Does Letšeng contribute meaningfully to communities?

Writes Tjonane Matla

With Lesotho’s low agricultural productivity and with only 10% of its land surface available for arable agriculture, her 1.9 million population with an annual growth rate of 0.9% predominantly rural country depends mostly on subsistence agriculture for their livelihoods. Heavy dependency on South African imports and excessive dependence on the Southern Africa Customs Union (SACU) receipts, the households depend heavily on remittances from family members working in South Africa, in mines, on farms and as domestic workers, though mining employment has declined substantially since the 1990s. Lesotho produces less than 20% of the nation’s demand for food. Rain-fed agriculture is vulnerable to weather and climate variability. For instance, 2015/16 cropping year, crop production has decreased by 90% leaving an estimated 679 437 people in need of food assistance. (Source LVAC Report)

With extremely limited tax revenue streams due to a small economy and to some extend lack of robust governance with good agricultural policies and enabling legislations promoting investment in commercial farming. Lesotho has a comparative advantage in various sectors such as dairy, horticulture, pomology and last but not least wool and mohair fibre. Its ability to produce fibre in subsistence methods, did not limit her in competing globally with world largest producers of wool and mohair.

Indirect stimulation

Although not contributing directly through mandated government department, it might be correct to say that Basotho through Letšeng Diamonds, a company they own 30% equity stake as a nation, are destined for viable socio economic growth that shall not only meet immediate community needs but also facilitate upliftment in the long term.

This encouragement program to farmers came right at the time that the government subsidy programs were geared towards summer cropping of grains, an area where Lesotho cannot simply optimise her returns.

According to the Administrator of Corporate Social Responsibility & Investment (CSRI) – Tšepo Hlojeng; “Letšeng Diamonds profoundly embraces the principles of corporate social responsibility to guide its overall response to the needs of the communities that live around the mine and the nation at large. The Corporate Social Responsibility and Investment (CSRI) programmes are guided by the CSRI policy and a three – year CSRI strategy.”

CSRI strategy

Hlojeng added; “As a matter of policy, the mine CSRI strategy development process follows a well-defined process of community consultations in an attempt to identify the needs of the peoples. The communities around Mokhotlong were covered by the 2010 – 2013 strategy while the 2014 – 2016 strategy included farming projects in Botha-Bothe district.”

2010 – 2013 strategy

Mokhotlong contributes 38.3% of Lesotho’s wool and mohair sale revenue. The total amount is closely approaching M 300 million for the entire country. It was therefore not surprising when the stakeholder consultation revealed needs in: 1). Small -stock farmers’ training and capacity building, 2). Need for construction of woolsheds, and 3). Need for ram breeding project.

The trainings and capacity building for farmers was done primarily with the aim of improving the business aspect of the skills which already existed in the farming community, however since Basotho farm more or less following subsistence methods, it was of paramount importance to equip them towards profit optimization level and thereafter sustain such.

A team of high calibre trainers trained the trainers that are since pioneering training in 2012 had perpetually been training the other farmers in Mokhotlong and neighbouring districts. “I have been educated in general livestock and small stock production management, entrepreneurial and business management, basic animal health procedures, ram breeding training, shearing, recording and classifying wool.” Testimony by ‘Malebohang Makalo of Mapholaneng who furthermore disclosed that she is an artificial insemination consultant to other farmers as a result of the skills transferred.

On the other note, Aron Moketa of Mokhotlong had this to say: “The project facilitated our farming community with three woodsheds in areas where we were experiencing overpopulation during shearing periods. We were also empowered with seven rams of high value (M 15,000 to M 30,000 worth of rams), a land cruiser van and semen nitrogen tanks as we serve farmers at different points.”

Correlation measurement on fibre project

  • The Mokhotlong farmers demanded the improvement of the country’s fibre six years before Lesotho’s first multi-million wool and mohair improvement project financed by the International Fund for Agricultural Development (IFAD), Lesotho National Wool and Mohair Growers Association (LNWMGA) and the Government of Lesotho (GoL).

  • This puts Mokhotlong seven years ahead of other districts on a US$ 36.6 Million seven year project. On the other angle Mokhotlong farmers would have 14 years’ worth of experience by the time the national wool and mohair improvement project is fully implemented.

  • Through the CSRI strategy, the country’s 30% equity stake in Letšeng brought about M 4 million in improvement of wool and mohair industry, an achievement that has never before been attempted through the national budget.

  • This shall improve the Merino wool fibre per ewe from the current national average of 2.5/kg to at least 5kg/ewe a step that shall increase earnings per ewe, henceforth Basotho wealth.

    2014 – 2016 strategy

    For nearly three decades the people living along the Hololo river in the district of Botha – Bothe had been engaged in vegetable production through open field irrigation. This was more or less the only irrigation project surviving in Lesotho as Khomokhoana (Tsikoane), Kolonyama, Thaba-Bosiu, Masianokeng and Seaka irrigation projects long collapsed due to various reasons being mismanagement and challenges of climate change.

    The ‘Malere and Nkhaketse irrigation projects, located on the banks of the Hololo river, a tributary of Mohokare (Caledon), were boosted by serious demand for vegetables during the construction period of the ‘Muela Hydro-power station which is the phase one of the Lesotho Highlands Water Project. When the project was completed, the commuters and tourists driving along the A1 road to Mokhotlong became the number one customers, supporting the farmers for nearly a decade now.

    Regardless of the high demand of vegetables and willingness of the farmers to produce, the project was almost on its knees when Letšeng Diamonds injected M 3, 100,000.00 towards erection of six tunnels to mitigate the challenges of unprotected farming.

    The refurbishment of the entire farming practice included a professional running the project, training of farmers, and financing the entire season on 32 hectares of farmers own land outside the project area, so as to render kick start finance.

    2017 – 2020 strategy

    Leaving other things constant, Letšeng’s next strategy could possibly be extrapolated either in the line of abattoir or dairy. Our hypothesis therefore is based on the fact that on different newspaper publications Letšeng had invited either tenders or expression of interests to consultants to advise them on abattoir/slaughter house establishment.

    Evidence gathered from a greater number of elites residing in Mokhotlong is satisfaction on the transparency and code of conduct the CSRI – Department is following. “Some people wanted the third phase of the CSRI to finance establishment of an abattoir or slaughter slab, to me that could be duplication of effort as already IFAD is just about to assist the Mokhotlong farmers”. Khotsang Moshoeshoe commented.

    Letšeng rejected our abattoir project, but I am satisfied as their decision was based on scientific methods of feasibility and viability. Before making any decision they repetitively advertised consultancy job on the matter, so I am happy of their decision. It is far better than financing what will in later years become a white elephant”. Sekoja Phakisi added.

Brief analysis

  • Unlike the common practice in Lesotho, the key criterion in both the projects as per first and second strategy was that the beneficiaries were organised and had been in the business for decades before they got assisted. In other words this was not a marriage just to access funds.

  • Mokhotlong seems to be only looking in the direction of either dairy or slaughter house or abattoir. It is really not making sense why poultry either as broilers, layers or free range chicken project was never considered.

  • In this article, earlier paragraphs under ‘indirect stimulation’, the author mentions the 30% Basotho stake. It must be noted that this was a mention of Lesotho’s contribution, but it must be noted that the 70% foreign investment forming Letšeng Diamond as a complete legal entity is not undermined. Furthermore the author is aware that the CSRI strategy is a company policy not Basotho stake holding.

“A journey of thousand miles begins with a single step.” Says a famous Chinese proverb. There is no doubt that the CSRI strategy of Letšeng Diamonds is beginning to have a serious impact in directly improving the quality of life for the beneficiaries.”

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