A major development project in Lesotho, backed by the United States and worth around R6 billion (6 billion Maloti), is on the verge of being shut down—putting thousands of jobs and community plans in jeopardy.
The initiative, known as the Lesotho Health and Horticulture Compact, was launched in 2023 through the US-funded Millennium Challenge Corporation (MCC). It was designed to benefit an estimated 2.5 million people over the next two decades and create more than 90,000 jobs—both directly and indirectly—within the first five years.
The Compact focused on three key areas:
- A $75.4-million health project aimed at improving primary healthcare, upgrading medical data systems, and supporting maternal health and HIV/AIDS treatment.
- A $118.6-million food production project to boost rural incomes and food security by investing in irrigation.
- A $62-million small business project, with a special focus on empowering women and young entrepreneurs.
Under a 2022 agreement between MCC and the Government of Lesotho, the US pledged $300 million, while Lesotho agreed to contribute just over $22 million. An agency called the Millennium Challenge Account (MCA) was set up locally to manage the implementation.
But now, after just a year in motion, signs are pointing to a shutdown.
Both the MCA and the Lesotho government have stayed quiet about what’s really going on, even as other US-funded projects in the country are closing. Still, documents seen by GroundUp suggest that the Compact is indeed being wound down.
When asked for comment, Limpho Maema, acting CEO of MCA Lesotho, said only that discussions were underway between MCC and the government. A formal announcement would be made once a final decision was reached.
Lesotho’s Foreign Affairs Minister, Lejone Mpotjoane, passed all questions to Finance Minister Retselisitsoe Matlanyane, who said she was unavailable and out of the country.
Meanwhile, people working on the project have already been informed of its likely closure. In an internal email, Maema said: “Regrettably, the determination is that the Lesotho Health and Horticulture Compact will be closing.”
Another message from Maema to contractors confirmed that services would continue only until a firm shutdown date was finalized.
The project involved a wide range of specialists—from engineers and business consultants to IT technicians and gender experts. One major contractor, Cowater International (a Canadian firm), had a $21-million deal to help grow small businesses. Staff there have already been told to return laptops and other equipment, and to begin wrapping up operations.
In one internal email, Cowater’s Project Manager Antoinette Albisetti instructed her team to bring all gear back to the office and prepare to shut down by month-end.
According to the Compact agreement, any unused funds must be returned to the MCC.
For communities like Phamong in Mohale’s Hoek, where part of the horticulture project was meant to take root, the news has been devastating. Local villager ‘Maamohelang Tomo, who was on a committee verifying land ownership for the project, said communication abruptly stopped in January.
“We were told to stop working, and since then, we’ve heard nothing,” she said.
Tomo and her team had already met with landowners and secured agreements to release fields for the project. The next step was supposed to be building access roads and irrigation systems—work that is now on hold indefinitely.
“This shutdown would be a serious setback,” Tomo said. “We’d all made plans around the income we were expecting from this work. Now the community is looking to us for answers, but we don’t have any. We’re completely in the dark.
