Country Office Contacts
Main Office Contact
+266-22-21-7000

In Lesotho:
Macmillan Anyanwu
Senior Operations Officer
+266-22-217000/1/7

Lesotho Liaison Office
UN House, Number 3 United Nations Road, Europa
Maseru, Lesotho
manyanwu@worldbank.org

In Washington:
Ivan Velev
Country Program Coordinator
+1-202-473-0814

1818 H Street, NW
Washington, DC 20433
ivelev@worldbank.org

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Lesotho Overview

Lesotho is a small landlocked country, completely surrounded by the Republic of South Africa. With a population of about two million people, the country is 30,000 sq. km, just about the size of Burundi. Lesotho’s highlands constitute two-thirds of the country’s territory, less than 10% of which is suitable for cultivationLesotho became independent in 1966. As a constitutional monarchy, Lesotho is ruled by a king and governed by a 33-member Senate and a 120-member National Assembly. After nearly 40 years of turbulent political history, the people of Lesotho (the Basotho) finally witnessed a peaceful transition of power from Prime Minister Pakalitha Mosisili to a new prime minister – Thomas Thabane. Thabane was sworn in as prime minister on June 8, 2012, becoming the leader of a coalition government formed by the four major opposition parties - the All Basotho Convention (ABC), the Lesotho Congress for Democracy (LCD), the Basotho National Party (BNP) and the Popular Front for Democracy (PFD) - which controls 71 out of the 120 parliamentary seats.  

Economic growth remained resilient in the face of the global financial crisis.

Gross domestic product (GDP) grew 4.7% in FY09-FY10, 6.8% in FY10-FY11 and 5.4% in FY11-FY12, driven mainly by public investment. However, textile and diamond exports fell significantly as did employment in these sectors from FY08-FY09 to FY09-FY10. Remittances from mine workers working in South Africa also declined. As a result of a very sharp decline in SACU transfers, the fiscal balance deteriorated from 8.2% of GDP in FY08-FY09 to -10.3% of GDP in FY11-FY12, and the current account also worsened significantly. International reserves fell from 5.3 months of imports in FY09-FY10 to 3.4 months in FY11-FY12.

In FY12-FY13, economic growth weakened owing to slower growth in textile and agriculture production. On one hand, growth of the textile industry slowed down owing to the uncertainty of the renewal of the African Growth and Opportunity Act (AGOA), prior to the decision for the extension in August 2012. Furthermore, a major drought in 2012 reduced crop production by over 70%. On the other hand, there was an increase in construction activities (with large investments in infrastructure, housing, and mines) and mining production. Private sector credit increased by 39% on annual basis, albeit from a low base. Inflation declined from 7.2% in FY11-FY12 to 5%, reflecting moderation in international commodity prices. The Loti, pegged to South Africa’s rand, has been depreciating against the US dollar (by almost 20% over the past year). Its impact in domestic prices has been modest since Lesotho imports most of its goods from South Africa.

The fiscal balance, after almost four years, returned to positive territory during FY 2012/13. The fiscal balance reached 5.2% of GDP at the end of the last fiscal year, mostly attributed to an expected doubling of SACU receipts and an under-execution of capital spending. Drought related expenditures did not affect budget execution since it was finance by reshuffling of funds and foreign assistance.

In the last six years Lesotho’s manufacturing sector’s relative contribution to GDP declined from 20.1% in 2004 to 11.4% in 2010 as a result of stagnation in the textile and garments sector, due to the global economic crisis and the rapid growth in other sectors, notably mining. Textile producers have struggled in recent years to compete with low-cost Asian producers. They have been further hampered by a strong exchange rate and by withdrawal of the SACU duty rebates for imported raw materials. The Lesotho loti is pegged at par to the South African rand, which is also a legal tender in the country.

Development Challenges

Lesotho has undergone political and economic changes over the last two decades. The political system has evolved towards open and competitive elections. The economy has grown at an annual rate of 3% in per capita terms, which, though modest for its income level, compares well with the rest of the SACU region and the African continent and small states. The economy has been able to adapt itself to new realities and has taken advantage of new growth opportunities. The changes have involved shifts from subsistence agriculture and remittances toward mining, water exports, manufacturing exports, and services.

The country now finds itself at a crossroads– requiring new engines of growth, a more streamlined role of the state, emergence of a dynamic private sector, and far stronger presence in the South African market. Public spending, having grown from 45% of GDP in 2004/05 to about 62% in 2011/12, is unsustainable and can no longer be relied upon to drive growth. Effectiveness of public spending has also been low, moderating its effect on growth and social outcomes. If anything, the fiscal consolidation needed to fully restore macroeconomic stability would weigh on future growth, especially if not matched by enhanced effectiveness of spending and service delivery institutions. The burden then has to be picked up by the private sector, which at the moment is small and weak, having insufficiently absorbed the benefits of the large FDI inflows and public expenditure programs of the past decade.

Economic growth has not been adequately inclusive, resulting in high concentration of poverty in rural areas, persistent high levels of inequality, and widespread unemployment. Unemployment stood at 24% in 2008, among the highest in the world. Only 230,000 of the 608,000 employed people engage in formal wage employment. The rest are in informal activities, and they are often paid in-kind. Preliminary Government’s estimates based on the 2010/11 Household Budget survey show that the national poverty head count rate stood at 57.1% and the Gini Coefficient based on consumption stood at about 0.53. Both these figures are virtually the same as those obtained in the 2002/2003 Household Budget survey. However, by comparing the 2002/03 figures with those from 2010/11, poverty has decreased in urban areas while poverty has increased in rural areas. Poverty is concentrated in rural areas that, despite poor soil quality and rainfall, remain home to about three quarters of the population, indicating underutilization and misallocation of labor resources. The critical challenges of inclusive growth, a sustainable and effective public sector, and access to quality service delivery define Lesotho’s core development agenda.

About 70%-80% of Lesotho’s people live in rural areas, and more than three-quarters of these are engaged in agriculture – mostly traditional, low input, low output, rain-fed cereal production and extensive animal grazing. In the past, remittances from mineworkers were a major source of rural livelihoods, providing vital cash needed to purchase agricultural inputs and productive assets or to invest in household assets and housing, but remittances have declined steadily over the past decade as competition for jobs in the South African mining sector has intensified. The rural economy in general and agriculture in particular will continue to play a major role in Lesotho’s development strategy for the foreseeable future, due to the limited ability of the urban economy to absorb new labor market entrants.

The Lesotho government regards HIV/AIDS as one of its most important development issues, and the government is addressing the pandemic through its HIV/AIDS National Strategic Plan (NSP). Lesotho has the third highest HIV rate among adults in the world, at 23.6%. Life expectancy at birth has declined by more than 20 years to 41 years over the past decade. In 2009, annual new infections were estimated at 21,000 with 60 people newly infected and 40 people dying each day as a result of HIV/AIDS.

According to the 2009 estimate, 290,000 people are living with HIV, 28,000 of them children. Lesotho has a continuously growing number of Orphans and Vulnerable Children (OVC). There are more than 200,000 OVC, 67% of which are AIDS orphans. Overall, coverage of some key HIV/AIDS interventions has improved, including prevention of mother-to-child transmission (PMTCT) and antiretroviral therapy (ART). PMTCT coverage increased from five% in 2005, to 31% in 2008 and 81% in 2010. ART rollout has made good progress with 58% of the estimated HIV-positive population receiving ART at the end of 2011, a total of 62,190 adults and children.

Because of rugged mountain terrain, steep slopes abundance of water and high elevation, Lesotho is prone to natural disasters such as rockslides and floodingBetween December 2010 and February 2011, Lesotho was hit by severe weather which led to floods, run-off from hill slopes, and rock slides. In the lowlands, the accumulated rainfall over this period was the highest since records began in 1933. The rains were accompanied by strong winds and hailstorms. The storms resulted in significant damage to roads, housing, schools, and crops. The total value of the damages is estimated to be around US$66.1 million, or 3.2% of Lesotho’s GDP.

Development Strategy: Lesotho’s vision

The Lesotho government’s development goals are reflected in its “Vision 2020” and the National Strategic Development Plan (NSDP) approved in March 2012. In 2002, Lesotho issued “Vision 2020” to articulate its long-term strategic priorities so that by 2020: “Lesotho shall be a stable democracy, a united and prosperous nation at peace with itself and its neighbors. It shall have a healthy and well developed human resource base, a strong economy, a well-managed environment and an established technological base.”

In his inaugural speech, Prime Minister Thomas Thabane affirmed his commitment to maintain the current strategic direction of the government’s economic development program as articulated in the Vision 2020 and the National Strategic Development Plan (NSDP) documents. The NSDP, which serves as the implementation strategy for the National Vision 2020, re-affirms the government’s commitment to the objectives of fiscal consolidation, economic diversification, infrastructure and human development. The NSDP sets the following strategic goals; pursue high, shared and employment generating economic growth, develop key infrastructure, enhance the skills base, technology adoption and foundation for innovation, improve health, combat HIV and AIDS and reduce vulnerability, reverse environmental degradation and adapt to climate change, and promote peace, democratic governance and build effective institutions.

Last updated October 2013

The World Bank’s support to Lesotho is based on the Country Partnership Strategy (CPS) (2010-2014) was prepared in consultation with government, civil society, private sector and other development partners and approved by the World Bank’s Board of Executive Directors in May 2010. The Bank’s current program in Lesotho is aligned with the strategic priorities articulated in the Vision 2020 and the National Strategic Development Plan (NSDP). The CAS seeks to support Lesotho in addressing its immediate challenges while laying the foundation for sustained, long-term growth. Specifically, the Bank is assisting the government in addressing its short-term needs to deal with the consequences of the sharp decline in South African Customs Union (SACU) receipts and improve social development indicators. It is also working with the government on the longer-term goal of enhancing competitiveness and fostering private sector–led growth.

To achieve these objectives, the CPS is focused on three areas of engagement; fiscal adjustment and public sector efficiency, human development and improved service delivery, and economic diversification and improved competitiveness. Capacity development is a cross-cutting theme of the CPS and is embedded in all Bank-financed activities in Lesotho. The Bank has completed the mid-term review process for the CPS, with a view to reassessing the relevance of the current strategy of the Bank in Lesotho, capturing the implementation experience and the results achieved so far. The findings of the review are that the CPS program remains relevant to support the government’s priorities as set out in the 2012/13 – 2016/17 National Strategic Development Plan (NSDP). The CPS Progress Report (CASPR) was finalized and approved by the Board in April 2013.

World Bank Group Portfolio

Overall, the size of International Development Association’s (IDA) portfolio in Lesotho has been relatively stable, after a 40% increase in net commitment between FY09 and FY10. As of September 27, 2013, the portfolio comprised five IDA-funded projects and one Global Partnership on Education (GPE) grant, with a total net commitment of about US$123.5 million. The bulk of IDA financing is for infrastructure development; transport, water, and urban development.

In corporation with the International Fund for Agricultural Development (IFAD), IDA is also funding projects in the social sector of the economy, health, HIV/AIDS, private sector development and agriculture. IDA has also been providing direct budget support to the Lesotho government through a series of Poverty Reduction Support Credits (PRSCs). The PRSC series supports the economic and governance reform efforts of the government by creating the enabling environment and the right policy framework for the successful implementation of the National Strategic Development Plan. The Bank is currently developing the new series of PRSC with the government and other development partners.

The IDA portfolio is supplemented by several grants. A trade facilitation grant agreement was signed with the Lesotho, which will help to stimulate trade with South Africa – Africa’s largest economy – by streamlining border procedures. It will also increase economic competitiveness and attract investments, providing Lesotho with land-linking opportunities that are critical for achieving job-creating growth. A multi-donor Global Partnership for Education (GPE, formerly Education for All Fast Track Initiative) Catalytic Fund Grant administered by IDA supports primary education, by building schools in rural areas, providing rural teacher incentives, training and textbooks, and supporting pre-primary reception classes.

The new Maternal and Newborn Health Performance Based Financed project has been prepared and signed between Government of Lesotho and the Bank. In addition to the New Hospital Public Private Partnership (PPP), the IFC is acting as lead transaction advisor on four PPP projects for Lesotho.  These transactions include developing PPP projects for facilities management, ICT and telemedicine in 168 public health facilities, developing PPP for health care waste management, development of five tourism PPP projects, development of PPP framework for tourism sector and streamlining the tourism licensing process; and to undertake feasibility study of three wind energy sites in Lesotho, and if feasible, to package these as PPPs for development and financing by a private operator. The Multilateral Investment Guarantee Agency (MIGA) is not active in Lesotho.

Partners

Fifteen development partner agencies are active in Lesotho. Donor coordination, alignment and harmonization have improved since the formation of Development Partners Consultative Forum in 2005, which is co-chaired jointly by the United Nations Development Program (UNDP) and Irish Aid. All development partners are members of the Development Partners Consultative Forum (DPCF), which includes the World Bank.

The overarching objective of the Development Partners Consultative Forum is to increase level and frequency of communication and promote transparency between the development partners and the government. The forum seeks to improve aid coordination, promote harmonization and support the government in ownership of development processes as envisaged in Paris Declaration (PD) and Accra Agenda of Action (AAA). Donor development strategies in Lesotho are generally aligned with the government’s priorities as set out in National Strategic Development Plan (NSDP).

The World Bank has built successful partnerships with a range of donors, such as the joint- financed Integrated Transport Project with the European Commission, the Smallholder Agriculture Development Project with the International Fund for Agricultural Development, and the Metolong Dam and Water Supply Program with the U.S. Millennium Challenge Corporation, the European Investment Bank, the Arab Bank for Economic Development in Africa, the OPEC Fund for International Development, the Kuwait Fund, the Saudi Fund, and the Republic of South Africa. The World Bank’s HIV/AIDS Technical Assistance Project, a US$5 million grant, helps to fill the capacity gap impeding implementation of the National Strategic Plan for HIV/AIDS. The Bank mobilized Fast-Track Initiative (FTI) grant resources and partnered with Irish Aid to create the first pooled fund in the education sector. The Bank manages the implementation of grants from FTI and Irish Aid jointly.

Last updated October 2013

Private Sector Development

The Bank has supported the Government of Lesotho (GoL) priority of increasing private sector competitiveness and economic diversification. The Bank is currently financing the US$8.10 million Lesotho Private Sector Competitiveness and Economic Diversification Project (PSCED). The project, approved by the Board in March 2007, supported the government on a range of issues that help to improve the business environment and access to infrastructure and basic services, develop the financial system and promoting access to finance, promote the creation of a strong, dynamic, competitive, and innovative private sector; and, promote the priority sectors, broadening entrepreneurship, and creating jobs in agriculture, tourism and manufacturing. The project completion date was June 30, 2013. 

There has been substantial progress made on business environment reforms and improving economic diversification. As part of the project, the Companies Act was prepared and implemented in May 2012, the first since 1967. The Act finalized company regulations and supported the successful launch of the company registry. Trading enterprises regulations have been ammended, approved and published and came into full operation in April 2012. The Industrial Licensing Bill has been drafted and presented to Parliament for approval. The Financial Institutions Act, which includes legislation on leasing, has been passed.

With a view to diversify the economy, the project has supported two Skills Development Centers to help train unemployed workers demonstrating that unskilled workers can be employed through training. Further, the horticulture pilots have proved that high quality fruit yields can be produced in rural Lesotho with a harvest season that is a few weeks earlier than South Africa, implying promising price advantages for Lesotho fruit exports. Achievement in supporting the tourism industry includes the establishment of the World Hotel Link (WHL) online reservation portal, which has 28 tourism establishments and the participation of two tour operators, as well as support to the Lesotho Tourism Development Corporation (LTDC) on tourism promotion and marketing, adoption of a tourism concessions manual and helping to facilitate concession contracts for major tourism assets. Finally, the Lesotho Enterprise Assistance Program (LEAP) matching grant scheme has supported 168 firms and private sector associations. Most of the beneficiary firms reported substantial growth in sales and employment. This project closes in June 2013. At the request of government, a follow up PSC II project is currently under preparation. The negotiations of PSC II between Government of Lesotho and the Bank took place on September 16 -17, 2013. The project is to be presented to the World Bank Board of Directors on October 31, 2013.

Education

Lesotho’s education system has achieved substantial gains in recent years, but much remains to be done. After introducing free primary education in 2000, the primary net enrollment rate (NER) rose from 60% in 1999 to 81% in 2009, among the highest in Sub-Saharan Africa. However, it has remained stagnant at that level for the past few years. At the same time, Lesotho has achieved gender parity in primary education. Approximately 49% of primary school students are female and more than 50% of secondary school students are female. The transition rate between primary and lower secondary education is also high with 81% of primary students advancing to secondary education. Learning outcomes as measured by the Southern and Eastern African Consortium for Monitoring Education Quality (SACMEQ) results are below the average in the sub-region, but have o begun to improve: from 2000-2007 SACMEQ reading scores rose from 451.2 to 467.9, while SACMEQ math scores rose from 447.2 to 476.9.

Lesotho has also made advances in other areas such as in Early Childhood Development (ECD) with the establishment of 240 pre-primary reception classes for the poorest children and training of care givers. Enrollment in secondary education has increased with the construction of 20 new secondary schools (in 2009 and 2010) and the establishment of combined schools. An electronic teacher management system is being introduced. As a consequence, primary education teachers are already being paid on time. Lesotho is now focusing on improving the quality of basic education through introduction of a new curriculum for early grade reading and math, while focusing on a skills development agenda for post-basic education levels. The new education sector plan is expected to focus on skills development.

For the past four years, the Bank has been working closely with the Global Partnership on Education (GPE), Irish Aid, and the local donor group to improve in-country donor harmonization. As part of this harmonization effort, the Education Sector Strategic Plan 2005-2015 was updated in 2009 and Lesotho benefited from a (the third) GPE Fund grant, for which implementation is once again being supervised by the Word Bank. The agreement for this US$20 million grant was signed in August 2010, and it is currently under implementation. The funds from this grant are pooled with a US$6.8 million grant from Irish Aid, which created the first pooled fund in the education sector of Lesotho. This project includes an impact evaluation of a teachers’ incentive scheme which data has just been collected. The Bank has also carried out two surveys on education, skills and employability (household and employers surveys), and is finalizing a report on education, skills development and equity in the country which is informed by the results of the surveys. The report is expected to contribute to the revision of the education sector plan and for further reform in post-basic education.

Water Sector

Water is one of Lesotho’s most important renewable assets and central to the country’s long-term growth prospects. The sector contributes roughly eight% to the overall gross domestic product (GDP), a large portion of which is derived from revenues associated with the Lesotho Highlands Waters Project (LHWP). This will increase with development of Phase 2 and construction of the Polihali Dam, associated water transfer infrastructure and the Kobong pump storage scheme.

The agreement on Phase 2 of the LHWP, signed on August 12, 2011, includes provision for augmenting the water transfer to South Africa through construction of a new dam and transfer tunnel, and the development of a 1000MW pump storage scheme to generate electricity for the benefit of Lesotho using water from the Phase 1A Katse reservoir. The sharing of benefits under the LHWP is based on the lower cost of the project compared to alternatives in South Africa. The benefits are split between Lesotho (56%) and South Africa (44%), with South Africa saving on the lower cost and Lesotho benefitting from royalties, ancillary developments and hydropower. Royalties are based on a fixed portion paid over 50 years reflecting the lower capital cost for full delivery of 70 m3/s compared to the alternative Orange-Vaal Transfer Scheme and a variable portion due to the lower operation and maintenance, and electricity costs based on the volume of water delivered. Under Phases 1A and 1B water transfers are currently 18m3/sec and 12m3/sec of water.

The Bank continues to support the process toward implementation of the LHWP through analytical work and continued dialogue with a wide range of stakeholders in Lesotho and South Africa. The LHWP is one of the world’s most ambitious water transfer projects. Support to the Lesotho government dates back to the 1980’s, when the Bank was the executing agency on behalf of the government for United Nations Development Programme-financed design studies. Since then the Bank has provided US$165 million in support of the LHWP, including through the Lesotho Highlands Water Engineering Project (1986), which assisted the government in the design and preparation of the LHWP, and two loans for Phase 1A and 1B of the LHWP. Total revenues from water sales since November 1996 amount to over US$400 million with an additional US$90 million in electricity sales to the Lesotho Electricity Company and another US$1 million in sales to Eskom.

The Bank has also supported the government in its effort to capitalize on the development opportunities afforded by the countries abundance of water, high altitude and a geographically strategic location. Sustained Bank support to the water sector began in the late 1970s with support for the construction of piped water systems in seven small towns, serving about 50,000 inhabitants, which was complemented with measures to strengthen the Water and Sewerage Branch. Establishment of the Lesotho Water and Sewerage Authority (WASA) as an independent entity in 1991 and its subsequent strengthening has resulted in a decrease in unaccounted-for water from 40% to 30% and a 67% increase in the customer base (from 35,000 in 2004 to 55,000 today). The utility’s revenues have consistently covered its operational costs and meet its debt service requirements. However, a significant investment program, supporting a rapid increase in household consumers within the lower tariff band has compounded debt obligations placing the utility under financial strain. This is likely to be compounded with the operation of the Metolong Dam and water supply infrastructure over the next few years.

Phase 1 of the Water Sector Improvement Project (WSIP1) was the first of a two-phase program to continue the reforms and address national priorities in parallel to support for the LHWP. Phase 1 closed in July 2011. The US$14 million project has provided support to the office of the Commissioner of Water to lead water sector policy development, strategy setting, and coordination, and to support decision-making regarding a long-term solution to water supply for industrial growth and domestic use in the regularly water-stressed and rapidly growing Maseru area. The Water and Sewerage Authority has also supported capital investments, network extensions, a successful pilot peri-urban expansion program, and improvements in its systems and operational efficiencies, including support for a Performance Agreement between WASA and the Ministry of Finance.

Phase 2 of the Water Sector Improvement Project (WSIP2: US$38 million) is  supporting the Metolong Dam and Water Supply Program (MDWSP), which is a multi-donor partnership developed with the GoL over many years to realize an extensive infrastructure program in support of continued socio-economic growth. WSIP2 provides specific support to continued reforms in the sector, the water conveyance to the town of Teyateyaneng, and management of the environmental and social program for the MDWSP. The project is now supporting WASCo and the regulator to consolidated the financial position and improve the consumer confidence through improved service standards.

The Bank is also supporting an assessment   of  the potential transfer of water from the highlands of Lesotho to Botswana. This is being financed through the multi-donor trust fund for Cooperation in International Waters in Africa (CIWA) within the context of the Memorandum of Understanding signed by Botswana, Lesotho and South Africa in March 2013 under the auspices of the Orange Senqu River Commission (ORASECOM). Additional support through the GFDRR to a multi-sector assessment of climate change in Lesotho and through an Africa wide study of infrastructure related climate change risks in seven river basins across Africa is also helping to understand the potential impacts on the long term sustainable yields in the Lesotho Highlands, changes in water demand downstream, and the financial and macro-economic implications for Lesotho.

Transport Sector

Lesotho’s transport infrastructure development program largely concentrated its activities in the Lowlands strip that borders the Republic of South Africa, leading to a neglect of the basic access needs of populations that reside in the Mountains and other remote regions. This social exclusion has been identified as the underlying dynamic in the structure of inequality in the country today. The Integrated Transport Project (ITP), funded by the Bank, the EU and the Government of Lesotho, aims at improving transport network connectivity so that populations located in isolated rural areas will have more reliable access to basic services. This project has contributed to an increase in the length (shares) of roads in “good” and “fair” condition as a share of total classified roads. The percentage of roads classified as “good” has risen from 27% to 38%. This is set to increase further with the rehabilitation of the Nyenye-Mapoteng-Makhoroana Road, currently under design. The local population in Senqu-Senqunyane rivers area, estimated to be about 9,400 people of which about 51% are female, benefited from the World Bank-financed Senqu-Senqunyane civil works project. Average travel cost to social services and markets has been reduced from original 1,500 Maloti per trip to 900 Maloti in 2010. A Social Impact survey is currently ongoing and current data is expected during the second half of 2013. Share of rural population with access to an all-season road (within Senqu-Senqunyane project area) has reached the target of 42%.

In addition to improving access to basic services, the World Bank assistance to the transport sector is also helping link people in rural areas to markets, creating the legal and regulatory framework for effective roads management, strengthening the institutional capacity of relevant agencies in the sector, and creating employment for inhabitants of rural and urban areas. This has resulted in the establishment of a fully functioning Directorate for Roads to manage the newly established Roads Fund, which provides sustainable financing for routine and periodic maintenance of the road networks. This Directorate is the first of its kind in the history of the country and it followed the passage of the Roads Directorate Act by Parliament in March 2010 and the drafting of the Road Directorate Regulations. Twenty road safety workshops and campaigns have been undertaken; more than 700 government drivers have been trained, and the integration of road safety education into the school curriculum is on-going.

Health Sector

In 2010, the World Bank and the Lesotho’s Ministry of Health and Social Welfare concluded the Health Sector Reform Program, which achieved a sustainable increase in the access to quality preventive, curative, and rehabilitative health care services. The project targeted the huge imbalance between overcrowded government health centers and non-government health centers, the high cost of medical care, long distances to medical facilities in mountain areas, and insufficient numbers of health personnel, especially in rural areas. Specific results from the project include:

  • an increase in the tuberculosis cure rate from 52% to 72%
  • a decrease from 4.5 to three hours in average waiting time at the country’s largest hospital
  • an increase from nine to 136 in the number of facilities providing mother-to-child HIV transmission prevention
  • expanded coverage of the DPT3 vaccine;
  • an increase in the number of mothers who received ante-natal care from a health professional
  • an increase in the percentage of births delivered in a health facility

More recently, the Global Partnership on Output-based Aid (GPOBA) grant of US$6.25 million financed both the provision of outpatient services at the three newly refurbished filter clinics in Maseru as well as selected additional inpatient services at the main hospital. The OBA subsidies were disbursed based on the achievement of performance targets for key service delivery indicators. The refurbishment of the three filter clinics in Qoaling, Likotsi and Mabote was completed on schedule in April and May 2010 and the Queen ’Mamohato Memorial Hospital opened in October 2011. The hospital is operating at an occupancy rate of 70% and staff report seeing a greater survival of low birth weight babies due to availability of equipment and appropriate care.

The HIV and AIDS Technical Assistance Project (US$5 million) is recognized as an important contribution to the national AIDS response. The project’s objective is to build capacity of government’s agencies and civil society organizations at both national and local levels to address the identified key gaps in implementing the National HIV and AIDS Strategic Plan in an effort to contain and reverse the epidemic. Focusing on high-priority capacity gaps such as building non-government organizations’ (NGOs) capacity to access and manage grants, strengthening the supply chain to improve HIV commodity availability, and supporting district and community councils to mainstream prevention activities – the project is implemented by the Lesotho Council of NGOs (LCN), Ministry of Health (MOH), and Ministry of Local Government and Chieftainship (MOLGC). To date, contributions have been made in the development of training materials for Auxiliary Social Workers and provision of training on Orphans and Other Vulnerable Children (OVC)ghdf identification and referral, development of an OVC adoption policy and guidelines, update of national public health laws with a view to ensuring access to quality services, empowering the regulatory and control mechanisms and protecting the public and support to implementation of the Essential Service Package (ESP) of HIV prevention interventions at community level.

The Bank and  the Ministry of Health  have prepared a Maternal Newborn Health (MNH) Performance-based Financing (PBF) Project which was approved by the World Bank Board on April 2013.  The project’s goal is  to improve the utilization and quality of maternal and newborn health services in selected districts in Lesotho. Through PBF, the project will promote a continuum of care during pregnancy, childbirth, postpartum and the neonatal period in order to combat Lesotho’s serious worsening of maternal and child mortality. The project will contribute to improving the quality and uptake of MNH services by stimulating performance of health workers at health centers as well as Village Health Workers, and improving the capacity to provide MNH care through facility-level support, including training of health professionals and monitoring and evaluation.  The project effectiveness date  is February 2014.  The project activities will be piloted in the selected districts through

Agriculture

The Smallholder Agriculture Development Project (SADP) is funded jointly by the World Bank and the International Fund for Agricultural Development (IFAD) with total investment of about US$25 million. The objective of the SADP is to increase, over a six-year period, marketed output among project beneficiaries in Lesotho’s smallholder agriculture sector.  The two main project outcomes are an increase in agricultural market opportunities in the project area, and productivity and output of smallholder farming activities in the project area increased. The project operates in four of Lesotho’s 10 districts (Botha-Bothe, Leribe, Berea, and Mafeteng). The project became effective in March 13, 2012 and has been on the right track since its implementation.

Last updated October 2013

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Lesotho: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

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