the knowhow to finance anything with a serial number, thus enabling businesses to run and operate without hindrances. The Lesotho PostBank (LPB) was incorporated in 2014, is 100 percent owned by the Lesotho Government and prides itself on being an indigenous bank managed wholly by Basotho. It was founded to provide banking services to underbanked and unbanked Basotho in both rural and urban areas, and remains committed to its mandate of answering the challenge of financial exclusion in the country. It is licensed by the Central Bank of Lesotho and commenced operations by offering mainly savings products. In 2010, it diversified into lending; in 2012 electronic transacting services were introduced, and by 2014 it had started to be profitable. To date, the PostBank has rolled out 14 branches and 10 ATMs, and utilised both bookbased and card modes for transacting.

Since beginning operations, LPB has attracted a substantial diverse client base, and has segmented products to meet those distinct portfolios. Other services include mobile top-up and local and regional money transfers, to mention but a few. In 2017, LPB took a giant leap in fulfilling its mission to provide modern banking services to its customers at affordable rates by upgrading its core banking system. The upgrade commenced in September 2016 and was launched in May 2017. The upgraded system will enable the bank to offer improved and new products, SMS notifications and security features to give the customer peace of mind and more. Due to the upgraded system, the bank will introduce other banking platforms such as Europay MasterCard and Visa (EMV), Internet and Mobile Banking as well as Agency Banking. These platforms will enable LPB to provide its existing and potential customers with advanced and diverse banking capabilities.

THE INSURANCE INDUSTRY The insurance sector in Lesotho is small but growing rapidly. Its penetration is relatively high and substantially above the African average (excluding South Africa). This is mainly because of the popularity of funeral policies, with funeral insurance a major financial inclusion driver. Although the industry is expanding compared with the rest of the economy, its regulatory framework and supervision are still weak and have some gaps. The insurance industry deals with both longterm and short-term insurance, and is the mostconsumed financial service in Lesotho for nearly all target groups, contributing significantly to financial inclusion. Around 62 percent of the adult population has some form of insurance. Usage is significantly higher in urban areas, where formal penetration is 48.1 percent as compared with 31.8 percent in rural areas. In turn, informal-only is

much higher in the rural areas (30 percent) than for urban dwellers (11.4 percent). Total assets of the general insurance business in Lesotho were approaching M500 million by the second quarter of 2017 from just under M400 million in the corresponding quarter of 2016. The Insurance Act of 2014 provides for the consolidation, administration, supervision, regulation, protection and development of the insurance business in Lesotho. It was developed with the aim of meeting the demands of the economy for risk-management and stimulation of growth in the investment sector. It also tackled the development of the micro-insurance subsector to improve upon the previous Insurance Act (1976) which was marked by excessive rigidities. An applicable regulatory framework was drawn up to promote participation and new entrants, as well as facilitate supervision. One of the CBL’s areas of focus in 2016 was the reform of insurance sector regulations, and the Bank began a review of the Insurance Act of 2014. A central feature of this review process is to strengthen the governance framework for insurance companies and help to accommodate risk-based supervision. Amendments will be made in the areas of: corporate governance; solvency; risk management; consumer protection; inclusion of annuities as a class of long-term insurance and micro-insurance; and the introduction of a crisis management regime. In order to support the current regulatory regime, seven sets of Insurance Regulations were published in 2016. These include, among others, regulations on solvency, and financial reporting good practice for insurers and intermediaries. Metropolitan is the leading provider of life insurance and healthcare solutions in Lesotho, and has over 50 years of experience in providing Basotho with affordable and innovative insurance cover and investment solutions. A subsidiary

company of MMI Holdings Limited, which is listed on the Johannesburg Stock Exchange and boasts more than a century of life assurance experience, Metropolitan Lesotho represents a consolidation of the previous business operations of Metropolitan Life in the Kingdom of Lesotho. A keen contributor to the social and economic development of Lesotho, Metropolitan is a socially responsible citizen helping Basotho improve their lives and the lives of future generations. Its client base is as diverse as the colourful people of this beautiful country, and Metropolitan is proud to be the primary provider of life and health insurance to the following sectors: teaching, essential and protection services, the mining industry, the civil service, construction and agriculture. Metropolitan believes financial literacy and the right advice is key when it comes to making decisions about money, and it strives to service customers with a suite of innovative, appropriate and affordable financial solutions. Whether clients are buying their first home, saving for their child’s education, planning their retirement or needing funeral cover for a loved one, Metropolitan has a financial solution to meet their unique needs. A team of dedicated representatives is committed to guiding clients in understanding each aspect and benefit of their policy, as well as finding the best solution to suit their pocket. Alliance Insurance Company takes pride in operating in the remarkable country of Lesotho. Alliance opened its doors in 1993, operating out of a small two-roomed rented office, and from these humble beginnings has grown to be the company of note it is today. With branches in all ten districts of Lesotho, as well as other satellite branches in busy areas such as Maputsoe, Kingsway Thola-Tu and Pioneer mall, Alliance can boast about being the most accessible insurance company in Lesotho. In addition to its accessibility, Alliance has over the years increased the services provided to clients, making it a one-stop-shop for most of its customers’ insurance needs. Alliance is committed

Our business is about creating value for our clients by guiding them towards quality and affordable insurance. While the company’s products focus is on the general insurance, our competitive edge is in service delivery to the network of independent brokers. Intermediaries are supported by a decentralized system with flat hierarchy, quick decisionmaking and underwriters with strong technical skills and business acumen. SIC does not operate any call centres – intermediary and policy holder relationships have a strong personal component with face-to-face contact.

WHAT WE OFFER • Our Corporate Property insurance offering caters for the specific cover requirements of clients with major assets values. • We cover large industrial and commercial risks, including parastatals, multi-national corporations and mining operations.

WE PROMISE TO: • Deliver personal service with a partnership approach • Quick time to market • Provide innovative products with a flexible approach to finding solutions • Provide deep expertise and relevant products that address specific clients’ needs at reasonable costs.

We provide flexible methods of payments, WE ACCEPT monthly premium payment.

Focused on unique expertise and technical excellence to make a difference! Tel: +266 223 20837/8 Email: bokangn@sic.co.ls Shop 51 Racecourse Mall, Maseru

FINANCIAL SERVICES, INSURANCE & INVESTMENT 93

to creating and unlocking wealth for its clients, as well as giving them peace of mind in knowing that their hard earned money is in good hands. The company’s extensive range of innovative products is further proof that time has been taken in studying the market to ensure that a variety of needs is catered for. Furthermore, Alliance has invested in Lesotho’s infrastructural development, with buildings that have contributed towards making Maseru into an attractive business district with the requisite facilities needed by the private sector, parastatals, NGOs and other institutions. Lately the company has branched out to leave its footprint in other districts as well, opening the Ha Makhakhe Shopping Centre in Mokhotlong, which is the first of its kind in the district. This brings long awaited services to the people of this district that was once considered too remote. Job creation goes hand in hand with this kind of development, and hundreds of Basotho in Mokhotlong have benefited directly, either during the building process or through attaining more permanent jobs when the facility became operational. The next project on Alliance’s agenda is the construction of Mohale’s Hoek Shopping Centre. The inaugural Alliance Sports Media Awards, the first of its kind in Lesotho, was held at Thaba Bosiu Cultural village on 4 November 2017, with the support of Alliance in collaboration with the Lesotho Sports Reporters’ Association. Alliance is intensely involved in sporting activities, and recognises the importance of acknowledging the men and women who work to deliver sports updates and news. In addition, Alliance believes that sport plays a very important role in bringing people together, and thus has a vital role to play in Lesotho’s future. Thaba-Bosiu Risk Solutions (Pty) Ltd is one of the leading insurance brokers in Lesotho. The company has 100 percent local shareholding. FINANCIAL SERVICES, INSURANCE & INVESTMENT 94

Established in April 2006, it offers a wide array of insurance products that are tailor-made to meet clients’ needs. Some of the products the company offers include motor vehicle insurance, accident insurance, construction insurance, travel insurance, workmen’s insurance, professional indemnity schemes and goods in transit insurance. The company also offers group funeral schemes, retirement (pension and provident fund) schemes, group schemes (death and disability) as well as students’ medical aid. In its mission statement, Thaba-Bosiu Risk Solutions (Pty) Ltd says it seeks to provide clients with superb coverage and claims handling through careful and diligent underwriting of risks and the provision of business-friendly solutions. The company’s excellent reputation in the market has not gone unnoticed, and it has over the last 11 years been the recipient of several awards for excellence. The company was awarded first prize in the PMR Awards that seek to reward excellence in the insurance broking sector in Lesotho, for the years 2012, 2013, 2014, 2015 and 2016. Yet it is Thaba-Bosiu Risk Solutions (Pty) Ltd’s ambitious programme to give back to the community that has set it apart from its peers. Since 2012, the company’s managing director, Matokelo Seturumane, has spearheaded a programme to give back to the community, and two rural schools in Leribe District – Boribeng Primary and Boribeng High School – have been adopted. Every September, the company gives out prizes to outstanding students, with the top student being awarded the coveted ‘white blazer’. It also gives out school shoes and food parcels to vulnerable students. Seturumane, who grew up in Boribeng about 120 kilometres north of Maseru, says the idea is to motivate the students who come from very poor backgrounds to dream beyond their rural upbringing. For decades, children who were raised in Boribeng had very limited choices – they

would either get married in their mid-teens, go to initiation school or make the long trip to work in the gold mines in South Africa. It was very rare for students, particularly girls, to break through these barriers. While much has changed in terms of infrastructure in Boribeng over the decades, the problem of girls getting married at a young age remains. Girls, some as young as 15, are still dropping out of school to get married, to the dismay of educationists and community leaders. To counter this negative trend, in April 2017 Thaba-Bosiu Risk Solutions (Pty) Ltd launched the ‘She Heroes’ movement, a programme that seeks to discourage young girls from getting married at an early age. Every two weeks, the company’s female staff meets with girls at the school to see how best they can help them. The idea behind the She Heroes movement is to inspire young girls to become tomorrow’s leaders, snub early marriages and pursue non-traditional careers. As part of its programmes, the company invites successful women in the business sector who are seen as role models to speak to the girls in an effort to persuade them to change tack. It is a programme that is slowly having a profound impact in shaping the thinking of female students who remain vulnerable to social pressures to get married when they are in their teens. Seturumane says their mission is to change society, one child at a time. It is a battle that Thaba-Bosiu Risk Solutions (Pty) Ltd says it is determined to win. For instance, in early September 2017, the company in partnership with Beautiful Dreams Society (BDS), managed to ‘rescue’ a girl who had been forced into an early marriage. At the time of writing, the girl was at a BDS shelter where she was receiving counselling before being placed back in school. The company’s phenomenal growth over the last 11 years can be attributed to its strong leadership, dedicated staff and excellent customer service. Liberty Life Lesotho is a specialist life insurance

company that provides group and individual risk insurance solutions and comprehensive health cover, offering an extensive range of products and services to help Basotho build and protect longterm wealth. The company puts the customer’s needs first by creating solutions that are simple, affordable, relevant, flexible, easily accessible and innovative, and has experience in working with and understanding the needs of customers and partners – whether individuals, small businesses, corporates or affinity groups with many members. Liberty Life Lesotho also partners with employers to enhance the lives of their most valuable assets: their employees. They believe that in times of unfortunate events, the last thing customers should worry about is finances. Liberty Life Lesotho is a subsidiary of Liberty Holdings, founded 60 years ago by Sir Donald Gordon, who watched his father work hard all his life yet reap little financial reward for his efforts. This struggle ignited in him the overwhelming belief that all people should have the opportunity to grow their wealth and leave a proud legacy for their family. This belief is captured in the company’s name and its flame, taken from the Statue of Liberty and imbued with the same meaning of freedom and opportunity. Liberty has a presence in more than 18 African countries, offering asset management, investment, long and short-term insurance and health products to millions of people across the continent. It is also one of the biggest listed longterm insurers on the Johannesburg Stock Exchange by market capitalisation. Liberty is an organisation that understands the value of knowledge and its power to change realities. This is why it has invested over M480 million in supporting various educational initiatives and projects. Liberty continues to roll up its sleeves and work with Government, the Regulator and other stakeholders to further develop the insurance industry and contribute significantly to the growth of the economy. The company believes that through financial education and guidance, this can be achieved. Through understanding the power of

We offer products which are tailor-made to our clients` requirements. Our professional staff will give you sound insurance advice, and will structure a package that suits your specific needs. DOMESTIC INSURANCE: Our personal lines insurance division offers quality short-term insurance covers. Types of covers include the following: • • • • Helping the vulnerable children of Touching Tiny Lives meet their basic needs

Householders – (House contents) Houseowners – (Buildings) All Risks – (Jewellery, Cameras, Laptops etc) Motor Vehicles (Comprehensive, Balance of Third Party, Third Party, Fire & Theft) • Personal Accident • Travel Our rates are particularly attractive to those who have invested in security features for their homes and motor vehicles.

OTHER SERVICES: • Claims Management • Risk Management

AGRICULTURE: Our aim is to put smiles on customers’ faces.

• Livestock

CORPORATE & COMMERCIAL: We look after interests of all types and sizes of businesses from the small ones “home office” right up to large corporates. • • • • • • • • • • •

Fire & Allied Perils Assests All Risks Liability Goods in Transit Accident Insurance Construction Insurance Engineering Insurance Travel Insurance Motor Vehicles Professional Indemnity Workmen’s Compensation

LIFE ASSURANCE / EMPLOYEE BENEFITS: • • • •

Retirement (Pension & Provident Fund) Group Schemes (Death & Disability) Group Funeral Schemes Students Medical Aid

Annual Boribeng Primary and High school Awards Ceremony.

TRUST US FOR ALL YOUR INSURANCE NEEDS AND RISK MANAGEMENT ADVICE Tel: (+266) 22 313 018/52 500 404/5 • Fax: (+266) 22 310 513 Email: info@thaba-bosiu.co.ls • Website: www.thaba-bosiu.co.ls 1st Floor Options Building, Pioneer Road • P/Bag A244, Maseru 100

knowledge, Liberty strives to pioneer new ways to guide people towards financial freedom, with a purpose – and passion – to make a difference in people’s lives.

CONTRACTUAL SAVINGS Lesotho currently has over M10 billion in contractual savings; that is, in collective investment schemes, pension and provident funds, insurance companies, and medical aid schemes. With the introduction of new regulations, a large portion of these funds are expected to be invested in local instruments, with the Central Bank having created demand for securities that needs to be met with the supply of securities. As such, companies from different sectors can issue medium to long-term financial securities to finance their activities. The pension sector Lesotho’s pension sector is relatively small and underdeveloped. There is a major divergence between coverage in the public (government/ parastatal) sector, where it is very high, and the private sector, where is quite low. However, many companies simply enrol employees in the pension funds of their South African parent company, and the extent to which this takes place is unknown. The main pension fund in Lesotho is the Public Officers’ Defined Contribution Pension Fund (PODCPF), which was established in 2008 and has its own Act. The PODCPF is a contributory, defined pension fund, covering most government employees, with both employer and employee contributions. At present, there is no legislation in place that deals with the establishment and regulation of private pension funds; the only relevant legislation is the Act establishing the PODCPF and elements of the Income Tax Act. There is a need to develop an overall policy framework for the pension sector in Lesotho to specify the roles of public (statutory) and private pension schemes. Moreover, pension fund members FINANCIAL SERVICES, INSURANCE & INVESTMENT 98

Insurance Company Limited

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INSURANCE THAT WORKS FOR YOU * Motor Insurance * House & Home Insurance * Construction & Construction Bonds * Commercial Property & Business Insurance

are vulnerable to fraud and mismanagement because there is no regulation of occupational and private pension funds. The Insurance and Pension Regulation and Supervision Project, which is a World Bank FIRST initiative, has been working to strengthen the legal, regulatory and supervisory frameworks of Lesotho’s private pensions schemes, among others. Government has, with the assistance of the ILO, proposed the establishment of a national statutory contributory pension scheme as part of broader social security reforms. This is particularly aimed at employees of the many textile and garment firms in Lesotho. In principle, all those in formal employment would be compelled to join the new scheme. The Ministry of Finance, in collaboration with the World Bank and other stakeholders, has drafted the new Pensions Bill. When it becomes law, the bill

will regulate the pensions industry and broaden the mandate of the CBL by making it the regulator of Pension Funds in order to deal with regulatory gaps in the subsector. The envisaged scope of application covers both occupational and non-occupational pension funds. The law is intended to: • Ensure protection of the rights and interests of members of pension funds by imposing certain obligations on those who manage pension funds • Ensure that pension funds are properly governed in line with modern principles of governance, with particular reference to reporting requirements, risk management and investment of pension monies • Provide for the segregation and definition of duties and responsibilities of key players in the pension industry, such as administrators, asset managers and custodians

Pension and insurance reform Outcomes expected in long term from the World Bank FIRST initiative include: expanding risk coverage and long-term savings provided by insurance products, securing and sustaining a pension system that includes an increase in the coverage of private pensions, and mobilising longterm savings for the productive investment and development of the capital market.

MONEY & CAPITAL MARKETS Cultivating money and capital markets has been a financial sector priority for more than two decades, with phased development being implemented. The first phase, introduced in 2008, focused on developing money markets (Treasury bills) by increasing the frequency of auctions and the number of tenors. This was followed by the introduction of Government bonds in 2010, with the objective of cultivating domestic sources of financing as a means of reducing the country’s vulnerability to external sources and financing the budget deficit. Traditionally, when the market for Government securities flourishes, it magnifies the ability of the corporate securities market to prosper. Following the successful implementation of a Treasury securities market, the CBL embarked on yet another important phase in its efforts to develop domestic capital markets – the drive to establish an organised market for trading stocks. This saw the establishment of an Over-the-Counter (OTC) market, which is a market where stocks which are said not to meet the listing requirements of the major exchanges are traded. This provided private enterprises with a platform to make public offerings of their shares to raise capital for their business needs in a more organised and regulated manner. Maseru Securities Market Launched in January 2016, the Maseru Securities Market (MSM) was set up to further the development of equities and the corporate bonds market while also addressing the illiquidity problem

of Government securities. The MSM establishes a central location for Basotho to buy and sell local companies’ stocks and bonds, and for trading in the secondary market, thus providing companies that participate in the stock exchange with alternative sources of capital and the public with diversified investment opportunities. Operating in line with international best practices, the MSM is expected to benefit the economy through facilitating the mobilisation and efficient allocation of capital to finance investment. The establishment of the securities market is governed by the Central Bank of Lesotho Act of 2000, Section 6 (i) and (j), which mandates the CBL to promote the development of a safe and sound financial system as well as to monitor and regulate the capital market. It is supported by the Capital Markets Regulations (2014), which provides for the orderly, secure, fair and transparent operation of the MSM. The exchange is currently operated by the Central Bank, but preparations are being made to have it stand on its own. Government’s efforts to develop the capital market have proven quite successful, and in the 2017/18 budget speech, the Minister of Finance proposed that an additional M450 million be raised through bonds.

To make companies realise the value of the securities market, the CBL continues to raise awareness among business decision makers regarding the merits of capital markets as a source of long term capital to finance growth and expand businesses, either by issuing debt or equity securities. The stock market is expected to benefit the economy in a number of ways, including: • Provision of Capital – Stock markets facilitate the raising of capital for companies through the issuance of new stock (selling shares) or by borrowing through bonds and other debt instruments. Thus the MSM’s role is to provide much needed financing for investment

•

within the country. It will also provide an alternative avenue to raise funds for investment instead of depending only on borrowing from commercial banks. This will remove the bottleneck to investment which emanates from the fact that the banks are generally risk averse. Increased Savings – Domestic savings are expected to increase as the securities market provides opportunities and profitable options for people to invest in and increase their savings. It provides incentives to defer consumption in favour of investment. If efficient, capital markets also enable savings to be allocated to investment projects with higher returns. As the rate of return to savers increases, savings become more attractive. This encourages the growth of overall savings and investment within the economy. Efficient allocation of capital – Investing in the stock market leads to a more rational allocation of resources. Funds which could have been consumed or kept as idle deposits with banks could be mobilised and redirected to finance business activity in the more productive and profitable sectors of the economy. Provision of liquidity – The MSM provides a ready market for the sale and purchase of securities. This gives assurance to investors that their investment could be converted into cash at any time if needed. Improved corporate governance – Capital market development necessitates the creation of a legal and regulatory framework incorporating increased transparency and information dissemination. These monitoring systems reinforce corporate governance practices, improve transparency and enhance investor confidence. Industry-level data from various studies has shown a positive relationship between market-based governance and improvements in industry efficiency. Economic growth – The MSM aims to accelerate economic growth by providing a boost to domestic savings and increasing the quantity and the quality of investment. In

particular, it can encourage economic growth by providing an avenue for new and growing companies to raise capital at a lower cost.

TAXATION The Lesotho Revenue Authority (LRA) was established in 2003 to enhance the efficiency and effectiveness of revenue collection and to provide an improved tax service to the public. Huge improvements have subsequently taken place in revenue collection as well as in raising voluntary compliance among taxpayers and creating a fair and equitable environment. Milestones achieved by the LRA in the past decade include the introduction of Value Added Tax (VAT) at 14 percent, which has been instrumental in broadening the tax base, as well as the establishment of the self-assessment system. The LRA’s Strategic Plan for the 2014-2019 period focuses on the urgent need to provide the funding required to develop the economy while minimising the cost of compliance to the client and the cost of collecting that revenue. The plan builds on the solid foundation established in 2007 when the authority began to emphasise ‘taxpayer-centricity’. In implementing its strategic plan, the LRA has set out to address medium and long-term issues through specific action programmes. In the medium term, this will see the modernisation of the LRA’s processes and systems. In line with its Customs Modernisation Programme, the authority is redesigning and automating customs procedures through the implementation of the Asycuda customs border control system. Another area is the automation of tax processes through the Oracle Tax system. Long-term objectives include working to ensure that relevant policies and legislation are updated in line with changing times, the development and implementation of an integrated border management strategy, as well as the development of a strategy for new markets and for the informal sector, among others.

The LRA intends introducing an electronic taxfiling system during 2017/18 in order to make the process easier for taxpayers.

Tax rates As a means of improving Lesotho’s competitiveness in the region, the company tax rate was reduced from 35 to 25 percent in 2006, while the preferential tax rate of 15 percent enjoyed by manufacturing and farming was lowered to 10 percent. To promote textile manufacturing, Government introduced a zero tax rate on proceeds from exports destined outside SACU in 2006/07. This tax exemption was abolished in 2014/15 and replaced with the standard 10 percent rate as it was felt to be inconsistent with Lesotho’s commitment under international and regional agreements. Over the years, Lesotho’s effective tax rate on personal incomes has remained one of the highest in Sub-Saharan Africa. To reduce the tax burden and encourage tax compliance, the 2014/15 budget reduced both the lower and upper personal income tax rates, from 22 to 20 percent and 35 to 30 percent, respectively. This is applicable for resident individuals, sole traders and employees under the pay-as-you-earn (PAYE) system. Best practice as regards VAT dictates that a single rate be used to avoid distortions, ensure tax efficiency and reduce administration and compliance costs. As a result, Lesotho’s four VAT rates have been simplified. All items, with the exception of the zero-rated items, electricity and telecommunications, are taxed at the standard rate of 14 percent. At the same time, an additional levy of 4 percent has been added to alcohol and tobacco products to curb abuse of these substances. Technical assistance from the World Bank will support Government in fostering and implementing tobacco and alcohol tax reforms to reduce their affordability and consumption, as well as to control illicit trade on these items. FINANCIAL SERVICES, INSURANCE & INVESTMENT 99

Healthcare

The Lesotho Government is committed to ensuring a healthy nation through immunisation campaigns, health education, the fight against both communicable and non-communicable diseases, and the development of human resources.

The health and social work subsector was estimated to have registered a high growth rate of 8.6 percent in 2016 compared with growth of 8.9 percent in 2015. Its robust performance was driven by health initiatives funded by the Millennium Challenge Corporation (MCC), resulting in improved access to health facilities for rural populations in remote areas. Projects focused on building and renovating clinics and bringing health facilities closer to the rural areas. The Queen ‘Mamohato Memorial Hospital, which was opened in 2011, currently serves as both a national referral and district hospital, while the old Queen Elizabeth II Hospital has been partially reopened for limited health services. The capacity of satellite filter clinics in Maseru and surrounding areas has been dramatically improved in recent years, effectively reducing pressure on the national referral hospital. Despite improving infrastructure, the lack of adequately qualified healthcare professionals continues to challenge the sector, exacerbated by Lesotho’s topography and the isolation of many rural areas where the majority of the population resides. This represents a significant access barrier to both healthcare personnel and patients. Retaining health workers in the remote parts of the country is also problematic, and primary healthcare services in these locations experience chronic shortages of medical and allied health professionals. HEALTHCARE 100

Health sector investment Lesotho’s Government allocates over 10 percent of public resources to the health sector. This is one of the highest contributions in Sub-Saharan Africa, although still below the Abuja agreement of 14 percent. The investment equates to 9 percent of Gross Domestic Product (GDP), with a per capita expenditure of US $54 which is well above the World Health Organisation (WHO) recommended minimum of US $34. However, Lesotho’s health outcomes have not been commensurate with the resource input. The proposed 2017/18 budget amounted to M2.5 billion. Lesotho is implementing the Test and Treat guidelines which recommend that Anti-Retroviral Treatment (ART) be administered to all persons who test positive for HIV as soon as possible after diagnosis, irrespective of their clinical stage. The MoH is also implementing the Lesotho Population Based HIV Impact Assessment nationwide to generate data on HIV and AIDS across the entire population. The survey will enable better understanding of the impact of HIV in the country. In 2016 Lesotho adopted, and is presently implementing, the WHO’s ‘Test and Treat’ guidelines on treating every person testing positive for HIV, regardless of their CD4 count.

Beyond HIV and AIDS, the cancer epidemic needs to be addressed urgently. The cost of cancer referrals to the Republic of South Africa for radiotherapy is skyrocketing. To promote cost-cutting and the sustainability of treatment, Government is considering building a Cancer Treatment Centre (CTC) in the next fiscal year. Furthermore, the Government of Japan has donated ten dialysis machines, and a dialysis centre has been established at Motebang Hospital. With regard to Social Development, the National Social Protection Strategy identifies the Child Grant Programme (CGP) as a flagship initiative to alleviate poverty and increase investment in the health and education of orphans and vulnerable children. Consequently, the grant programme was targeted to increase coverage from 26 000 households to 38 000 across 36 community councils in 2017/18.

COUNTRY ANALYSIS: LESOTHO Published in September 2017, the final draft of the United Nation’s Lesotho Country Analysis Report is based on a desk review of literature and consultation with government ministries, departments and agencies. United Nations (UN) agencies working in Lesotho also prepared Issues Papers on thematic areas (environment, climate change and resilience; gender equality and women’s empowerment; governance; health, nutrition, HIV and AIDS,

poverty, social protection, and youth) that provided data and information for the report. According to the analysis, the root causes of Lesotho’s health system challenges and limited access to health services include the following: • Limited accountability, including a lack of supervision, incomplete documentation and data, and only partial implementation of policies • Inadequate skills and capacities of human resources • Weak supply chain management • Socio-cultural factors such as limited community empowerment and access to services The report provides a baseline to envision and prioritise issues for the new United Nations Development Assistance Framework (UNDAF 2019-2023) for Lesotho. There are significant developmental challenges that need to be tackled if the country is to address the UN’s 2030 Agenda for Sustainable Development, African Union (AU) Agenda 2063, and achieve the country’s Vision 2020. At present, development and social progress indicators are below the expected targets for a low middle-income country, and the analysis indicates that Lesotho must strategically and comprehensively plan to deal with core development needs and priorities from the 2030 Agenda’s perspective but based on the country’s context and past performance.

Strengthening health sector quality and access According to the country analysis report, the current high investment in health has not translated into improved health outcomes for the population. The UN recommends putting in place an allinclusive, consultative process to finalise Lesotho’s five-year Health Sector Strategic Plan and Health Policy, in which the UN Sustainable Development Goals (SDGs) have been mainstreamed. These strategic health documents will facilitate a coordinated joint stakeholder implementation and review process. Further analytical work to determine and address the underlying causes of ill health and inefficiencies in the sector need to be carried out with support from UN, health stakeholders and donors, with the government leading the process. This should include the evaluation of previous health sector programmes, including the Health Sector Reform Project Phase 2 supported by the World Bank. High maternal and child mortality and HIVrelated deaths are partly due to the poor quality of service delivery. Continued implementation of the comprehensive Human Resources Development and Strategic Plan (2005-2025) to recruit and retain healthcare professionals will strengthen human resource for health structures. Government should, at both national and local levels, work with development partners and civil society organisations (CSOs) to reduce waste and inefficiency in the procurement and supply chain system to ensure that supplies and equipment are available in sufficient quantities and are of a suitable quality. Completion of the current, and development of a new, Health Management Information System (HMIS) will streamline the existing multiple data systems sources and ensure the availability of accessible, uniform and validated real-time data for evidence-informed intervention. The establishment of a robust surveillance system and contingency plans will help in preparing for, as well as managing and responding to, health emergencies. Finally, strengthening the leadership, governance and stewardship role of the MoH should lead to better management and accountability for enhanced results.

HEALTH PROFILE The MoH adopted the Primary Health Care (PHC) strategy in 1978. However, health outcomes remain

below expectations. High rates of communicable diseases and HIV/AIDS exert a great deal of pressure on health infrastructure and resources. At the same time, the health sector in Lesotho has suffered from high attrition with regard to its health professionals in recent years, in spite of efforts to reform the health sector within the context of the National Health Plan. The World Bank estimates that one-third of Lesotho-born physicians have emigrated. Lesotho has an elevated burden of AIDS-related deaths as well as high mortality due to noncommunicable diseases, including cardiovascular and chronic respiratory diseases, diabetes, cancer and road traffic accidents. The vulnerable and socially disadvantaged are more likely to die sooner than people of a higher socioeconomic class due to their exposure to hunger, harmful products (such as tobacco or unhealthy food), and limited access to health services. Fertility and contraception The total fertility rate (TFR) was recorded as being 3.3 in the 2014 Lesotho Demographic and Health Survey (LDHS). This has not changed since the 2009 LHDS, but is slightly lower than the rate of 3.5 reported in the 2004 survey. Fertility is notably higher among rural women than their urban counterparts, with the former group giving birth to nearly two more children during their reproductive years than urban women (3.9 and 2.3, respectively). This tallies with the finding that educated women from wealthy backgrounds are more likely to use modern contraception than less educated women from poorer homes. Teenage pregnancy in Lesotho has remained unacceptably high for the past ten years, with estimates of 20 percent in 2004 and 19 percent in 2014. These numbers are even higher among adolescent girls in rural areas. As regards the contraceptive prevalence rate (CPR), a comparison of results from the last three LDHS reports reveals that the CPR among married women in Lesotho has steadily increased: from 37 percent in 2004 to 47 percent in 2009 and 60 percent in 2014. Similarly, the CPR among sexually active unmarried women has risen from 48 percent in 2004 to 58 percent in 2009 and 73 percent in 2014. Among married women, the most popular methods are injectables (used by 24 percent), male condoms (used by 17 percent), and the pill (used by 14 percent), while among sexually active unmarried women the most commonly

used method is the male condom (45 percent). Furthermore, the survey reveals that 18 percent of currently married women have an unmet need for family planning services, with this figure rising to 20 percent among unmarried sexually active women. In Lesotho, family planning is part of the Sexual and Reproductive Health Programme of the Ministry of Health, and an important issue in the National Strategic Development Plan. Maternal health Proper care during pregnancy and delivery is important for the health of both mother and baby. The 2014 LDHS results show that 95 percent of women who gave birth in the five years preceding the survey received antenatal care (ANC) from a skilled provider at least once. A little less than three-quarters of women (74 percent) had four or more ANC visits. The percentage of women receiving ANC from a skilled provider has increased slightly from 2004 (90 percent) and 2009 (92 percent). In addition, 78 percent of women reported delivery by a skilled provider, and 77 percent of births took place in a health facility – an increase from 59 percent in 2009. Home deliveries are still common in rural areas and among less educated and poor women. Despite these advances, Lesotho’s maternal mortality rates are still unacceptably high at 1 024 deaths per 100 000 live births (2014), which is only slightly lower than the rate of 1 155 in 2009. This is because important healthcare services during pregnancy, childbirth and after delivery remain limited for the poor, especially those living in remote communities. Prompt postnatal care (PNC) for both the mother and the child is important to treat any complications arising from the delivery, as well as to provide the mother with important information on how to care for herself and her child. A large proportion of maternal and neonatal deaths occur in the first 48 hours after delivery. However, only 62 percent of women and 18 percent of newborns receive the recommended postnatal health checks within two days of delivery. First-time mothers are the most at risk, with sepsis, abortion and hypertensive disorders among the major causes of death. The WHO estimates that some 13 percent of maternal deaths in 2015 were indirectly AIDSrelated.

Child health and nutrition The impact of chronic food insufficiency and hunger is grave and a major concern to the Government, the UN and NGOs. For example, one-third of children under 5 years of age are stunted, 3 percent suffer from acute malnutrition (wasting), and 10 percent are underweight. Only 11 percent of infants 6-23 months are covered by the minimum accepted dietary standards and more than half of infants 6-23 months are anaemic. More than 27 percent of women and 14 percent of men aged 15-49 are anaemic. The highest levels of chronic malnutrition prevalence is in mountains (42 percent of residents), followed by foothills (41 percent) and the Senqu River Valley (34 percent). While malnutrition remains one of the most serious long-term problems facing the country, Lesotho has nonetheless seen marked improvements in stunting levels among children under the age of five, which has been reduced to 33 percent from 39 percent in 2009. Factors that have contributed to this positive trend include the provision of blanket supplementary feeding of 24 028 beneficiaries (children 6-23 months and pregnant and lactating women) and accelerated support for families and structures at community level to adopt optimal nutrition practices. Lesotho has established a schedule for the administration of all basic childhood vaccines, including BCG vaccination against TB, the polio vaccine, pentavalent vaccine and measles vaccine. Since late 2008, DPT vaccine (to prevent diphtheria, pertussis and tetanus) has not been given to infants in Lesotho as a stand-alone vaccine. Instead, it has been combined with other antigens that protect against hepatitis B and Haemophilus influenzae type b. This vaccine (DPT-HepB-Hib) is known as the pentavalent vaccine. In addition, the MoH has successfully switched from trivalent Oral Polio Vaccine (tOPV) to bivalent Oral Polio Vaccine (bOPV) for routine vaccination and campaign immunisation activities. According to the 2014 LDHS, among all children born in the five years preceding the survey, 68 percent received all basic vaccinations, with coverage having increased modestly since the 2009 LDHS estimate (62 percent). In total, 98 percent of children have received BCG, 98 percent the first dose of pentavalent, and 96 percent have received polio 1. Some 85 percent and 76 percent of children have received the third dose of the HEALTHCARE 101

Ministry of Health Telephone: +266 2231 2836 • E-mail: ps@health.gov.ls • PO Box 514, Maseru MOH Headquarters, Corner Constitution & Linare Roads, Maseru The health sector of Lesotho currently is in profound health transition characterized by a quadruple burden of communicable, non-communicable, child and maternal, and injury-related disorders. Lesotho Demographic and Health Survey 2014, the health outcome report is a mixed picture on the progress achieved. The successful completion of Millennium Challenge Corporation 2007- Lesotho Compact-funded project of health sector led to the improved infrastructure of health facilities across the country. The ministry has made steady progress in deploying adequate personnel in various health centers nationwide for effective and efficient service delivery of primary health care.

ADMINISTRATION The vision of Ministry of Health (MOH) is to achieve an efficient, equitable and accessible health care to all residents of Lesotho through a robust public health system, evidence based cost–effective interventions and participation of non-state actors to achieve Sustainable Development Goals 2030. The mission of MOH is to reverse the spread of HIV/AIDS Tuberculosis, reduce by three-quarters the Maternal Mortality Ratio and by two-thirds the Under- five Mortality Rate by 2020; through the strategies of Universal Health Coverage, Essential Service Package, Decentralisation and Health Systems Reform.

Clinics, Health Centers, Health Posts, Outreach Services and Mobile Clinics. The national referral hospital – Queen ‘Mamohato Memorial Hospital and upcoming regional hospitals (Motebang Hospital in Leribe and Ntsekhe Hospital in Mohale’s Hoek) are contributing to improve the efficiency of the health system by taking care of complex and challenging patients.

INTERVENTIONS: 1. Inactivated Poliovirus Vaccine:

The MOH and implementing partner (CHAL, Red Cross, and Private Sector) have an agreement to deliver equitable health services to every Basotho. The multiple development organizations and UN agencies (WHO, UNICEF UNFPA) are working in tandem with MOH to improve the health outcomes. MOH under the stewardship of Mr Nyapane Kaya, Honourable Minister of Health and,Mrs Manthabiseng Phohleli Honourable Deputy Minister of Health.

SERVICE DELIVERY The health service delivery in the ten administrative districts is through a network of Hospital, Filter

Honourable Deputy Minister of Health, Mrs Manthabiseng Phohleli delivering a keynote address during World Aids Day Commemoration at Matukeng Health centre in the Maseru District.

World Health Organization (WHO) in May 2012, declared poliovirus eradication a global public health emergency. Lesotho along with other developing countries pledged to abide by WHO guideline to eradicate polio by 2018. Under this plan to achieve a polio-free world, WHO recommended that the use of Oral Polio Vaccine (OPV) must eventually be stopped worldwide. MOH introduced the Inactivated Poliovirus Vaccine (IPV) into the routine immunization schedule in April 2015. IPV does not cause any paralysis and is a very safe vaccine. IPV introduction sets the stage for phasing out of OPV once eradication of Polio virus has been achieved. IPV will continue to provide full protection against Polio Virus with withdrawal OPV

Honourable Minister of Health Mr Nyapane Kaya greeting staff at Seboche Hospital in Butha-Buthe District during his familiarization tour of the Health Facilities

in future. Introduction of IPV to our community also helps us remind caretakers about the importance of vaccinations overall and inform them about missed and upcoming vaccinations.

2. Implementation and achievement of the health reform The Lesotho Health System Reform launched in 2014 brought the improvement in health indicators in four pilot districts -Mohale’s Hoek, Berea, Leribe, and Botha-Bothe. Partners In Health-Lesotho support this initiative of improving the district public health system by establishing a decentralized community governance model and an empowered district health management team with clear operational lines and accountability to the system. The first phase of the initiative had significant improvements in primary health care (PHC) services in pilot districts. The better utilization of health care services by the communities in reform districts was apparent in a 95 % increase in the number of people who attended the out-patient department of various health facilities in four districts. The Maternal and Child Healthcare and HIV testing, treatment and care also saw an improvement in pilot districts. The number of women delivering in health centres

Honourable Minister of Health Mr Nyapane Kaya at the occasion to mark the Oral Health Day at Holy Cross Health Centre in Mohale’shoek District

increased from 323 (pre-reform 2013) to 4,886 (year one of reform), and the number of children who received Measles vaccine increased from 5435 (prereform) to 12947 (year one of reform). The number of people tested for HIV improved 59,861 (prereform) to 148,232 (year one of reform). The one of the major reason for the success of reform was the strengthening of community health initiatives under Village Health Worker Program.

3. Test and Treat All HIV patients: MOH launched the “Test and Treat all HIV patients” as path breaking intervention to curb the menace of HIV/TB throughout the country. Lesotho is the first country in Sub-Saharan Africa to implement this new approach. The WHO new guidelines of 2015 recommended to remove all limitations on eligibility for anti-retroviral therapy (ART) and endorsed that anyone infected with HIV should begin ART as soon as possible. The country has aligned itself with the ambitious global targets set by UNAIDS/WHO of “90-90-90”. The 90% of HIVinfected should know their status, among them 90% of those should be on treatment, and 90% of those who are on treatment should achieve viral load suppression. This strategy entails that the stable patients should be given anti-retroviral drugs (ARVs) supply of 3-6 months. The community adherence groups are being established for stable patients to decongest health facilities. The ART initiation and refills are decentralized as close to the community as possible, including the provision of ARVs refills in outreaches sites and at health posts. In an attempt to address the anticipated increase of clients who will need ARVs, MOH has agreed that lower

Honourable Deputy Minister of Health, Mrs Manthabiseng Phohleli, hounoring Nkhono Mamolise an elderly lady, a member of Support Group during the World AIDS Day in Matukeng Health centre.

level cadres of health workers can initiate and represcribe ART. The following new cadres of health care workers who can now start ART are -Trained nurse assistant, Health extension worker, Pharmacist /Pharmacy Technician and Trained expert patient of HIV (re-prescribe for stable patients only). The new cadres are permitted to initiate and re-prescribe ART once they acquire appropriate training and certification. The establishment of Molecular laboratories in Botha –Bothe and Mafeteng Hospitals with the support of SolidarMed and USAIDS-PEPFAR respectively will support the Viral Load testing of HIV patients. These state of art facilities are providing viral load test to all HIVpositive clients of the catchment population.

4. National TB and Leprosy Programme Lesotho has since been classified among the 30 high burden countries in the world by WHO with an estimated annual incidence of 724 TB cases per every 100,000 population. As per 2014-15 DRS report, MDR-TB prevalence remains a concern with 3.2% and 6.8% of new and retreatment TB cases respectively. Despite the high burden of TB, TB/HIV and MDR-TB, TB case detection rate is 49% which means more than half of estimated TB cases are not diagnosed and treated. In order to address this high burden, the Ministry of Health continues to conduct TB screening campaigns, roll out new technologies to diagnose TB such as recent use new ultra gene Expert cartridges. TB diagnosis and treatment continues to be accessed free of charge as well enablers such food packages and transport support for MDR-TB patients. The plan is to also provide food as treatment for all TB patients. Selected sites

Honourable Minister of Health Mr Nyapane Kaya administering polio vaccine to a baby at Holy Cross Health Centre in Mohale’s Hoek.

have been identified to further improve laboratory network and mini laboratories are near completion. New second line anti TB drugs were introduced to improve treatment outcomes of Drug Resistant TB patients and improve quality of health.

5. LEPHIA

LEPHIA (Lesotho Population-Based HIV Impact Assessment) was conducted in Lesotho from November 2016 to May 2017. The aim of the survey was to measure the impact of the country’s HIV prevention, care and treatment. The specific objectives were to estimate the national HIV incidence among adults, aged 15 years and above and estimate the national and subnational prevalence of HIV and viral load suppression. The survey was conducted nationwide in a sample of 10,000 households with 15,000 participants. The results of LePHIA survey show a significant progress in controlling the HIV epidemic. The key findings of the survey among adults ages 15 to 59 is as follows: • HIV prevalence is 25.6 percent (30 percent among females and 20.8 percent among males. • Incidence rate rate is 1.47 percent with 1.74 percent among females and 1.22 percent among males • Viral load suppression among HIV positive is 67.6 percent. • The survey has shown that Lesotho is making a noticeable progress towards achieving the UNAIDS 90-90-90 targets among adults 15to 59 years. • Among those who tested HIV positive 77.2 percent reported knowing their status • Among PLHIV who know their status 90.2 percent are currently using ART. • Among PLHIV who reported current use of ART 88.2 percent are virally suppressed. • The launching of Test and Treat Strategy in 2016 can be promoted further for the HIV epidemic control by increasing the number of PLHIV who are on Antiretroviral Treatment (ART)

6. Neglected tropical diseases situation in Lesotho MOH with the support of WHO conducted a mapping exercise on the status of Neglected Tropical Diseases (NTDs) in Lesotho. The country had no data on the distribution of Soil Transmitted Helminths

(STH) and to confirm the occurrence or non-existence of Schistosomiasis. The objective of mapping was to conduct a baseline survey to determine the extent of distribution of Schistosomiasis and STHs among the general population living in Lesotho and implement deworming and other strategies for the national control and elimination of these NTDs. The recommendations of survey are as follows• Health education especially on hygiene in schools and at community level should be strengthened • Provision of access to clean water for hygienic practices in communities and schools to be improved • Mass drug administration (Albendazole) to be implemented in schools and communities. • Sanitation to be improved in schools and communities • Environmental control- Minimize the contamination of the environment with human and animal excreta • Systems and guidelines on management of worms should be developed and implemented • Deworming of animals by relevant ministry • Further investigation on the magnitude of Taeniasis (tapeworm) and Fascioliasis (fluke worm) is recommended The survey concluded by laying an emphasis on a multisector approach to address the NTDs.

7. Voluntary Medical Male Circumcision: The flagship program of MOH on HIV prevention is the Voluntary Medical Male Circumcision (VMMC) apart from another measure like correct and consistent usage of condom in every sexual encounter, limiting the number of sexual partners and prompt treatment of sexually transmitted infections. The VMMC program started in the country in 2012; to date approximately 130,000 VMMC procedure have been performed with the support of major implementing partner of VMMC i.e. JHAPIEGO. The VMMC began with the capacity building of health care professional at various levels of care- Hospitals, Health Centres Outreach sites. The HIV prevention program has further expanded with inclusion of early infant male circumcision (EIMC) procedure for male infants under local anaesthesia. The EMIC is performed across all public sector hospitals including CHAL institutions. Another innovation that MOH adopted with the support of JHAPIEGO, is the VMMC procedure through a nonsurgical method i.e. - PrePex Device. PrePex is the world’s only Non-Surgical Male Circumcision Device. It is validated as a safe, fast and cost-effective male circumcision device for Adults and Adolescents.

required three doses of the pentavalent and polio vaccines, respectively. Coverage of vaccination against measles is 90 percent. Only 1 percent of children in Lesotho have not received any vaccinations, which compares favourably to the 2009 LDHS in which 3 percent of children were reported to have not received any vaccinations. The Lesotho Vulnerability Assessment Committee Report of July 2017 appraised the estimated coverage for children under five years of age in respect of vaccination, deworming and Vitamin A supplementation. The findings were as follows: • Measles-rubella vaccination coverage was recorded at more than 70 percent in all ten districts, while three out of ten districts had above 90 percent coverage (thus achieving ‘herd immunity’). • Vitamin A supplementation coverage is above 80 percent in seven districts and below 50 percent in one district (Mokhotlong). Children with vitamin A deficiency are more likely to die of measles infection. • Deworming coverage is above 50 percent in nine out of ten districts and only 20 percent in Mokhotlong. Importantly, deworming is helpful in preventing micronutrient deficiencies. Lesotho has significantly reduced its child mortality rates – an indicator of a nation’s level of development – owing to improvements in child nutrition and increased immunisation against measles. The 2014 LDHS documents a pattern of decreasing under-five mortality during the 15 years prior to the survey. While there was little change in mortality rates between the 2004 and 2009 surveys, the changes between the 2009 and 2014 surveys are striking, with the under-five mortality rate decreasing from 117 to 85 deaths per 1 000 live births. This is primarily due to a substantial decrease in infant mortality, which fell from 91 deaths per 1 000 live births to 59 deaths per 1 000 live births. Furthermore, Lesotho’s neonatal mortality rate has dropped steadily in the past decade, and now stands at 32.7 per 1 000 live births (WHO, 2015). Tuberculosis (TB) Lesotho has the second highest TB incidence in the world (788/100 000) and a low TB case HEALTHCARE 104

detection rate of 49 percent. The treatment success rate has stagnated at approximately 70 percent for new and relapsed cases, with very high TB-related mortality of 15 percent. Late diagnosis of TB remains a challenge, contributing to high morbidity and mortality. In addition, the diagnosis and management of childhood TB remains a significant challenge, and drug resistant TB is increasing. According to the Drug Resistance Survey conducted in 2013/14, the national prevalence of MDR-TB was 3.8 percent, including 3.2 percent among new TB cases and 6.9 percent among previously treated cases. The gap between notification and estimated incidence has persisted, indicating missed TB notifications. Lesotho is observing declining TB notification trends despite high WHO estimates.

HEALTH PROGRAMMES A wide variety of development partners and donors support the Government of Lesotho in the health sector, with a large proportion of technical and financial support coming from the WHO. The Health Development Partners Forum, co-chaired by the WHO and the US President’s Emergency Plan for AIDS Relief (PEPFAR), facilitates coordination of health sector support in the country from the partners’ side. Strategic priorities and focus areas under the WHO Country Cooperation Strategic Agenda (20142019) for Lesotho comprise: strengthening the prevention and control of HIV/AIDS, TB and MDR-TB; strengthening family and community health, including sexual and reproductive health; enhancing the capacity for the prevention and control of major communicable and noncommunicable diseases; strengthening health systems capacities and performance; and fostering health sector partnerships, advocacy and equity. New WHO TB guidelines serve to raise awareness of TB as the world’s top infectious disease and address contentious issues such as the isolation of contagious patients, the rights of TB patients in prison, and discriminatory policies against migrants affected by TB, among others. The Lesotho United Nations Development Framework and Plan (LUNDAP) is fully aligned

with the country’s National Strategic Development Plan and implemented through the ‘Delivering as One’ initiative. Annual reviews of the LUNDAP are conducted jointly with Lesotho’s Government. The UN has provided strategic guidance through the development of national policies, plans and technical guidelines in the areas of Adolescent Health and Integrated Management of Childhood Illnesses (IMCI), Nutrition, Sexual and Reproductive Health (SRH), NonCommunicable Diseases and Neglected Tropical Diseases (NTD). These strategic documents guide the acceleration of implementation of high impact interventions needed to improve health and reduce the vulnerability of Basotho. The United Nations Population Fund (UNFPA) partners with the Lesotho Planned Parenthood Association (LPPA) and others to make Sexual and Reproductive Health Rights (SRHR), including family planning and HIV prevention services, accessible to all Basotho. Cancer screening In 2013 the Elizabeth Glaser Paediatric AIDS Foundation (EGPAF), with funding from the US Agency for International Development (USAID) and PEPFAR, helped the MoH to launch services at Lesotho’s first-ever cervical cancer screening and prevention facility, the Senkatana Centre of Excellence located in the Bots’abelo Hospital in Maseru. Senkatana now offers comprehensive gynaecological services, with an emphasis on cervical cancer screenings, diagnoses, pre-cancer treatment services, and referrals to facilities for cancer treatment. EGPAF is currently working to decentralise these services to sites throughout the country. Given the delay in processing test results, most clients are screened using Visual Inspection with Acetic Acid (VIA), a cost-effective alternative whose results are immediately available. Because the centre provides a full range of services, clients are also offered breast exams, HIV testing and counselling for those who do not know their status, and screening for sexually transmitted infections (STIs). Other at-risk groups are also screened for diabetes and hypertension. Human papillomavirus (HPV) infection is now a well-established cause of cervical cancer, with HPV types 16 and 18 responsible for about 70 percent of all cervical cancer cases worldwide. The

immunisation of girls against HPV is viewed as the most cost effective method of managing the occurrence of cervical cancer, and Lesotho has implemented a number of vaccination campaigns in recent years. About 312 new cervical cancer cases are diagnosed annually in Lesotho, with cervical cancer ranked the leading cause of cancer in Basotho women, and the second most common female cancer in women aged 15 to 44 years.

THE HIV/AIDS PANDEMIC HIV and AIDS is a burden to the health sector and has hampered both economic growth and social progress in Lesotho, becoming the leading cause of morbidity and mortality in the country. Lesotho exhibits the second-highest rate in HIV prevalence and incidence among those aged 15-49 years, of which almost 25 percent are infected with HIV. According to the LDHS, this is significantly greater among women (29.7 percent) than men (18.6 percent), with women aged 35-39 years old having the highest prevalence at 46 percent. While still high, the incidence rate has seen a significant reduction from 2.7 percent in 2004 to 1.9 percent in 2015. One out of four new HIV infections occur among adolescent girls and young women, mainly as a result of exclusion, inter-generational sexual relationships, discrimination and gender-based violence. Lesotho has an estimated 328 000 people living with HIV, including 13 000 children. Of particular concern is HIV prevalence among vulnerable and risk populations, which stands at 72 percent for sex workers, 43 percent in factory workers, 33 percent in men who have sex with men, and 31 percent among prison inmates. Prevalence is higher in urban areas than in rural; with the Mokhotlong district having the lowest rate of 17 percent and Maseru the highest at 28 percent. Only 39 percent women and 31 percent men have a comprehensive knowledge (transmission and prevention) of HIV, with lower rates in rural women (43 percent) and men (26 percent) compared with urban women (46 percent) and men (42 percent). According to the LDHS (2014), 7 percent of women and 27 percent of men had two or more sexual partners, and among these, only 54 percent of women and 65 percent of men

reported using a condom during their most recent sexual encounter. Mobility and migration, along with gender inequality, poverty, income disparities and food insecurity, are structural factors which predispose individuals to HIV infection. While Lesotho has a number of HIV programmes operating across the country, many people struggle to access these services due to factors such as gender, socioeconomic status and geography, encountering issues such insufficient funds to travel to health centres and a lack of drug supplies. According to the Lesotho Stigma Index Report 2014, HIV stigma and discrimination are also major barriers to accessing vital treatment, prevention and support services. While the LDHS 2014 has found that attitudes towards people living with HIV have improved slightly, such individuals are still accepted by less than 50 percent of the population.

HIV PREVENTION PROGRAMMES The HIV and AIDS response is primarily funded by the Government of Lesotho, the Global Fund to Fight AIDS, Malaria and Tuberculosis, and the United States Government through PEPFAR. The Country Operational Plan (COP) 2017 is a continuation of the COP16 approach set in the context of the broader PEPFAR-Lesotho Strategic Framework (2015-2020). Since 2004, the Elizabeth Glaser Paediatric Aids Foundation (EGPAF) has worked in partnership with Lesotho’s MoH, district health teams, health facilities and communities. EGPAF currently supports more than 220 sites in ten districts to implement a comprehensive HIV package of services, including adult and paediatric TB and TB/HIV care and treatment, integrated maternal, newborn and child health (MNCH), reproductive healthcare (including cervical cancer screening and treatment), nutrition support, community engagement, community-clinic linkages, and strategic information and evaluation. Between 2004 and 2017, EGPAF-supported programmes in Lesotho have: • Conducted over 904 000 HIV tests, resulting in the identification of 63 000 HIV-positive individuals • Provided HIV services to over 16 667 new and relapsed TB cases (since October 2014) • Started more than 178 000 individuals on

Your Health, our Concern. • • •

ART, including more than 9 900 children up to the age of 14 Currently support 139 000 HIV-positive people on ART Provided PMTCT services to more than 253 000 women Trained over 3 200 medical staff to provide high-quality integrated health services

The ‘Fast Track’ initiative In 2014, UNAIDS embarked on the second phase of the worldwide ‘Fast Track’ initiative that seeks to end the AIDS epidemic by 2030. Fast Track proposes rapid and massive acceleration of HIV prevention and treatment programmes with a people-centred approach. The new set of targets that need to be reached by 2020 include achieving 90-90-90: • 90 percent of people living with HIV knowing their status • 90 percent of people who know their HIVpositive status on treatment • 90 percent of people with suppressed viral loads on treatment Fast Track is based on an approach which leaves no one behind, especially populations at higher risk of acquiring HIV, such as sex workers, gay men and other men who have sex with men, transgender people and people who use drugs. Under Fast Track, these groups are supposed to receive assistance regardless of where they live or the legal status of their behaviour. According to Lesotho’s Minister of Health, Mr Nyapane Kaya, there has been an increase in routine viral load testing from 6 232 tests in June 2016 to 14 800 in June 2017.

Tel: +266 2232 2417 +266 2232 4917 Fax: +266 2231 2720 Emergency Calls: +266 6312 9933 Shop No. 5, Husteds Building, Kingsway Road P.O. Box 82, Maseru

been steadily expanding across Lesotho, particularly at a community level, with more women (84 percent) than men (66 percent) having been tested at least once for HIV and received their results. PEPFAR offers direct support to MoH sites for Provider-Initiated Testing and Counselling (PITC) services. Lesotho has implemented providerinitiated testing and counselling, which is when service providers offer HTC rather than waiting for an individual to request it. A study exploring the differences in HTC services, particularly mobile clinic HTC and homebased HTC services, found that mobile clinic HIV testing was more effective at detecting new infections, while home-based HIV testing was more appropriate for testing children and people who had never had an HIV test before. This information is important for current strategies to engage more people in HIV testing, and for reaching marginalised groups.

Providing Universal Services for HIV/AIDS in Lesotho (PUSH) Project The USAID-funded PUSH project runs for five years (2016-2021) and aims to effect sustained reduction in HIV transmission, morbidity and mortality. PUSH will capitalise on gains made under the USAID-funded Comprehensive HIV/ AIDS Services Expansion project by sustaining support of a comprehensive package of HIV services in three districts (74 sites) and operations research at eight additional sites in other districts. Using a district-based approach, PUSH will expand coverage of HIV care and treatment services to 80 percent of the population of people living with HIV in Maseru (by 2017), and Mohale’s Hoek and Mafeteng (by 2018), while maintaining the quality of clinical services in all three districts.

• Strengthen HIV Testing Services (HTS)

Strengthening the TB and AIDS Response in Lesotho (STAR-L) Project (2015- 2020) EGPAF supports the MoH in implementing a comprehensive HIV service package in more than 46 sites in Leribe and Berea districts, and providing site-level services in 45 sites of these sites based on the PEPFAR/Government of Lesotho prioritisation strategy. The goal of STAR-L is to scale-up effective, sustainable, comprehensive HIV and TB/ HIV prevention, care and treatment interventions to reduce HIV transmission, morbidity and mortality. The package of services offered in these health sites includes HIV counselling and testing, PMTCT services, adult and paediatric TB and HIV care and treatment, integrated maternal and child health services and nutrition support, health systems strengthening, community engagement, community-clinic linkages, and strategic information and evaluation.

To meet treatment targets for the 2018 fiscal year, PEPFAR aims to identify an additional 8 522 HIV-positives individuals in high volume sites and link them to treatment. Facility-based and family tree testing will be the primary modalities for case identification.

HIV testing and counselling HIV testing and counselling (HTC) services have

Lesotho is also revising HTC guidelines in order to:

• •

and identify people with HIV through the provision of quality services for individuals, couples and families Effectively link individuals and their families to appropriate HIV treatment, care and support, as well as HIV prevention services, based upon their status Support the scale-up of high impact interventions to reduce HIV transmission and HIV-related morbidity and mortality, with the focus on antiretroviral therapy, voluntary medical male circumcision, PMTCT, pre-exposure prophylaxis (PrEP) and postexposure prophylaxis (PEP)

Test and Treat Lesotho was the first African country to launch the ‘Test and Treat’ strategy for HIV and HIV Testing Services (HTS) guidelines. The Government of Lesotho has wasted no time in implementing Test and Treat, which was launched in June 2016 and has subsequently been rolled out countrywide. Guidelines had hitherto stipulated that people HEALTHCARE 105

TEL: +266 2231 5970 | FAX: +266 2231 5112 | P.O. BOX 7151, MASERU, 100 HIV AND AIDS PROGRAM

COL ‘MATS’OTETSI VIOLET TLELAI

INTRODUCTION Makoanyane Military Hospital (MMH) is the only Lesotho military health service institution, currently headed by Col ‘Mats’otetsi Violet Tlelai as the Director Medical Services (DMS). The hospital was established in 1988 by the Lesotho Defence Force with the purpose of providing health services for those in the military and their families, as well as all other serving members of the uniformed services. Furthermore, the hospital provides medical cover for national events, national and international disasters while also providing medical technical support as requested by civil authorities such as the Ministry of Health (MOH) and other ministries. MMH

does not only provide this essential health service, but aspires to support the nation in its main health challenges such as scarce basic health care services due to poor road accessibility especially in the rural (hard-to-reach) areas. Continuous training has played a fundamental role in maintaining and improving various health care services provided by the hospital to its clientele. IN PATIENTS MMH is a 36bed hospital with two general wards (female and male), two dedicated wards (Maternity and paediatric) and one private unit. In these wards patients are cared for by dedicated and well trained staff with various health care specialties. These include medical doctors, psychiatric nursing, ophthalmic nursing, nurse anaesthesiology and midwifery, social workers, radiographers, physiotherapists and pharmacists.

When Lesotho continues to experience escalating HIV prevalence, MMH has continued tirelessly to engage itself in strategies that will combat HIV and AIDS in the army and the nation at large. Funded by the United States Department of Defence (US DoD) and in partnership with Population Services International (PSI)/ Lesotho, MMH has placed HIV preventive measures at the helm of the services provided. These services are in line with the national and international (UNAIDS) initiatives to culminate AIDS pandemic by the year 2030. One of the core objectives of the preventive strategies which strengthens the collaboration between MMH and PSI is targeting populations at high risk of acquiring HIV. Soldiers are routinely visited at their deployment areas for comprehensive health care services through MMH mobile clinic. Furthermore, PSI strengthened its support through personnel training and provision of additional clinical staff to MMH. HIV Testing Services (HTS) have been scaled up within the military personnel and their families through condom distribution and use promotion, home based testing (indexing), know your status through sports activities, post-test clinical care, mobile outreach, standalone static sites, as well as implementing Test and start strategy which was fully implemented by MMH since its adoption by the government of Lesotho. With the support from PSI antiretroviral treatment and TB treatment have been in cooperated and provided as package, hence improving HIV and AIDS services to its clientele. Other HIV services provided through the support of PSI include PMTCT and VMMC.

MEDICAL OUTREACH PROGRAM The government of Lesotho through the MOH is committed to providing quality health care to all her citizens.However, there are challenges facing this ministry ranging from lack of adequate medicines and medical supplies, scarce human resources for health, infrastructure and equipment, health financing, monitoring and evaluation, research partnerships and donor coordination. These challenges are further aggravated by the countryâ&#x20AC;&#x2122;s landscape and isolated unstructured rural areas where the majority of the population resides, hence leaving the communities in the rural areas with poor health service delivery. In order to provide a helping hand to the MOH, LDF command through MMH developed a medical outreach program e about 10 years ago. This program focuses on providing free medical services to the communities in the rural hard- to- reach areas. Some of the places which benefited from this program include Ha Tlali, Ha Peete, Masaleng, Taung, Mpokochela and various villages at Hloahloeng. RETIREES In addition to the outreach program services, MMH also provides mobile health services to the retired members of the Lesotho Defence Force. In this program, health care services are brought to the doorstep of the LDF retirees, their families and the communities around their home

villages or are available during the visits. The program is intended to maintain continuous health care and acknowledge the selfless service rendered by these individuals some of whom may not be able access quality health services owing to the topography of the country. EMERGENCY CARE AND RESCUE Emergency Medical Services (EMS) have either not been fully established or are nonexistent in developing countries. The situation is similar in the Mountain Kingdom, however, MMH has pioneered emergency medical services in the country with a long history of continued emergency care and rescue operations both to the LDF members and the nation at large. MMH considers emergency medical services (EMS) as a major component in health that provides care at the first point of contact for the critically ill or injured patient in their most vulnerable, misfortunate situation. This far paramedics have demonstrated highest caring skill sets, operating under challenging circumstances such as in road traffic accidents, rescue of persons trapped in snow and any other emergencies. In other circumstances MMH Paramedics operate in collaboration with other units within the army, other ministries and other security urgencies such Lesotho Mounted Police Services (LMPS), Disaster Management Authority (DMA) and Ministry of Health (MoH). However, EMS still faces challenges of proper education, training and infrastructure in the country. PERSONNEL TRAINING The members of a health care facility are its most valuable asset. The quality of patient care rendered by the staff is directly related to their

knowledge and skills. Hence, MMH management recognizes the value of competent and motivated staff, focused on promoting the quality of health services, and has developed a training strategy for staff development which assists each staff member to keep up with the current health trends by increasing their knowledge base and competence level through identified areas of improvement for staff development and training. MMH staff obtain their training from local and international health training institutions where Lesotho has diplomatic relations such as Republic of South Africa, United States of America, Peoples Republic of China, Republic of India and Republic of Zimbabwe. In-service trainings are also conducted which provide knowledge and skill sharing platforms. INFRASTRUCTURE

MMH infrastructure consists of the main hospital facility with various units and medical and non-medical services, Thomas Wellness Centre, which provides medical clinics for all chronic illnesses both communicable and non-communicable, a newly inaugurated TB clinic and the fleet of ambulances, mobile clinic and home based care vehicles. MMH with support from USDoD has made tremendous improvement from its original structure where this year in April a state of the art TB clinic was inaugurated. The clinic is the only one of its nature in the country if not in the SADC region and consists of three wings and two wards; male and female wards. Speaking at the occasion, the former Minister of Defence and National Security and the former Minister of Health noted that TB prevalence is very high in Lesotho hence becoming a major public health concern. However, they emphasised that the presence of the inaugurated facility will provide One Stop TB services which will address the main challenges posted by TB and HIV in the country as well as within the barracks. The services offered in this facility are mostly TB related services including: TB screening, treatment and patient admissions.

could only access treatment when their CD4 count was 500 and below, when they became very sick (as per WHO clinical staging), or if they belonged to selected populations (pregnant women, children and others). However, following various international research studies demonstrating that earlier use of ART is more beneficial and life-saving than delayed treatment, and the dissemination of the WHO Early Release Guidelines in September 2015, the standard policy going forward is that ART should be initiated in everyone living with HIV, regardless of their CD4 count. Antiretroviral therapy The scale-up of Anti-Retroviral therapy (ART) in Lesotho has accelerated in recent years, and currently stands at 57 percent of all people living with HIV against 42 percent in 2015. However, this is far below the 80 percent global coverage target. ART coverage in children now stands at 64 percent in the scale-up districts, which is a testament to the impact of the Accelerating Childhood Treatment (ACT) initiative. Equally important are the new service delivery models that have been implemented, which require fewer lab tests, less frequent clinic visits, multi-month prescriptions, and same day treatment initiation. These demonstrate that expanded treatment coverage is possible within the existing health system, as are improved retention rates among patients. PEPFAR’s investments during COP17 are intended to expand ART coverage in five districts to 90 percent during the 2018 fiscal year in order to achieve saturation across all age groups and sexes. PEPFAR also intends expanding geographically to 18 high-volume sites within the five sustained districts, thus maximising the efficiency of investments and expanding the capacity of the national programme. Lesotho is making progress in the fight against HIV/AIDS, with more than 140 000 people living with HIV currently on ART and 90 percent of 175 497 viral load tests conducted being virally suppressed. Voluntary medical male circumcision Evidence from international research, as well as the findings of the MoH situational analysis, indicates that male circumcision reduces transmission from HEALTHCARE 108

a woman to a man by 60 percent. Implementation of Lesotho’s voluntary medical male circumcision (VMMC) programme began in 2012. PEPFAR Lesotho is currently working with the MoH to scale up VMMC coverage to 80 percent among males aged 15–29 in five districts with a high unmet need for circumcision and HIV disease burden. In May 2015 a new VMMC project was launched at Scott Hospital in Morija, sponsored by PEPFAR, administered by USAID, and implemented by Jhpiego, an international, nonprofit health organisation affiliated with the Johns Hopkins University. This is part of more than US $225 million in bilateral support from the US Government to help Lesotho combat the HIV/ AIDS epidemic. In the 2018 fiscal year, PEPFAR aims to provide surgical direct service delivery to circumcise 50 182 men (41 400 aged 15-29 and 8 782 aged 10-14). This represents 85 percent saturation in the age pivot 15-29 years in the five priority districts of Berea, Maseru, Leribe, Mafeteng and Mohale’s Hoek. Technical assistance will be provided for the integration of early infant male circumcision in maternal and neonatal child health programmes in the saturated districts for sustainability.

TB/HIV co-infection The HIV prevalence among TB patients is estimated at 72 percent and the ART uptake is 86 percent among the notified TB HIV-positive patients. High risk groups for TB in Lesotho include children, pregnant women attending ANC, people living with HIV/AIDS, health workers, mine workers, the military, inmates and factory workers (who are also predominately migrants). The five PEPFAR scale-up districts account for 80 percent of the notified TB cases. Current priorities aim to: • Achieve or maintain 100 percent HIV testing rates among all TB cases and patients with presumptive TB • Provide universal ART for all people with TB diagnosed with HIV • Ensure timely TB diagnosis and TB treatment completion to ensure viral suppression • Scale-up TB preventive therapy (TPT) for all people living with HIV without active TB disease and implementation of TB infection prevention and control interventions • Support integrated and effective delivery of TB/HIV services at national, district and site level

Demand creation activities in scale-up districts will include forging collaborations between medical and traditional male circumcision practices due to the high prevalence (32-65 percent) and cultural significance of traditional circumcision. The MoH, with the support of Jhpiego, has conducted mapping of traditional circumcisers in the supported districts as a first step to facilitate further engagement. Jhpiego will provide medical circumcision to traditional initiates at health facilities prior to the rite of passage ceremonies, and the Ministry of Education and Training has given Jhpiego permission to implement demand creation activities for VMMC in learning institutions.

Based on the key COP 17 priorities, funding for TB/HIV initiatives covers a variety of activities. Key amongst these is the scaling-up of GeneXpert MTB/RIF22 and improving the early diagnosis of TB among people living with HIV to close the gap between current estimated TB incidence and notification rates. TB case detection is being intensified through the use of mobile laboratories loaded with Xpert MTB/RIF focusing on high risk groups within the country, while support is provided for TB/HIV services at border points of care, and the integration of TB/HIV care and treatment services in PEPFAR scale-up sites. TB preventive therapy is also being intensified for all people living with HIV without active TB disease.

Additionally, JHPIEGO also sub-grants to two CSOs – LENASO and the Lesotho Planned Parenthood Association – for a total of US $273 000 a year. Anticipated challenges to achieving the targets include transport logistics for hard-to-reach areas, overcoming the traditional belief that circumcision is better performed during winter months when healing is thought to be quicker, providing medical circumcision to men with prior ‘partial’ traditional circumcision, and refocusing demand to encourage a larger percentage of 15 -29 year olds to access VMMC services.

Pre-Exposure Prophylaxis (PrEP) Lesotho has an estimated 13 000 children and 15 776 adolescents living with HIV, as well as 73 000 children orphaned by HIV (UNAIDS, 2016). Though the HIV epidemic is generalised, incidence is disproportionately highest among adolescent girls and young women (AGYW), female sex workers (FSW), men who have sex with men (MSM), multiple concurrent partners, and those reporting sexually transmitted infections. The revised national guidelines on the use of ART for HIV prevention and treatment (2016) recommend

use of oral TDF/3TC for HIV-negative individuals at significant risk of acquiring HIV infection. The current initiative being implemented by PEPFAR and the Lesotho Government is to extend PrEP services to targeted groups in the priority districts using hybrid service delivery models. In the 2018 fiscal year, PEPFAR aims to provide PrEP services to 23 721 beneficiaries (13 945 girls aged 18-24, 8 256 sero-discordant couples, 950 MSM and 570 FSW). PEPFAR is providing focused technical assistance on selected indicators to ensure quality of services and data for decision-making and ensure all the necessary systems are in place prior to rolling out PrEP.

DREAMS PEPFAR’s DREAMS (Determined, Resilient, Empowered, AIDS-free, Mentored and Safe) initiative aims to reduce HIV infections among adolescent girls and young women in ten SubSaharan African countries. For COP17, the implementation of DREAMS continued in the districts of Maseru and Berea, and will expand to other community councils in these two districts to ensure full coverage and saturation. There is a greater emphasis on bio-medical interventions for AGYWs as well as increasing their linkages to testing services, and enrolment and retention into care and treatment for those needing it. Services include school-based HIV risk avoidance and violence prevention, community mobilisation and norms change activities, condom promotion and distribution programming, post-violence care, testing and counselling services, contraceptive mix options and PrEP. DREAMS is positioned to implement aggressive prevention for 79 510 young women and gender-based violence prevention for 2 746. Prevention of mother-to-child transmission (PMTCT) The burden of HIV disease among pregnant women in Lesotho is among the highest globally, with a 27 percent HIV prevalence rate among women attending ANC. The National PMTCT Strategy is to eliminate new paediatric HIV infections and improve maternal, newborn and child health and survival in the context of HIV. Routine viral load monitoring for all pregnant and lactating women and children was adopted as a standard of care in 2016.

The quality of PMTCT service delivery has continued to maintain high uptake of services within health facilities, with over 95 percent of pregnant women knowing their HIV status at their first ANC visit and 93 percent of the identified HIV-positive pregnant women receiving ARVs to prevent mother-to-child transmission (MTCT) of HIV. The MTCT rate among HIV-exposed infants less than two months of age is 1.6 percent.

founded nearly 80 years ago. The Scott Hospital Improvement Project (SHIP) was officially launched by His Majesty King Letsie III on 4 May 2016. Besides renovation work, SHIP hopes to build a new children’s hospital, with the aim of making it into the nation’s premier facility for paediatric healthcare. Other phases of SHIP include constructing a new maternity wing and major renovation work and upgrading of both Scott Hospital and the Scott Hospital School of Nursing. The scope of SHIP is large, with an estimated cost of at least US $10 million. Work will be carried out in phases as funding is secured. The first step of the project is renovation of the Labour Ward, which is being funded through a generous donation of US $75 000 from the Republic of Turkey.

The MoH has introduced a sample tracking tool for Early Infant Diagnosis, which has resulted in an improved turnaround time for test results, allowing HIV positive infants to be initiated on ART as soon as possible. UNITAID (2015-2019) The UNITAID project in Lesotho aims to increase the number of HIV-positive infants whose HIV status is known and facilitate early ART initiation for these children. To accomplish this, EGPAFLesotho is working with in-country partners and the Lesotho MoH to strategically place new-tomarket point-of-care early infant HIV diagnosis (EID) platforms within health facilities. Through UNITAID funding, Lesotho will by the end of 2018 have 29 EID testing sites, mostly ar ‘hubs’ or high-volume sites, receiving samples from an additional 160 ‘spoke’ sites. The project aims to achieve reduction in turnaround time between blood sample collection and results receipt by caregiver from the current 30-60 days to zero days at hub sites and seven days at spoke sites. It also aims to reduce the number of days from receipt of results by a caregiver to ART initiation among HIV-infected infants to less than 14 days, and ensure 648 infants (90 percent of identified infants) are receiving treatment by project end.

HEALTHCARE INFRASTRUCTURE The health system in Lesotho consists of a network of hospital, filter clinics, health centres, health posts, outreach services and mobile clinics. The MoH, together with its implementing partners the Christian Health Organisation of Lesotho (CHAL), Lesotho Red Cross Society (LRCS) and the private sector, work to deliver equitable health services to all Basotho.

Assistance is also received from multiple development organisations. The Health Sector Programme of the Millennium Challenge Account (MCA) has been an important source of funding for Lesotho’s healthcare facilities. This has seen the rehabilitation and expansion of 138 health centres across the country, expansion of 14 hospital outpatient departments, construction of a new laboratory and a new blood transfusion service centre, as well as dormitories for students and teachers at the National Health Training Centre (NHTC). The new National Laboratory and Blood Transfusion Centre based in Botšabelo, Maseru, aims to improve laboratory and diagnostic services to support the management of HIV/AIDS and nationwide TB programmes, as well as assure adequate and safe blood supplies for HIV/AIDS patients. Opened in October 2011, the Queen ‘Mamohato Memorial Hospital in Maseru is a state-of-theart referral hospital named after the late Queen ‘Mamohato Bereng Seeiso. Accommodating 425 patients – 35 private and 390 in the general ward – and some 700 employees, the ultra-modern hospital was built through a Public-Private

Partnership agreement. It replaces the Queen Elizabeth II Hospital, which was built more than half a century ago. Serving 20 000 inpatients and 310 000 outpatients a year, Queen ‘Mamohato Memorial delivers significantly more services and services of a higher quality than its predecessor, offering magnetic resonance imaging, laparoscopy procedures, neurosurgery, pathology services, intensive-care facilities, and 24-hour obstetrics at filter clinics. An additional dental laboratory has also been established here. The Molecular Diagnostic Laboratory at Motebang Hospital in Leribe has been refurbished at a cost of M2.3 million. This will enable it to meet the rapid expansion in viral load testing, with the laboratory to process 280 specimens in an eight-hour shift, which amounts to 70 000 tests per year. This refurbished facility negates the need for specimens to be taken to the national laboratory, and thus reduces the time taken for results to be available from four months to a week. Scott Hospital, the birth place of the King Letsie III, is an institution of the Lesotho Evangelical Church in Southern Africa (LECSA) and was

Lesotho’s other top hospitals include Maseru Private Hospital in Thetsane, and Wilies Hospital in Khubetsoana, Maseru. Additional health facilities in the Maseru area include Mohlomi Hospital for the Mentally Ill; Baylor College of Excellence, which caters for children with HIV/ AIDS; Senkatana for the provision of ART to adults; and the NHTC, which trains nursing professionals and more recently medical students. Lesotho’s only military health institution, Makoanyane Military Hospital (MMH) was established in 1988 by the Lesotho Defence Force to provide health services for those in the military as well as their family members. Infrastructure development has seen the creation of various medical and non-medical departments, such as physiotherapy, laboratory, maternity ward extension and expansion of medical stores, as well as the creation of a Wellness Centre containing a TB clinic, hypertensive and diabetes clinic, mother and child health and family planning clinic and HIV/ AIDS clinic. Vision Clinic Laboratory was established in November 2013 with the objective of cutting the cost of importing lenses by manufacturing high quality lenses in Lesotho. Vision Clinic supplies optometry practices in Lesotho and abroad. The Lab offers surfacing and edging of lenses using advanced technological machines (satisloh toromatic-cnc-computer). Vision Clinic supplies different lens types, from single vision to progressive lenses, including coating as well as fitting of high refractive index lenses. HEALTHCARE 109

Education & Training

Raising the quality of basic education while improving education infrastructure are critical pillars in providing a strong foundation for further skills development and enhancing the ability of Lesotho’s youth to participate more productively in the economy.

According to the UNDP’s 2016 Human Development Report (HDR), Lesotho has a literacy rate of 79.4 percent among adults 15 years and older, with 93.4 percent of women literate and 77 percent of men. Around 23 percent of the population has at least some secondary education. The Gross Enrolment Ratio (GER) is 31 percent at pre-school level, 107 percent at primary school level, 52 percent for secondary school and 10 percent for tertiary education. At the same time, the primary school dropout rate is measured at 32.6 percent, trained primary school teachers at 76 percent and the pupil-teacher ratio stands at 33:1. While Lesotho has worked hard to build human resources, progress has been constrained by factors such as poverty and inequality, high HIV/ AIDS prevalence and other health challenges; not to mention the education and skills mismatch, reflected in high unemployment rates. Despite the country’s low ranking in the UN’s Human Development Index (160th out of 188 countries), the expected years of schooling (10.7 years) is comfortably above the sub-Saharan average (9.7 years) thanks to Lesotho’s history of high levels of investment in education. In the past decade, Lesotho has made significant progress in terms of education, training and EDUCATION & TRAINING 110

literacy programmes. This is in part due to improved education policy that is underpinned by participatory approaches, service delivery and good governance. However, despite a strong commitment to free primary education, there are concerns that Lesotho has focused heavily on getting the numbers into school, while paying less attention to the quality of education. Since 2013, the Ministry of Education (MoET) has implemented various measures to address the challenge of access to and quality of primary and secondary education. These include developing early learning standards, a review of the basic education curriculum and assessment, and localising ordinary levels. In addition, the Child Friendly Schools (CFS) Initiative and a National School Feeding Policy have been implemented. Furthermore, the US $20 million Fast Track Initiative (FTI), supported by the Global Partnership for Education (GPE), has been completed. Another obstacle is the shortage of adequate classrooms, with the provision of new classrooms having been constrained by both resources and implementation capacity. The difficult terrain and climate are contributory factors, as the logistics of undertaking civil works in remote mountainous areas are extremely challenging. Consequently,

less than half the classrooms meet the required standards. Other issues relate to poor retention rates at primary and junior secondary levels, the fee policies, and lack of secondary schools in remote rural areas. Recent achievements by the Ministry of Education include the development of the 2016-2026 Education Sector Strategic Plan, as well as curriculum reform at lower basic level (Grades 1 to 6) and development of Non-Formal Education modules for learners using the integrated curriculum textbooks at lower basic level. Approved during 2016, the World Bank’s US $25 million Education Quality for Equality Project targets 300 of the poorest-performing primary schools and 65 junior secondary schools in rural and hard to reach mountain areas in Lesotho. In total, 84 500 students are expected to benefit from the project over a five-year period (2016-2021). The project’s core objective is to improve basic education service delivery and student retention in targeted schools, based on three complementary components: improving the teaching and learning environment; strengthening accountability for student learning and retention; and strengthening

institutional capacity. The project advances an innovative approach to empowering key role players at the school level, including school principals, teachers, school boards and local communities. A new model for teaching mathematics and science is also being piloted in some junior secondary schools. Priorities for 2017/18 An amount of M3 billion was proposed in the 2017/18 budget for the education sector under the Ministry of Education and Training and the Ministry of Development Planning. At M2 320.1 million, Education and Training made up 17.2 percent of the recurrent budget, constituting the largest single budgetary allocation. The bulk of this provision is earmarked for intensifying school inspections in order to support teachers and school leadership, with the aim of improving the inspection cycle in 2017/18. The MoET intends visiting all Lesotho’s 341 secondary schools and 1 478 primary schools before the end March 2018. Besides quality, inspections also focus on ensuring compliance with Government policies on school feeding, Early Childhood Care and Development (ECCD), inclusiveness of education and payment of the Government levy. Additionally, work is being undertaken to rehabilitate classrooms and construct new science laboratories.

Since 1978, Lesotho has operated a loan bursary scheme managed by the National Manpower Development Council and Secretariat to fund students at tertiary level. The design of the programme has remained static for many years, and currently faces the following challenges: • The demand for loans outstrips the fund’s capacity, and the system perpetuates inequality as a significant number of recipients are from families who can afford to pay for tertiary education. • Subsidy levels are so high as to exclude private sector involvement in the provision of loan bursaries, thus limiting the number of recipients to those covered by taxpayer resources. • The fund arrangement undermines the independence of education providers as their fee adjustments must be tailored to what the fund can afford. To address these limitations, the Loan Bursary Fund (LBF) is presently pursuing comprehensive reforms with the aim of developing appropriate policies and legislation to enhance efficiency and effectiveness in the administration of the fund.

THE EDUCATION SYSTEM Lesotho’s formal education system consists of different levels, with three years of pre-school education inclusive of one year in the reception class (Grade R). Primary schooling – which is free – lasts for seven years, and comprises Grades 1 to 4 (Lower Primary) and Grades 5 to 7 (Upper Primary), with the Primary School Leaving Examination (PSLE) taken at the end of Grade 7. Secondary school covers five years, made up of three years of Junior Secondary School (Grades 8 to 10), with the Junior Certificate (JC) examination taken at the end of Grade 10, and two years of High School (Grades 11 and 12) which culminate in the external Cambridge Overseas School Certificate (COSC) examination. The duration of tertiary education is a minimum of one year, depending on the type of programme (certificate, diploma or degree). There is also NonFormal Education (NFE) that cuts across primary, secondary and tertiary.

The Lesotho College of Education (LCE) partners with the National University of Lesotho to provide basic pre-service teacher education for teaching in primary and secondary schools. The LCE also provides in-service, part-time and distance teacher education to enable unqualified and underqualified school teachers to achieve diploma-level qualifications. School and technical education examinations are managed by the Examination Council of Lesotho, together with the Technical and Vocational Education and Training Commission.

participatory and sustainable IECCD services from preconception to five years of age to ensure children will be healthy and well nourished, achieve their potential in all developmental areas, be ready for school, and become productive citizens.

Pre-School Education There is a growing recognition of the importance of Early Childhood Care and Development (ECCD), and advocacy efforts in this regard have been intensified through UNICEF, civil society organisations, faith-based organisations and individuals. Locally generated evidence from biannual National Assessment Surveys indicates that ECCD is able to improve learning outcomes in primary schools.

• Develop IECCD centres and services, with

The Early Childhood Development unit established under the MoET coordinates all ECCD activities and endeavours to increase access to ECCD, standardise the training of teachers and attach the ECCD programme to pre-existing primary schools. ECCD in Lesotho presently takes three forms: • Community-run pre-schools offer home-based care for disadvantaged children aged three to five years, who are taken care of by unpaid volunteers. The same national curriculum is used and no fees are paid

• Centre-based approach for children aged three to five years through mostly privately-owned ECCD centres, where both fees and teachers are paid.

• Reception Classes for five-year-olds where

children are prepared for entry into primary school. No fees are paid and teachers are paid by government.

Lesotho’s Integrated Early Childhood Care and Development (IECCD) Policy aims to provide all Basotho children and their parents or guardians with equitable access to comprehensive, continuous, culturally appropriate, high-quality,

The IECCD Strategy (2013/14-2017/18) centres on eight priorities areas which aim to: • Improve and expand preconception, antenatal and neonatal services for mothers, fathers and infants priority given to children from 0 to 3 years and their parents to ensure holistic child development

• Ensure vulnerable children with developmental delays, malnutrition, HIV and AIDS or disabilities receive early childhood intervention services

• Improve and expand pre-school services

(including home-based and reception year services) for children 3 to 5 years, and improve transition from home and pre-school to primary school

• Promote the rights and protection of children

and parents, especially for children in difficult circumstances

• Expand and improve the system for pre- and in-service training for all IECCD services

• Design and implement a structure and plan for policy monitoring, evaluation, action research and follow-up planning

• Develop and implement annual plans for

policy advocacy and social communications

In 2015, there were 53 530 children aged two to five years enrolled in 2 204 ECCD facilities, comprising reception classes, centre-based and home-based facilities. In order to address the limited absorption capacity of the LCE to enrol more trainees, the MoET offers in-service training to teachers using its area resource teachers’ structure with a UNICEF-supported curriculum and other learning materials.

Key priorities for 2017 were to finalise early learning and development standards (to conduct age validation) so that a review of the ECCD curriculum could be started, as well as to conduct in-service training for about 200 ECCD teachers on child development and related issues following the ECE curriculum. Primary Education Universal access to primary education has been supported by various measures, such as the school feeding programmes, child grants, construction of schools to reduce walking distance, the provision of learning materials and integration of children with special educational needs into primary schools. Whereas previously the majority of schools in the country belonged to churches, the MoET has taken over increased responsibility for primary education, and is responsible for the payment of teachers and provision of financial support for most registered schools belonging to churches, the community and Government itself. As of 2017, there were 1 478 primary schools in Lesotho. Physical access to schools in the mountainous and remote areas is a major challenge, particularly for children from food insecure households. Government has been building schools in remote areas to reduce long walking distances. These new schools are better equipped with facilities and teaching staff, which leaves old schools with few children and accounts for the decline in the number of schools in the past decade. One of the priorities for 2017 was to train 245 primary school teachers on Child Friendly Schools Standards and 300 on the new integrated curriculum. Owing to the universal free education policy and school feeding programmes, the Net Enrolment Ratio (NER) in primary education has gone up over the years. According to the Education Statistical Report (ESR), the NER in primary schools was 75.8 (74.4 boys, 77.2 girls) in 2015, with a gender parity index of 0.98. The cohort survival rate was 72 percent in 2015, having increased from 61 percent in 2008. Repetition rates at primary level have decreased, to 8.6 percent (male 9.5, female 7.1) from 19.4 percent in 2012. A total of 26 percent (94 333) of all children enrolled (361 637) EDUCATION & TRAINING 111

in primary schools in 2015 were orphaned, while 5.2 percent of all enrolled children had a form of disability – a decrease from 5.4 percent in 2014.

His Majesty King Letsie III caps the graduates at the 2017 National University of Lesotho Graduation ceremony © National University of Lesothio

Secondary Education The number of registered secondary schools increased to 341 in 2017. Public secondary schools constituted 98 percent of these schools, while private schools made up 2 percent. As many teachers resist teaching in remote rural areas, schools in the urban areas or lowlands tend to be overcrowded. M15 million was set aside for the construction of secondary schools in the 2017/18 budget. According to the ESR, there were 128 701 learners enrolled in secondary education in 2015 (55 095 boys and 73 606 girls). The NER was 38.7, while the gender parity index was 1.6. At the same time, 39 percent of learners enrolled in secondary school were orphans, and 6.4 percent had some form of disability. While there is almost gender parity at the primary school level, at secondary level considerably more girls than boys are enrolled (a NER of 47.3 for girls against 30.4 for boys in 2015). While boys drop out of school to herd cattle, girls drop out to provide child labour to households. This can be attributed to sociocultural norms and practices, as well as economic and social factors such as poverty, distance from school, the impact of HIV, teenage pregnancies, child marriages and the lack of sanitary material. Although more females than males are enrolled in university education in Lesotho, this has not translated into changes in socio-cultural norms and practices. Studies have shown that girls’ course selection and performance at secondary schools were influenced by the persistence of traditional gender roles and cultural norms. For example, the perception that boys are good at mathematics, science and technology while girls are good at languages and home economics is widespread among teachers, parents and, consequently, male EDUCATION & TRAINING 112

the best care and support available. The facility is an initiative of the Sentebale charity, which was co-founded by Britain’s Prince Harry and Lesotho’s Prince Seeiso in 2006. Activities held at the centre include: hearing assessments for children with hearing disabilities; workshops and training for community-run organisations caring for vulnerable children; and youth education and life skills workshops. The centre is also hosting weeklong residential camps which aim to ensure that all 1019 year olds living with HIV access and adhere to their treatment, feel supported in school, at home and in the community, and are able to lead healthy and productive lives.

NON-FORMAL & SPECIAL EDUCATION and female students. In addition, teachers and principals are often not gender sensitive in their attitude, behaviour and teaching practices, which negatively influences the opportunities of girls’ access to, retention in, and completion of secondary education.

remote and economically-disadvantaged highland and mountainous regions of the country. School meals provide a powerful incentive for parents to keep their children in school, while the food also improves their health and gives them the energy they need to concentrate on their lessons.

VULNERABLE CHILDREN

Through the National School Meals Programme, which is fully funded by the Government, WFP presently provides 189 511 children in 921 primary schools with morning porridge and a lunch meal of maize with either beans or peas. The meals provide micronutrients and improve the learning environment, increasing enrolment and attendance and reducing dropout rates. In the aftermath of the El Niño-induced drought, the meals serve as an effective safety net for children from food insecure families. WFP also supports the Government’s education strategy of free and compulsory primary education.

The Child Grants Programme (CGP) is a nonconditional social cash transfer for poor and vulnerable households with the objective of improving the living standards of Orphans and Vulnerable Children (OVCs) as well as reducing malnutrition, improving health status and increasing school enrolment. As a result of the CGP, there have been significant reductions in children’s morbidity rate and school dropouts, along with an increase in birth registration and school enrolment. The CPG has also contributed to lessening vulnerabilities at community level, particularly in situations where children from poor households often have to drop out of school and are forced to seek employment in an effort to help families survive. National School Meals Programme The World Food Programme (WFP) supports the Lesotho Government in providing two free meals a day to pupils in schools located in the

All public schools have a school feeding programme where children who are orphaned and/or vulnerable receive two meals per day. ‘Mamohato Children’s Centre Opened in November 2015, the ‘Mamohato Children’s Centre at Thaba Bosiu aims to provide vulnerable children affected by HIV/AIDS with

Non-formal education (NFE) is essential for all those that have been excluded from the formal schooling system. In Lesotho, there is some provision for adults and out-of-school youth to receive education that is equivalent to Standards 1-10, most of which takes place through skills development centres. Generally community centres rather than government institutions, these NGOs rely largely on sponsorship from donor agencies. There are presently no benchmarks for NFE provision. The Government budget for NFE (literacy and adult basic education) is mainly channelled through the Lesotho Distance Teaching Centre (LDTC), which comprises two main divisions. The Basic Education Unit is for those wishing to acquire reading, writing and simple arithmetic skills as well as life skills, and offers a free Literacy Programme. The Continuing Education Unit provide courses to out-of-school candidates at JC and non-formal COSC levels. The Institute of Extra-Mural Studies (IEMS) in the National University of Lesotho also provides a range of courses. Umbrella bodies currently helping to coordinate the sector include: • The Lesotho Council of NGOs (LCN)

• Lesotho Association for Non-Formal Education (LANFE)

The National University of Lesotho More Than 70 Years of Creating Champions

THE VISON: A VIBRANT AFRICAN UNIVERSITY, NURTURING THOUGHT LEADERS PROUD PAST Born on the 8th April 1945, the University has seen a series of evolutions from Pius XII Catholic College, University of Botswana, Lesotho and Swaziland and through to National University of Lesotho (NUL). It has produced high caliber, reputable and renowned people in all sectors of life for the African continent primarily in the Southern African Region. It boasts a student population of approximately 10,000 students drawn mainly from Lesotho and supplemented by Botswana, Cameroon, China, Ethiopia, Ghana, India, Kenya, Malawi, Nigeria, South Africa, Swaziland, Zambia and Zimbabwe. The University has a physical presence in four districts with five campuses. NUL graduates do not only serve Lesotho but are leaders in various spheres in the region, across the continent and internationally. QUALITY PROGRAMME OFFERINGS NUL offers undergraduate qualifications at Certificate, Diploma and Degree levels. The revamped postgraduate qualifications offered include Postgraduate Diplomas, Honours, Masters and Doctoral degrees in all the faculties except the Faculty of Health Sciences. The qualifications are offered through seven faculties and the Institute of Extra Mural Studies as shown below:

MORE THAN 70 YEARS OF CONTRIBUTING TO NATIONAL ADVANCEMENT The year 2015 marked the 70th Anniversary of the founding of the National University of Lesotho as a higher education institution in Lesotho. The commemoration helped reposition NUL by creating new as well as strengthening existing partnerships with various stakeholders and mostly the University Alumni to advance research and academic programmes of NUL; to provide a foundation into the future and; to attract funders to sponsor NUL programmes and facilities.

Economics and Extension, Animal Science, Crop Science, Faculty of Agriculture Agricultural Consumer Sciences, Soil Science and Resource Conservation. Faculty of Education Educational Foundations, Language and Social Education, Science Education. Faculty of Health Environmental Science, Nursing, Pharmacy. Science Languages and Literature, Development Studies, English, French, Faculty of Humanities African Historical Studies, Library and Information Studies, Philosophy, Theology. Faculty of Law Private Law, Procedural and Adjectival Law, Public Law. Faculty of Science Biology, Chemistry and Chemical Technology, Geography and Environmental and Technology Science, Mathematics and Computer Science, Physics and Electronics. Faculty of Social Business Administration, Economics, Political and Administrative Studies, Sciences Sociology, Social Anthropology and Social Work, Statistics and Demography. Institute of Extra Adult Education, Business Management and Development, Non-Formal and Mural Studies Continuing Studies, Research, Evaluation and Media.

To ensure that NUL remains the leading institution of higher learning, patriotic interventions by the corporate sector and international organizations led to, among others: • The face-lifting of the University premises to improve their appearance and functionality • The expansion of freely-accessible Wi Fi to enhance students’ learning outside the classroom • The furnishing of computer laboratories both at the Roma and Maseru campuses • The use of modern-day technologies in teaching and research. • Expansion of Postgraduate programs offerings in line with the modern day needs and attracting more international students. • With full support of the Commonwealth, ODL is in full swing at NUL in the Institute of Extra Mural Studies (IEMS). • The commercialization of research interventions to create jobs for the nation

The University is also enhancing communication and sharing of information via an Intranet system named THUTO, the website and social media platforms and, the expansion of Wi-Fi Networks to the entire campus.

The Council on Higher Education’s on-going accreditation process has given NUL the impetus to modernize the undergraduate programmes

FACULTY

DEPARTMENT/SUBJECT AREAS

Officers of NUL and Metropolitan Lesotho tour the yogurt factory established with funds from Metropolitan Lesotho

to not only fit the job market but also to produce job creators. The impressive volume of applications for NUL’s postgraduate programmes by international candidates joining the Masters and PhD levels is a significant plank of focus as reflected in the NUL Strategic Plan 2015-2020. There are a number of innovative projects that staff and students are engaged in with various stakeholders, aimed at advancing Lesotho’s development. Projects such as; • The Annual Science and Technology Innovation Expo showcases NUL research and innovative projects by staff and students. • NUL, with its Scientists won first prize at Bie-Cosmos Expo 2017 that was held in Kazakhstan for their brilliant locally designed solar thermal system. • Development of a unique product using Lesotho quartz by the Department of Chemistry and Chemical Technology and its partners like Lesotho Funeral Services • The development of short programmes on Executive Education and a leadership skills programme for female graduands COMMUNITY LIAISON AND RESEARCH NUL maintains a strong link with communities where knowledge research that is generated by the students often undertake their practicum or internships in all corners of the country as a way of extending knowledge of the University in various subject areas to all Basotho. Further, staff and students are continuously working on innovative projects with various companies to expand products and services for growing Lesotho’s future. NUL works closely with government, civil society and private sector to

NUL soccer team against University of Swaziland at the 2017 BOLESWA Intervarsity Games in Swaziland

assist with policy development and research to guide development of the country in all spheres. Some of the breath taking initiatives coming to the fore from staff and students of the University are; • The development of short programmes on sustainable renewable energy – soon to be upgraded to postgraduate offering • NUL is the first producer of yoghurt in Lesotho with fully functional large scale production factory • The NUL Legal Aid Clinic provides professional legal services to people from poor and disadvantaged groups in the community. The groups include the elderly, the disabled, children, prisoners; HIV and AIDS affected and infected individuals, women, and LGBTIS • NUL students, regularly engage with the Roma community by donating clothing, food parcels and cash to families, especially the sick people, the elderly and vulnerable children worst hit by poverty and natural disasters UNIVERSITY OF CHOICE The University endeavours to stay relevant through various efforts aimed at “Growing Champions and Enhancing Quality”. It is focused on teaching and learning; and dedicated to research and provision of community service. Providing quality education based on knowledgeable and highly qualified staff assures competitive and marketable graduates and leaders in their professions. The use of relevant technology drives programmes and research, thereby ensuring high quality and relevance in teaching and learning, research and scholarship and community service. In this context, NUL remains a University of Choice for all. Join us. NUL Agric students showing their biscuits manufactured at NUL

NUL Pharmacy students showcasing drugs mixtures

P.O. Roma 180, Maseru, Lesotho Tel: +266 22340601 Fax: +266 22340000 Email: info@nul.ls Website: www.nul.ls national.university.lesotho @nul_roma

Vision A vibrant African University, nurturing thought leaders.

Mission To advance human development and to respond to national and regional needs through knowledge creation, dissemination and community engagement, employing technologically innovative strategies.

Values Client-centredness Professionalism Ethical conduct Innovativeness Diligence Social empathy

NUL students accessing Wi-Fi from the academic zone

• Lesotho Youth Federation

School of the Built Environment (SOBE); School of Enterprise and Management (SEM); School of Engineering and Technology (SET) and School of Continuing Education (SOCE).

• Lesotho Cooperative Credit Union League (LCCUL)

• Lesotho National Federation of Organisations

A total of 537 students graduated from 21 programmes offered by Lerotholi Polytechnic in September 2017. The institution is in the process of developing a strategic plan to improve programmes offered and thus the quality of graduates produced.

of the Disabled (LNFOD)

LANFE provides literacy education as well as vocational skills and training to herd boys, other OVCs and their families, training of trainers in literacy and small business management, and empowerment of villagers in development and poverty reduction. Established in 1991, LNFOD provides support for disabled peoples’ organisations, empowering their members with life-skills, financial and material resources, and representing their needs to Government, development partners and society at large. Its membership consists of the Lesotho National Association of Physically Disabled (LNAPD), Intellectual Disability Association of Lesotho (IDAL), Lesotho National League of the Visually Impaired Persons (LNLVIP) and National Association of the Deaf in Lesotho (NADL). In 2017 the focus was on training 400 nonformal education teachers on effective teaching of functional literacy and numeracy, vocational practical skills and psycho-social life skills.

TECHNICAL & VOCATIONAL TRAINING Technical and Vocational Education Training (TVET) involves occupation and employmentbased education, designed to prepare learners for specific trades, crafts and careers, largely through practical learning and relevant theory to equip them to be competent to perform in their respective occupations in the labour market. Institutions offer a range of study fields from agriculture, basic handicrafts, home economics, hospitality, construction and engineering, to business, management and IT. TVET institutions are either publicly or privately EDUCATION & TRAINING 114

Government is currently focused on skills development, which requires reforming basic, secondary and TVET education curricula and introducing new market-oriented curricula at Higher Education Institutions. 2017 Graduation at Limkokwing University, Lesotho

owned formal schools, centres or institutions that offer informal, traditional apprenticeship and/or non-formal semi-structured training. Students who emerge from these institutions are awarded national or international certificates. TVET falls under the Department of Technical and Vocational Training (TVD) of the MoET. The TVD accredits TVET institutions, regulates their curricula, and inspects and assesses them through trade tests. It sets out to improve the quality of education and training through curriculum development; inspection and assessment; accreditation of programmes and institutions; administration of trade tests to determine skills proficiency; support in terms of provision of workshops and equipment, training of staff at TVET institutions and schools; and continual assessment of skills needs. The MoET has recently upgraded two TVET institutions, namely Lerotholi Polytechnic and the Lesotho College of Education (LCE).

HIGHER LEVEL EDUCATION The Council on Higher Education (CHE) promotes quality in higher education in Lesotho and ensures that all such institutions adhere to set standards and produce high calibre graduates who can contribute positively towards socioeconomic development.

CHE regulates Higher Education Institutions (HEIs) offering academic qualifications higher than COSC/LGCSE or equivalent, as opposed to technical and vocational training programmes. According to CHE’s latest report on HEIs in Lesotho, in 2016/17 there were 15 tertiary education institutions in the country. Private institutions comprise the Paray School of Nursing (PSN), Roma College of Nursing (RSN), Scott Hospital School of Nursing, Limkokwing University of Creative Technology (LUCT), Maluti Adventist College (MAC), Lesotho Boston Health Alliance (LeBOHA), and Botho University (BU). The eight public institutions are the Centre for Accounting Studies (CAS), Institute of Development Management (IDM), Lesotho Agricultural College (LAC), Lesotho College of Education (LCE), Lesotho Institute of Public Administration and Management (LIPAM), Lerotholi Polytechnic (LP), National Health Training College (NHTC), and the National University of Lesotho (NUL). Lerotholi Polytechnic began as a technical and vocational school over a century ago, and has transformed itself into an independent institution that provides quality TVET for the needs of Lesotho. The Polytechnic offers education and training programmes of between one and three years in its four schools, which comprise the

The mission of the Lesotho Institute of Accountants (LIA) is to develop, enhance and effectively regulate the accounting profession in Lesotho through the provision of internationally recognised education and training programmes, and it offers a range of technical services to support members. LIA’s mandate involves: • Determining the qualifications of persons for admission as members

• Providing for training, education and

examination by the institute or any other body of persons practising or intending to practice the profession of accountancy

• Setting the standards and rules governing the practice and ensuring that compliance with these is maintained

The Centre for Accounting Studies (CAS) was established in 1979 through a memorandum of understanding between the governments of Lesotho and Ireland in order to strengthen the accountancy profession in Lesotho, and provides tuition leading to the attainment of professional accounting qualifications in both the public and private sectors. LIA’s partnership with the Association of Chartered Certified Accountants (ACCA) enables it to offer the following internationally recognised qualifications: Technician Accountant, General Accountant and Chartered Accountant.

EDUCATION & TRAINING 115

Since 2007, CAS has partnered with Government to provide training to accountants in the public sector, and offers international qualification in public finance and accountancy under the umbrella of the Chartered Institute of Public Finance and Accountancy (CIPFA). Graduates under this programme are accountants specialising in public financial management and reporting. In 2013 CAS introduced a programme to train management accountants under the auspices of the Chartered Institute of Management Accountants (CIMA). Following accreditation by CHE in 2016, the programme was relaunched with support from the National Manpower Development Secretariat (NMDS). Demand for the programme is growing since CIMA graduates are fully recognised by the South African Institute of Chartered Accountants (SAICA). Furthermore, as global trends move towards localisation while maintaining global affiliation and quality standards, LIA has developed the Lesotho Professional Accountancy Programme (LEPAP) for both the public and private sectors with the support of the World Bank. The programme is being implemented with funding from the European Union, with CAS operating as LIA’s strategic partner. CAS aims to transform itself into a Business School of repute both locally and regionally, with a number of degree programmes in specialised areas having been lined up for introduction in the next few years. Complementing this agenda, CAS has a growing Business Development Unit (BDU) which provides short courses, consultancies and research tasks in the fields of governance, leadership, management, strategy, entrepreneurship, accounting, finance and business law. Universities Established on 8 April 1945, the National University of Lesotho (NUL) has over the years produced a number of renowned alumni who have served as corporate, social and political leaders both locally and internationally. While its main campus is situated at Roma, 34 kilometres southeast of Maseru, NUL has a physical presence in four districts with five campuses in total, and boasts EDUCATION & TRAINING 116

a student population of approximately 10 000. Communication and sharing of information is enhanced via an Intranet system named THUTO, a website and social media platforms, and the expansion of Wi-Fi networks. Some 2 235 students were awarded with degrees and diplomas at NUL’s 42nd graduation ceremony in October 2017.

There are a number of initiatives underway with input from various stakeholders, with the Annual Science and Technology Innovation Expo exhibiting innovative projects by NUL staff and students. The Expo in January 2018 is showcasing between 200 and 300 products ready to be commercialised and make a positive impact on the national economy.

NUL maintains a strong link with communities to improve livelihoods even in rural areas. The university works closely with Government, civil society and the private sector to assist with policy development and research to guide the development of the country in all spheres. Furthermore, NUL is strengthening existing partnerships with various stakeholders and University Alumni to advance research and academic programmes, provide a foundation for the future, and attract funders to sponsor programmes and facilities.

NUL has also established an Energy Research Centre (ERC), which is an all-inclusive centre for low-carbon research work (solar, wind, hydro, bio-energy), social engineering (energy policy, economics, finance & project management, climate change & environment, energy & gender), capacity building, consultancy and outreach programmes. It has multi-disciplinary scientists from diverse backgrounds working collaboratively towards achieving clean power generation, efficient use of energy and access to clean energy for all households. It will help in developing Lesotho’s human resource capacity by offering sustainable energy short courses as well as an MSc in Sustainable Energy, as of January 2018.

Central to the NUL Strategic Plan of 20152020 is the growth of academic programmes and student enrolment (from the current 10 000 to 18 000 by 2020), including on-campus student accommodation for not less than 50 percent of students. Other areas of focus include the upgrading and refurbishment of university premises, expansion of freely-accessible Wi-Fi, the furnishing of computer laboratories at the Roma and Maseru campuses, adoption of new technologies in teaching and research, and commercialisation of research interventions. As of August 2017, the Institute of Extra Mural Studies (IEMS) offers all first year programmes by the Open and Distance Learning (ODL) mode of delivery. An ODL policy has been developed to assist in guiding NUL in this new offering, and relevant self-instructional materials have been developed for learners. The distance education system is a highly cost effective solution to accommodate the growing demand for higher education and to achieve the objectives of ‘Education for all’ with parity in standards between conventional and distance education.

The Lesotho Agricultural College (LAC) was established in 1964 and merged with the Faculty of Agriculture at the NUL in 2000. With two campuses, one at Maseru and the other 100 kilometres north of the capital, the college trains extension staff at certificate level (two years) or diploma level (three years) in areas such as agriculture, agricultural mechanisation, home economics, forestry and natural resources management. A Diploma in Agricultural Education is offered jointly by LAC and NUL. NUL offers a four-year Bachelor of Science in Agriculture degree, a two-year Master of Science in Agriculture degree, and PhD degrees in the areas of Soil Science, Crop Science, Animal Science and Agricultural Economics and Extension. With its main campus in Malaysia, Limkokwing University of Creative Technology (LUCT) is a private international university boasting a presence across three continents. In excess of 30 000 students from more than 150 countries study in its 12 campuses in Botswana, Cambodia, China, Indonesia, Lesotho, Malaysia, Swaziland, United Kingdom and Sierra Leone, to mention but a few. The Lesotho campus of LUCT was launched on

15 October 2008 and is located in Maseru. The occasion marked the first entry of a Malaysian university into Lesotho and the establishment of Limkokwing’s second campus in Africa. LUCT Lesotho offers transformational curricula under the TVET model, enabling students to get the best academic qualifications as well as experience a variety of activities that will develop their talents through industry-related projects as well as extra-curricular involvement. Harnessing the potential of smart technology to help students gain a global perspective, LUCT focuses on empowering graduates with cutting-edge skills to tap into new opportunities and fuel the creative industries. Limkokwing is recognised by a leading UK accreditation body which recently conferred the accolade of ‘Global TVET Model University’ upon the university. LUCT held its seventh graduation ceremony on 28 September 2017, with 791 graduands receiving honours and associate degrees. These came from the faculties of Communication Media, Broadcasting (155); Business Management, Globalisation (290); Information and Communication Technology (74); Design, Innovation (71); Creativity in Tourism and Hospitality (171); and Architecture and the Built Environment (30). The university’s industry-centric portfolio of programmes is beginning to shape, develop and transform the national business environment in Lesotho through a number of significant collaborations. As a strategic partner of the Government of Lesotho, and particularly the MoET, LUCT has over the past nine years worked to create a new tertiary education landscape for the country. The campus has grown to a community of around 3 250 students, and had by the end of 2017 produced some 5 590 graduates. The Limkokwing Entrepreneurship Acceleration Platform (LEAP) is designed to accelerate entrepreneurial growth among graduates, with students learning skills such as entrepreneurship, business innovation, strategic and innovative thinking, leadership, teamwork and hands-on creative skills.

Useful Information Facts and figures Population – 2.008 million (2016 National Census) People – Basotho, singular Mosotho Official Languages – English and Sesotho Religion – Christian; other traditional beliefs Land Area – 30 355 square kilometres Highest point – Thabana Ntlenyana: 3 482 metres Lowest point – Junction of the Senqu (Orange) and Makhaleng rivers: 1 388 metres Time zone – GMT plus two hours Weights & Measures – Metric system Electricity Supply – 220V alternating current Dialling Code – International code + 266

Climate Summers (November to January) in Lesotho are hot, with temperatures reaching 30°C (86°F) during the day although the nights are much cooler. There is a likelihood of cloudy and rainy conditions and localised thunderstorms between October and March, which is the rainy season. Winter (May to August) brings snow to the Maloti Mountains and occasionally to the lowlands, with crisp, clear days. Temperatures often drop below freezing – as low as -16°C (3°F) on a winter’s night. Annual rainfall ranges from 500mm per year in the Senqu Valley to about 1 000mm annually in the mountainous northern and eastern border regions. As the weather is unpredictable, and can change rapidly during the day at any time of year, it is advisable for travellers to take precautionary measures, especially when hiking. Clothing Light clothing such as T-shirts and shorts are adequate during the summer, but raincoats are a necessity. Warmer clothing, such as long trousers and jacket/ jerseys, is necessary in Spring and Autumn, particularly in the evenings. During winter – or at any time in the mountains – warm clothing, including an anorak, is essential. Health requirements Lesotho’s high altitude means that it is free from malaria. A valid certificate is needed for tourists coming from countries where yellow fever and cholera are endemic. While there are good facilities at Maseru’s Queen ‘Mamohato Memorial Hospital, serious medical conditions may require treatment at a hospital in neighbouring South Africa. Safety Lesotho is a safe destination, and the people are

friendly and welcoming. While crime does exist in some of the larger towns, where the usual precautions should be taken, it is not a widespread problem.

Money Lesotho’s standard unit of currency is the loti (plural maloti, symbol M), which is equivalent to the South African rand (which is also legal tender in Lesotho) and is divided into 100 lisente (singular ‘sente’, symbol ‘s’). Notes comprise M200, M100, M50, M20 and M10; coins comprise M5, M2, 50s, 20s, 10s and 5s. Travellers’ cheques and most credit cards may be used in Lesotho. There are no restrictions on the amount of money tourists may bring into the country. Banks Lesotho’s three commercial banks comprise Standard Lesotho Bank, Nedbank and First National Bank, which all have ATMs and offer exchange services in their main Maseru branches. Standard and First National banks have branches and ATMs in all of Lesotho’s ten districts, while Nedbank is represented in all districts except for Quthing, Qacha’s Nek, Mokhotlong and Thaba-Tseka. Hours of business Normal banking hours are Mondays to Fridays 08:30 - 15:30, Saturdays 08:30 - 12:00. Most shops are open Mondays to Fridays 08:00 - 18:00, Saturdays and Sundays 09:00 - 13:00. Government offices are open Mondays to Fridays 08:00 - 12:45 and 14:00 - 16:30. Embassies & consulates Embassies and consulates situated in Maseru include: China (tel 22 316 521); Denmark (tel 22 316 937); Netherlands (tel 22 312 114); South Africa (tel 22 225 800); USA (tel 22 312 666). Visas Visitors must have a passport that is valid for six months beyond the intended length of stay. Visas are required, except for citizens of countries which have visa abolition agreements with Lesotho and citizens of some Commonwealth countries. Please confirm with Lesotho’s embassies abroad. Online visa applications An eVisa may be obtained by submitting the necessary personal information and paying the requisite cost by either MasterCard or Visa. Applicants are no longer required to schedule appointments at the Embassy or Consulate. For more information please visit: http:// evisalesotho.com/

Customs regulations The following items and quantities to a total value not exceeding M500.00 per person are allowed under rebate duty: • 2 litres of wine, 1 litre spirits or other alcoholic beverages • 200 cigarettes, 250 grams pipe tobacco, and 20 cigars • 50 millilitres perfume Any excess is charged import duty at a flat rate of 20 percent. Prohibited and restricted goods include counterfeit coins or notes; dangerous weapons; blasphemous material; indecent or obscene works or articles of an inflammatory nature. Visitors from Botswana, Namibia, South Africa and Swaziland are not permitted to bring liquor into Lesotho. Customs officers and members of the police force give highest priority to drug detection and the legal penalties for drug trafficking are severe. Domestic pets, livestock, seeds, bulbs, plants and trees may not be imported without payment of customs and sales duty and are subject to quarantine restrictions. Permits may be obtained from: The Principal Secretary; Ministry of Agriculture & Food Security; PO Box 24; Maseru 100; Lesotho. Border posts Most people who visit Lesotho enter the country from South Africa via one of the 11 border checkpoints: Caledonspoort 06:00-22:00 Maputsoe 24 hours Makhaleng Bridge 08:00-16:00 Maseru Bridge 24 hours Peka Bridge 08:00-16:00 Qacha’s Nek 08:00-20:00 Ramatselitso’s Gate 08:00-18:00 Sani Pass 08:00-16:00 Sephapho’s Gate 08:00-16:00 Tele Bridge 08:00-22:00 Van Rooyen’s Gate 06:00-20:00 Road transport Cars travel on the left hand side of the road and the use of seat belts is compulsory. The speed limit on national highways is 80 km/hour and in urban or built up areas 50 km/hour. Drivers’ licences issued in most countries are valid in Lesotho for a period of up to six months, provided they are printed in English or are accompanied by a certified translation. International driving permits are also recognised. While much of the road network consists of good, tarred roads, fourwheel-drive vehicles are needed in mountainous areas such as Mokhotlong. Many South African car rental firms have branches in Maseru. Distance table Tarred roads connect the capital Maseru to various main centres in the southern African region.

Maseru to Durban (South Africa) – 600 km Maseru to East London (South Africa) – 583 km Maseru to Port Elizabeth (South Africa) – 738 km Maseru to Cape Town (South Africa) – 1 165 km Maseru to Johannesburg (South Africa) – 455 km Maseru to Bloemfontein (South Africa) – 155 km Maseru to Gaborone (Botswana) – 630 km Maseru to Mbabane (Swaziland) – 635 km Air transport Lesotho has one international airport, Moshoeshoe I International Airport (tel 52 500 759) near Maseru. There are also 12 airstrips providing access by air to rural and mountainous areas. SA Airlink (tel 22 350 418/9) offers up to five flights per day to OR Tambo International Airport in Johannesburg. Public holidays 2018 New Year’s Day Moshoeshoe’s Day Good Friday Easter Monday Workers’ Day Ascension Day Africa/Heroes’ Day King Letsie III’s Birthday Independence Day Christmas Day Boxing Day

01 January 11 March 30 March 2 April 01 May 10 May 25 May 17 July 04 October 25 December 26 December

Public holidays 2019 New Year’s Day Moshoeshoe’s Day Good Friday Easter Monday Workers’ Day Africa/Heroes’ Day Ascension Day King Letsie III’s Birthday Independence Day Christmas Day Boxing Day

01 January 11 March 19 April 22 April 01 May 25 May 30 May 17 July 04 October 25 December 26 December

Useful words & phrases in Sesotho Hello (singular) – Khotso (literally ‘peace’) or lumela Hello (plural) – Khotsong or lumelang Welcome (singular) – Kena ka kgotso (singular) Welcome (plural) – Kenang ka kgotso (plural) How are you? – U phela joang? Excuse me – Ntshwarele Thank you – Ke a leboha Goodbye – Tsamaea hantle Help! – Thusa! No – Tjhee Yes – Ee Please – a kopo / ako.../...hle What is the time? – Ke nako mang? What is your name? – Lebitso la hao ke mang? My name is – Lebitso la ka ke How much is this? – Ke bokae? Why? – Hobaneng? USEFUL INFORMATION 117

Map of Lesotho

MAP OF LESOTHO 118

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ÂŠ Anne Wade

Alliance Insurance - 90 Avis Budget - 48 Central Bank of Lesotho - 80 Department of Civil Aviation - 50 Department of Energy - 69 Directorate on Corruption and Economic Offences - 15 Econet Telecom - 75 & 77 G4S Security - 23 Husteds Pharmacy - 105 Independent Electoral Commission - 5 Kayhil Freight - 49 Land Administration Authority - 11 Leo Internet Service Provider - 72 Lesotho Communications Authority - 73 Lesotho Electricity Company - 67 Lesotho Funeral Services - 12 Lesotho Highlands Development Authority - 60 Lesotho Highlands Water Commission - 59 Lesotho Meteorological Services - 40 Lesotho National Development Corporation - OBC Lesotho National Insurance Group - 89 Lesotho Petroleum - 51 Lesotho PostBank - 83 Lesotho Revenue Authority - 7 Liberty Life - 9 Limkokwing University -115 Makoanyane Military Hospital - 106 Metolong Authority - 64 Metropolitan Lesotho - IFC MGC Properties - 55 Ministry of Health - 102 Moores Rowland - 92 Morija Arts - 35 National University of Lesotho - 113 Nedbank - 87 Public Officersâ&#x20AC;&#x2122; Defined Contribution Pension Fund - 96 Puma Energy - 120, IBC Roma Trading Post Lodge - 31 R L Consulting - 88 Specialized Insurance Company - 93 Standard Lesotho Bank - 85 Thaba Bosiu Risk Solutions - 95 Vision Clinic Optical Lab - 109 Zenith Horizon Insurance - 98

INDEX TO ADVERTISERS 119

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Rainbow trout farmed at Katse Dam

Diamond mining – Letseng’s Promise Diamond

Textile manufacturing

Since its establishment in 1967, LNDC has been the Lesotho Government’s pivotal industrial investment promoter: LNDC is intensifying and diversifying its efforts to attract a wider spectrum of investors with the objective of considerably expanding the industrial base and increasing job creation through the three-way strategies of export promotion, import substitution and vertical integration. The purpose of the Corporation is to initiate, promote, and facilitate the development of manufacturing and processing industries, mining and commerce in a manner calculated to raise the level of income and employment in Lesotho. LNDC also encourages and develops indigenous entrepreneurship. To find out more, contact: The Chief Executive Officer, LNDC, Private Bag A96, Maseru 100, Lesotho Tel (+266) 2231 2012 • Telefax (+266) 2231 0038 • E-mail: info@lndc.org.ls • Website: www.lndc.org.ls