Country Report on Local Economic Development in Lesotho

Transcription

1 Country Report on Local Economic Development in Lesotho April 2008 By Claire Patterson On behalf of the GTZ Strengthening Local Governance Programme s LED component in South Africa

2 Table of Contents 1 Introduction and Purpose National Enabling Perspective LED in Practice Lesotho Local Development Programme CARE SA - Lesotho Maloti-Drakensberg Transfrontier Programme Conclusions References

3 1 Introduction and Purpose Lesotho is a country of 2.2 million people, and is entirely surrounded by the Republic of South Africa. Lesotho s economy has been overwhelmingly shaped by the power and proximity of the South African economy, especially its mining sector, which has provided labour to a great number of migrant workers. As a result, there has been a limited need for domestic jobs and self-employment and thus the low development of the informal sector. However, a common challenge for communities in both countries is access to regular income and economic opportunities. In Lesotho trying to resolve this challenge involves creating income generation opportunities in a relatively underdeveloped economy. This paper looks at the state of local economic development in Lesotho with respect to national and local policy, and explores a number of examples of current LED activities at national level. LED is not a national policy, but is directly or indirectly referred to in a number of policies. For this report, the policies with the closest relation to local and regional economic development have been selected. The same applies to the foreign-assisted and government programmes included in this report. The paper concludes with a summary of key issues and conclusions. 2 National Enabling Perspective Lesotho is a constitutional monarchy, and has a relatively young democracy that has alternated between a military dictatorship and a parliamentary democracy ever since independence in Decentralisation and the establishment of new local government structures is a priority for the present national government, since until recently public administration has been centred in Maseru. Since 1998 there have been three major development policy initiatives; Vision 2020; the Public Sector Improvement and Reform Programme (PSIRP); and the Poverty Reduction Strategy Paper (PRSP) process (DFID, 2005). Between 1970 and 1974 economic growth in Lesotho averaged eight percent. However it slowed down to an average of four percent from 1982 to To accelerate sustainable growth and reduce poverty, King Letsie III called for a longterm vision that will guide economic development over the following 20 years. In response, the following national Vision Statement was prepared: 3

4 By the year 2020, Lesotho shall be a stable democracy, a united and prosperous nation at peace with itself and its neighbours. It shall have a healthy and welldeveloped human resource base. Its economy will be strong, its environment well managed and its technology well established (Kingdom of Lesotho, 2007). As a first step towards the implementation of the Vision 2020, a Poverty Reduction Strategy (PRS) was prepared. The strength of the Vision 2020 and the PRS lies in the fact that both are nationally driven. The PRS is based on a three-year consultative and participatory process involving communities and stakeholders nationwide. Working groups, composed of key policy makers, representatives of NGOs, the private sector and academia prepared a series of sectoral and thematic position papers that describe how best the government of Lesotho (GOL) might respond to the concerns of the poor over the next few years. The community consultations reports were analysed to generate national priorities for equity-based growth, whereas the position papers provided objectives, strategies and activities to be implemented under these priorities. The PRS formulation process identified eight priority areas: 1. Employment Creation 2. Improve agricultural production and food security 3. Develop infrastructure 4. Deepen democracy, governance, safety and security 5. Improve access to healthcare and social welfare 6. Improve quality and access to education 7. Manage and conserve the environment 8. Improve public service delivery The PRS recognises that poverty reduction can only occur in the context of more rapid and sustained economic growth. Such growth should be driven by the private sector but facilitated by appropriate interventions and policies of Government, which will create more employment and income generating opportunities. As far as possible, this growth should be anchored in the local economy through the promotion of locally-based linkages, supply chains and multiplier effects that will stimulate further growth. Through appropriate tax policies, increased growth will be envisaged to enable Government to address national development objectives including improved provision of social services, law and order, public administration and infrastructure. 4

5 The PRS is built on three inter-connected approaches: a) Rapid employment creation through the establishment of a conducive operating environment that facilitates private sector-led economic growth; b) Delivery of poverty-targeted programmes that empower the poor and vulnerable and enable them to secure access to income opportunities; and c) Ensuring that policies and legal framework are conducive to the full implementation of priorities, that bureaucratic constraints are removed, and that the productivity of the public sector improves. The Decentralisation for Improved Service Delivery is one of the key pillars of the Public Service Improvement and Reform Programme (PSIRP). The implementation of the decentralisation programme started with the Local Government Act of 1997, and has continued with the local government elections of However, there has been slow progress made to implement the decentralisation process. Existing mechanisms for effecting real decentralisation and devolution are generally inadequate at both national and district levels. Through the Local Government Act of 1997 (and the amended Act of 2004), 139 local governments have been established. They have been allocated clear responsibilities for planning, budgeting and implementation of social and economic infrastructure and service delivery. However, there is still limited knowledge on what decentralisation entails and often the resources managed by local authorities do not match their assigned functions or responsibilities. Assignment of government staff to District Administrations, District Councils and Community Councils has officially taken place through the government programme Community Driven Development (CDD) which aims to design frameworks for decentralization and community empowerment to improve service delivery and reduce poverty. With there previously being no local government structures in Lesotho, the country has a poor history of community participation and empowerment. Since 2005, many districts now have the structures of local government in place and are functional, but are struggling to come to terms with their new mandates and staff still operates under their parent ministries with little or no reference to the new authorities. In terms of fiscal decentralisation, there is little understanding of the roles and responsibilities between the different ministries and the councils, which is having an impact on service delivery at local levels (Kingdom of Lesotho, 2006). 5

6 3. LED in Practice The practice of local economic development in Lesotho is far more recent than in neighbouring countries like South Africa. The country has a younger democracy and although it faces many of the same challenges that South Africa has, its approaches in dealing with these challenges have been different. Thus, the number of LED initiatives and case studies are fewer, and are largely at a higher level of government as the Lesotho government comes to terms with decentralisation in the country. The following three case studies provide an example of external assistance to the Lesotho government, the first to assist the implementation of its decentralisation policy through the Lesotho Local Development Programme, and then two well known partnership programmes between the Lesotho and South African governments the CARE programme, and the Maloti-Drakensberg Transfrontier Project Lesotho Local Development Programme The Lesotho Local Development programme (LLDP) is a programme of the Government of Lesotho, which benefits from technical and financial support from UNDP and UNCDF. It is a collaborative effort by central government, local governments and the UNDP & UNCDF to achieve poverty reduction and attain the MDGs through inclusive, responsive service delivery mechanisms. The four-year programme from 2007 to 2010, has a nationwide impact as it supports different aspects of implementing the decentralisation process across the country. From an operational point of view, it focuses on the six Northern districts (Maseru, Berea, Leribe, Botha Bothe, Mokhotlong, and Thaba Tseka), with a total population estimated at about 913,000 people (UNDP, 2006) The two key outcomes of the LLDP are: (i) Improved delivery of pro-poor economic infrastructure and social services; and (ii) Support to local economic development as a means to spur economic growth, poverty reduction and well-being. To contribute towards these outcomes, the programme is designed around a number of outputs (UNDP, 2006). Output 1: Systems for inclusive, pro-poor, decentralized and effective planning and budgeting of local development are established at central level and applied in the six Northern Districts. This will be achieved by enhancing the leadership of the Ministry 6

7 of Local Government (MoLG) in terms of overall management coordination and administration of the decentralization process for poverty reduction. Furthermore, by strengthening the capacity of local governments to establish and/or improve systems for participatory planning, budgeting, resource mobilisation, land management and urban development and to fully support them. Support to initiatives at community level empowers self-organized community organizations and enables them to identify their problems and define their needs and priorities, and fully participate in planning and decision-making processes. Output 2: Procedures for sustainable production of public infrastructure and delivery of social services are established at the central level and applied in six Northern Districts. This output is aimed at carrying out appropriate legal and judicial reform programmes to create an enabling environment for private sector investment and growth. Output 3: Financing instruments for local public infrastructure and service provision as well as for local economic development of rural communities are established and are operational in Northern Districts This output will entail distinct and complementary initiatives at different levels. Output 4: National policies concerning decentralization and the roles and functions of local government on local development and poverty reduction are informed by LLDP s lessons learned and best practices. The different activities of this output will ensure that national policy-making processes profit from and are informed by experimentation at the local level. This entails the replication of results based M&E information and communication systems, the documentation and dissemination of major lessons learned and the enactment of legislative amendments to enable effective local governments. The Ministry of Local Government (MoLG) is responsible for the execution of the programme in accordance to its mandate to establish and support a central and local mechanism to steer and guide the decentralization process in an inclusive manner. The LLDP is supervised by a Decentralisation Steering Committee (DRSC), chaired by the Principal Secretary of Local Government and made up of all the Directors in the Ministry of Local Government and Deputy Principal Secretaries from other Ministries who are directly involved in the decentralisation process. The DRCS, 7

8 considered as the prime mover of the decentralization process, has a close synergy with the Steering Committee of the Public Sector Improvement and Reform Programme (PSIRP), which is placed under the Chairmanship of the Government Secretary CARE SA - Lesotho CARE International (CARE) is a private international relief and development organisation in sustainable development and emergency aid. Their programmes stretch over more than 60 countries in Africa, Asia, Europe, the Middle East and Latin America. Established in Lesotho in 1968 and South Africa in 1994, the joint mission of CARE Lesotho-South Africa was created in 2001 to promote integrated regional programming and lesson learning between the two countries, as the Lesotho economy is closely linked to that of South Africa and shares many of the same challenges that South Africa does face. CARE Lesotho-South Africa has head offices in Johannesburg, South Africa and in Maseru, Lesotho, where programmes are implemented across the country. CARE's work on community-based approaches to service delivery offers a model for pro-poor service delivery that promotes empowerment of rural communities. Through these approaches, CARE aims to strengthen the relationships between communities, service providers and government, with the aim of building the capacity of community institutions to demand, as well as manage and direct services that support local economic development. CARE operates under a number of themes that include rural livelihoods, good governance and economic empowerment. The Local Economic Assessment Programme (LEAP) was designed as a pilot project following a sector specific survey done between 1999 and 2000 on Micro Finance and on general Business Development Services. The survey identified enterprise-constraints that underpinned the Economic Empowerment Programme design. CARE s long term goal within the Economic Empowerment theme was to pilot a methodology that could easily be replicated by partners (NGOs/ CBOs) with limited long term technical support from CARE. 8

9 The purpose of LEAP was to increase the number of viable micro-enterprises in rural areas, and the objective being to develop and pilot a methodology that NGOs/ CBOs can use and help their clients (micro-enterprises) in; Analyzing and understanding of the local economy; Identifying and developing market and business opportunities, and building capacity for local entrepreneurs to identify appropriate support from service providers; Enhance their capacity to respond to market opportunities The outcomes of the pilot are: The formation of a Local Community Economic Assessment (LCEA) tool. The LCEA is a framework of analysis that enables the collection and analysis of local economic market information that could be used: o By local entrepreneurs; for the identification of local market opportunities and local market constraints, developing products and/or enhancing existing businesses activities that respond to market opportunities, o To input on the LED priorities of the local, district and regional economies, o For Local Economic Profiling o Identification of other economic sectors that have positive growth potential. Providing people with limited capacity to participate in the profiling process Piloting activities based on local market information Through the LCEA, sector specific enterprise training was initiated to develop skills in agriculture and high quality craft production in rural areas, linking the farmers and crafters to appropriate local and international markets. The LEAP pilot resulted in a design and methodology that focuses on the use of local resources, ideas and skills. It had a strong capacity-building component that had widespread impact in both the agricultural and craft sectors. However, one of the weaknesses of the programme was that it focused on rural poverty-alleviation projects, which became highly reliant on the partner organizations to drive the processes. A greater emphasis on developing existing and emerging small 9

10 enterprises would have been more appropriate in providing long-term sustainability and economic development in the non-urban areas of Lesotho. CARE is currently planning to replicate LEAP to other areas of Lesotho using gained experience and lessons learnt from the existing pilot. Further development and adaptation of the LCEA will focus specifically on contributing towards LED priorities and to develop a sector specific community based value chain map that will enhance the commercial potential of the existing pilot activities. This will isolate different areas of development and resource intervention in the value chain map and could facilitate development of strategies that link the informal and the formal sector, and possibly, facilitate movement of some informal activities to formal sector enterprises. 10

11 3.3. Maloti-Drakensberg Transfrontier Programme The Maloti-Drakensberg Transfontier Conservation and Development Project (MDTP) is a collaborative initiative between South Africa and the Kingdom of Lesotho to protect the biodiversity of the Drakensberg and Maloti mountains through conservation, sustainable resource use and land-use and development planning. The area encompasses distinct landscapes and biological diversity. However, excessive livestock grazing, crop cultivation on steep slopes, uncontrolled burning, alien invading species and human encroachment threatens this asset. This five-year project takes a regional and ecosystem approach to conservation and development, and serves to promote biodiversity conservation through linkages with community development, based on the realization of the region's high potential for nature based tourism. The region is the most important water catchment area for the people of Lesotho and South Africa. Two of the largest civil engineering projects in Southern Africa, the Tugela-Vaal Scheme and the Lesotho Highlands Water Project, carry water from the mountains to the economic powerhouse of Africa, the province of Gauteng. On both sides of the international boundary there are local populations who are dependent on the mountains for all or part of their livelihood. The project began in 2002 and was completed at the end of 2007, with funding of approximately US$16 million from the Global Environment Facility (GEF), with the World Bank acting as an implementing agency on behalf of the GEF. The funds were used under eight headings of Project Management, Conservation Planning, Protected Area Planning, Conservation Management in Existing Protected Areas, and Conservation Management in Priority Areas outside existing protected areas, Community Involvement, Nature-Based Tourism Planning and Institutional Development. The end product has not only been a comprehensive conservation plan, but extensive community capacity building in asset-based natural resource management and conservation which has led to enhanced livelihoods of local communities living within the area (World Bank, undated). 11

12 In Lesotho, there are a number of other examples of donors supporting community participation and public sector reform. The German Agency for Technical Cooperation (GTZ) has worked on participatory planning in areas of Lesotho, and created significant planning capacity there. The World Bank has also launched a community development fund, utilizing revenues from the Lesotho Highland water scheme. The ComMark Trust has provided technical expertise on a number of fronts including working with the Lesotho Exporters Association to develop a system of incentives and assisting the Ministry to prepare a Cabinet Memorandum on this incentive package. The availability of serviced industrial land has also been identified as a constraint. The Lesotho government has realized that it needs to improve its investment climate, both from regulatory and incentive points of view, to retain its apparel industry and attract new investment. The UNDP s Strengthening Capacity for an Integrated Approach to Trade Enhancement and Wealth Creation in Lesotho aims to strengthen national capacity to formulate and implement effective trade and investment strategies that support poverty reduction and wealth creation. The project complements the implementation of the Poverty Reduction Strategy (PRS) under the poverty priority support programme. Specifically, the project will focus on supporting the Ministry of Trade and Industry, Cooperatives and Marketing to promote capacity development and coordination with particular emphasis on employment creation, investment promotion and SMME development. The Poverty Support Programme is an integrated programme funded by Department for International Development (DFID) to support the implementation of the PRS in the areas of HIV and AIDS; Job Creation; Food Security; and Governance, Safety and Security. The project consists of the following components 1. Capacity strengthening and awareness of the Ministries of Finance and Development Planning; Foreign Affairs; Environment, Tourism and Culture, and the Lesotho National Development Corporation, Lesotho Tourism Development Corporation, Parliament, Private Sector, Civil Society, Trade Unions, and Economic Planners for the Integrated Framework for Trade Related Technical Assistance 12

13 2. Strengthening the Secretariat within the Ministry of Trade & Industry, Cooperatives and Marketing to effectively monitor the impact of its activities on poverty reduction and investment promotion 3. The implementation of the SMME Policy to strengthen local entrepreneurship to access national, regional and international markets within the context of the National Vision and Poverty Reduction Strategy. 13

14 4. Conclusions As a newly decentralized country, there are fewer available examples of initiatives in Lesotho that directly relate to local economic development. However, the support for pro-poor growth and community economic development by government is notable. While Lesotho struggles to come to terms with decentralization, concentrating on providing basic services for the poor will not necessarily create economic livelihoods, and may create a dependency on the state. A supportive national policy is required which clearly empowers local authorities, defines their duties and encourages community participation, and interaction with the private sector. With this in mind, the government has made a commitment to decentralize, establish elected local governments, and give communities a role in their own development as part of a public sector reform initiative (supported, in part, by the World Bank). This means creating new systems that are more participatory, accountable and efficient. Although the Ministry of Local Government is currently relatively weak and clear roles and responsibilities for the decentralization agenda have not been defined, as a temporary measure, the government is beginning to implement an Urban Boards Act to institute urban local governments in 11 towns and the capital. It is clear from the initiatives documented, that Lesotho relies heavily on donor support for capacity building and implementation of many of their programmes, particularly in coming to terms with their decentralisation process. However, donor projects and programmes are in many ways implemented independently as standalone projects. Until now, the majority of development assistance remains in the form of un-harmonised project aid which has a multiplicity of conditions, reporting requirements and numerous supervision missions. A clear policy and collaborated effort towards local economic development would provide greater effect towards the future progress of Lesotho s economy. 14

15 5. References Aiyer, S. & Floyd, R, (2001) Community Development Initiatives in Lesotho CARE SA-Lesotho, (2006) Strengthening Civil Society in Lesotho, presentation CoMark Trust, (2005) Lesotho Apparel Project, newsletter Department for International Development (DFID), (2005) Evaluation of DFID s Country Programmes Country Case Study Lesotho Government of Lesotho, (2008) Lesotho Budget Speech UNDP & UNCDP, (2006) Lesotho Local Development Programme Report Kingdom of Lesotho, (2007) Poverty Reduction Strategy, Maseru Mbethu, R, & Tshabalala, M. (2006), Lesotho Local Development Programme Concept Paper, Maseru Overseas Development Institute, (2007) Community-Based Worker Systems a possible solution to more services reaching many cuntries and within budget: CBW partners in South Africa, Lesotho, Uganda and Kenya Selebalo, Q & Effler, D. (2002) Fostering Rural Economic Development througfh agric-based enterprises & services. Land Reform in Lesotho Will it lead to poverty reduction in rural areas?, Maseru World Bank, (undated) The Maloti-Drakensburg Transfrontier Programme Websites: Maloti-Drakensburg Transfrontier Programme: CARE SA-Lesotho Lesotho Local Development Programme DFID Lesotho Khanya-aicdd CoMark Trust Southern African Regional Poverty Network Lesotho Highlands Water Project