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Newly-appointed Millennium Challenge Account (MCA)-Lesotho CEO, ‘Mannana Phalatse, says her top priority is to ensure that the organisation remains committed to driving the country’s economic growth, enhancing rural livelihoods, promoting private sector participation in national development, and improving the health of Basotho. In this in an interview with theReporter’s ‘Mantšali Phakoana, Phalatse also reveals that she will work hard to promote effective communication with all stakeholder.
Please tell us about yourself and your professional background.
I’m an economist by profession. I hold a Master’s Degree in International Trade and Development Policy, an Honours Degree in Financial Economics and Banking and a Bachelor’s Degree in Economics with a minor in Statistics. However, I haven’t really practised much in that field. That said, my work experience has been mostly in the development space. I worked for five years in the US Embassy Maseru as an economics specialist.
That is where I developed passion for development activities hence when pursuing my Master’s Degree, I focused on trade. I had learned that as a small country, we have limited opportunities for growth and our growth strategy should be focused on the export market. We should utilise trade as a strategy for growth and economic development by accessing the global markets for production; not only attract local consumers.
Following this, I assumed the position of economic adviser at the ministry of development planning, actively contributing to the development of the National Strategic Development Plan II. I also briefly held the role of Head of Division for Reserves Management and Market Operations at the Central Bank of Lesotho, supervising a team managing the foreign exchange reserves for the country, and also paying the government’s foreign obligations.
I was also a consultant designing the overall framework and methodology on how NSDP would be implemented. I further developed the workplan and guided the process to get the Cabinet nod on the prioritised areas of the NSDP II.
I worked for the Lesotho Millennium Development Agency (LMDA) at the time, now MCA. I was Head of Compact II Development, where I led a diverse team of experts in crafting the Lesotho Health and Horticulture Compact. I started there as an economist and was later promoted to head the team.
Why is the fight against global poverty important for MCA-Lesotho II?
It is important because it is one of the key focus areas for the UN Sustainable Development Goals (SGDs) which Lesotho remains committed to implementing. Noone deserves to be poor and for MCA, we see ourselves having a major role in eradicating poverty. We are doing this through supporting the government to grow the local economy to create jobs. This will enable employees to take care of their basic needs and reduce household poverty.
We will not be able to eliminate poverty at once or fully but our aim is to have an impact to the beneficiaries of Compact II. We believe that through the investments that we will be embarking on, we will achieve our goal. In trying to figure out that we will be doing with our interventions under this compact, the first question we had to ask ourselves was; “In what areas can MCC (Millennium Challenge Corporation) invest in in Lesotho to help us move towards the overall goal of reducing poverty?” We had to do a preliminary assessment; one of the issues was to identify which sectors of the economy would help create more jobs, with the understanding that job creation is a crucial tool towards poverty reduction.
We then prioritised the horticulture sector because it has the potential of creating more jobs compared to others. We prioritised this for MCA-Lesotho II. For every hectare that we invest in horticulture, we are able to create at a minimum two jobs. This means if Compact II will be investing in roughly 2000 hectares of horticulture production, our estimate is that at the minimum, we will be able to generate 4000 jobs under this specific project only. There is also another project focusing on small businesses. We chose that approach because small and medium enterprises in any economy are drivers of growth.
Most of those businesses are owned by local people, so investing in them will ensure that more suitable jobs would be created. That is how the compact is contributing beyond the 4000 direct jobs in horticulture.
What challenges does MCA-Lesotho II aim to address in order to achieve the compact’s objectives?
Poverty reduction and job creation are the major key issues MCA-Lesotho II is aiming to address overall. The unemployment rate is very high in the country, at around 25 percent. The route to reach there is by addressing other challenges; for instance, coordination between the government and the private sector because in any economy, the private sector is and should be the engine of growth. At the same time, the sector relies on government to provide services and infrastructure for them to do business. If the coordination between government and private sector is not functional, then it would be a problem because the sector will not be getting the services it needs for business growth.
Will Lesotho’s failure to implement the long-awaited national reforms hinder in the implementation of the MCA-Lesotho II?
Failure to implement the national reforms would affect Lesotho’s eligibility for the compact. MCC have a scorecard process in which they review the performances for beneficiary countries on a number of indicators. If a country fails those that are marked as critical like rule of law and justice, MCC can suspend that country. However, at this point Lesotho has been performing quite well but there is always room for improvement.
MCA will continue to work hard in coordination with the relevant government ministries to ensure that we maintain that progress. As of now, I don’t foresee Lesotho failing. It is in our interest to have this compact delivered for Basotho.
MCA-Lesotho II is funded by MCC to the tune of M322 million. As CEO, how are you going to ensure that the organisation uses the funds to fulfil its mandate?
The MCC has put in place a number of safeguards to ensure that the compact funding is used only for those investments that it is intended for. MCC is overseeing us, the MCA, as we implement this project. Right now, MCC has deployed a team of two people who are here to ensure that MCA uses the funds for the purposes of implementing the compact only.
Secondly, the MCA has a board of directors made up of representatives from government, the private sector, and civil society whose overall mandate is to oversee the MCA governance and ensure that we are also using the compact funding in compliance with what it is aimed to do.
As CEO I hold the MCA staff accountable and ensure that funds are really used only for the right purposes. The funding is for the betterment of Basotho not the MCA staff.
Your appointment comes at a time when Lesotho is facing political uncertainty; do you think it is possible for the country to successfully meet requirements for MCA-Lesotho II?
We are committed to doing so. That is our number one priority. We are employed to implement the compact and nothing else. If we fail to do so we would have failed Basotho who are putting their trust in us. Challenges can still be there but we will not lose our focus.
Having worked directly with the MCA before, what are the challenges that you observed that might hinder the country from achieving what Basotho and the MCC are expecting? Do you have any solutions for those challenges?
In any activities one is working towards, there will always be challenges. For the compact, the key challenge is coordination with the government. A lot of what we do requires us to work closely and in collaboration with ministries because the funding is support to government, and not for any entity. So we’re changing government systems and how the government does business and for those changes to take place, we have to work with relevant ministries. That on its own requires a lot of patience.
We have to build networks and manage stakeholders to ensure that communication flows.
Another challenge is of the few laws which we know are conditions with the MCC, that government should have passed for the compact to be successfully implemented. At times there are delays since there are number of offices or different stakeholders involved before matters to be addressed reach parliament. Because of that, we need to be able to anticipate such delays and come up with plans to tackle them. Also, we need to identify the key players and see how to support them to ensure the process is done within the set schedule.
What is the role of the private sector towards the implementation of the MCA-Lesotho compact II?
The private sector is the main beneficiary in this compact while the role of the government is to support it. For instance, with the irrigation project, the government through MCC funding will be basically empowering the private sector to put up irrigation infrastructure for commercial horticulture production. There will be a lot of training facilities to support development of technical and management skills to the private sector in its commercial activities.
The private sector will be partnering with land owners in the areas to be identified for the project. It will involve a number of grants and interventions that help the country to easily create a conducive environment for the private sector to do business. The sector will also be involved in a number of health projects. Basically, the entire compact is technically focusing on the private sector.
What are your views on the previous initiative (MCA-Lesotho I)? Has it done enough as it was expected in the implementation of health and horticulture projects?
The compact transformed a number of things that we continue to benefit from even today. For instance, the Land Act was amended during under Compact I to make it easier for people to register land. This significantly boosted the land market in the country, mostly in urban areas.
Compact II will take over from that and expand on investment to roll out interventions in the rural areas such that even there we have a functioning and effective land market. Land is very important because it is one of the critical resources that we need for investment. In many of the sectors supported by NSDP, for manufacturing to take place, one needs to have land where to set up a business; whether it’s a factory or whatever business, it needs to be built on land.
Land is also needed for the agriculture and tourism sectors to function. For Compact I to have done that for us as a country, that is something commendable. It has certainly gone a long way to help us in the private sector to enable easy access to land for commercial investments to take place.
Also, we know that Compact I invested heavily in the health sector in terms of building beautiful health facilities that we still have today throughout the country. That was very significant and it remains one of the legacies that were done under Compact I. There was also investment in the Metolong Dam which has expanded water supply in urban areas, thereby boosting the manufacturing sector.