The Kingdom of Lesotho is a small country, landlocked by the region’s largest economy, South Africa.
Considered a lower middle income country, Lesotho relies less on external aid than other sub-Saharan African countries, but poverty and income inequality remain high due mainly to a stagnating growth and an economy highly dependent on its main external partners, South Africa and the United States. Meanwhile, the country’s limited natural resources and small agricultural sector are suffering the effects of climate change (drought and soil erosion).
Moreover, Lesotho’s HIV/AIDS rate is one of the highest in the world (23%) and the country suffers from recurrent insecurity and political fragility.
While water and energy are sectors with high potential for export, internally access to water, sanitation, and energy remains challenging.
Also, the recurrent military interference in politics since mid-2014 has fragilised the government which struggles to pass effective reforms.
In this context, our priorities for Lesotho are to:
- improve overall access to water and expand sanitation services
- improve access to a modern, clean, affordable, and reliable energy supply for both the people and the industry
- ensure good governance and effective financial management, improve the justice system, and build the public sector’s capacities
By focusing on these 3 complementary areas, we seek to accelerate poverty reduction, find new drivers for economic growth, and contribute to Lesotho’s sustainable development.
Our main way of cooperation with Lesotho is bilateral. Our national indicative programme (NIP) under the 11th European Development Fund (EDF) for the period 2014-2020 for Lesotho is in line with the country’s national strategic development plans.
As budget support was discontinued in 2017, our bilateral cooperation with Lesotho is mainly implemented through a project approach and blending operations. The initial envelop of €142 million was reduced to €124 million after a mid-term review.
The fact that South Africa, Lesotho’s only neighbour, is not eligible for funding under the EDF constitutes a major challenge when it comes to regional cooperation.
Nevertheless, as Lesotho is part of the Southern African Development Community (SADC), it benefits from the EU regional indicative programme for Eastern Africa, Southern Africa, and the Indian Ocean (EA-SA-IO), as concerns the envelope dedicated to SADC (2014-2020).
For the same reason, the country is also part of the EU-SADC economic partnership agreement (EPA) since 2016.
We also support civil society organisations (CSOs), via our Development Cooperation Instrument (DCI) and the European Instrument for Democracy and Human Rights (EIDHR). These contracts are directly managed by the EU delegation on the ground.
In the framework of the Global Climate Change Alliance (GCCA+), we provide the government of Lesotho with technical assistance to set up the required policy and institutional framework to reverse environmental degradation and efficiently adapt to climate change.