US Pulls Plug on R6-Billion Development Project in Lesotho, Leaving Communities in Limbo

A massive R6-billion development initiative in Lesotho, funded by the United States through the Millennium Challenge Corporation (MCC), is collapsing as the US moves to shut down the project, sparking uncertainty and concern across communities.

The Lesotho Health and Horticulture Compact, launched in 2023, aimed to benefit 2.5 million people over two decades and generate over 90,000 jobs in five years. Now, the programme’s future hangs by a thread, with silence from both the Lesotho government and the local MCC implementation unit, the Millennium Challenge Account (MCA).

Major Projects at Stake

The compact included three high-impact components:

• $75
  R1,395.37.4 million health project to improve primary healthcare, HIV/AIDS treatment, and maternal and child health systems.
• $118
  R2,195.38.6 million food production initiative focused on irrigation, rural income generation, and food security.
• $62
  R1,153.51 million programme supporting small businesses, particularly women- and youth-owned enterprises.

The MCC committed $300
R5,581.49 million, while Lesotho pledged $22
R409.31.3 million. The now uncertain closure could mean thousands of livelihoods disrupted, and key rural development efforts abandoned.

Signs of Shutdown Emerge

While official statements are lacking, correspondence seen by GroundUp confirms the shutdown is underway. Staff on the food production project were informed the compact would be closing. In emails to contractors, MCA acting chief executive Limpho Maema confirmed services would continue only until a final closure date is confirmed.

Even Cowater International, the Canadian firm awarded a $21
R390.70-million small business contract, has started retrieving equipment and shutting down operations.

In an internal email, Project Manager Antoinette Albisetti told staff to return laptops and clear out by month-end, noting: “We are now moving all office equipment into storage and looking to tie up loose ends.”

According to the MCC agreement, all unspent funds must be returned to the US agency.

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Community Impact and Frustration

In villages like Phamong in Mohale’s Hoek, the impact is already being felt. ‘Maamohelang Tomo, who helped verify land for the horticulture project, described the shock and confusion gripping the community.

“Since we were told to suspend services in January, there’s been no word on the way forward,” Tomo said. “The community trusted us… Now they come to us asking for answers, but we have nowhere to turn.”

Tomo’s team had secured landowner cooperation, and construction of roads and irrigation dams was expected to begin soon. That progress is now in limbo, with many families unsure whether compensation, jobs, or infrastructure will ever materialise.

Government Mum, US Silent

Lesotho’s Foreign Affairs Minister Lejone Mpotjoane redirected queries to Finance Minister Retselisitsoe Matlanyane, who was reportedly abroad and unavailable. Maema offered only that discussions with MCC were ongoing and an official statement would be released once a final decision was reached.

The US Embassy in Maseru did not respond to GroundUp’s questions, and previously referred all queries to Washington.

The project’s sudden derailment follows the closure of other US-funded programmes in Lesotho, raising concerns about a broader diplomatic or policy shift.

A Development Dream Derailed?

The Lesotho Health and Horticulture Compact was one of the most ambitious development partnerships in the country’s recent history. It aimed to tackle chronic issues in public health, food insecurity, and economic marginalisation.

Its termination would mark a major setback in Lesotho’s development agenda and cast a long shadow over US-Lesotho relations. For the thousands of villagers who had pinned their hopes on the programme, the silence now speaks louder than any promise ever made.