LESOTHO: VISIT OF MCC MANAGING DIRECTOR DARIUS MANS AND MCC

UNCLAS SECTION 01 OF 03 MASERU 000231

SIPDIS

SIPDIS

SENSITIVE

DEPT ALSO FOR AF/S

E.O. 12958: N/A
TAGS: KMCA EAID ECON PGOV PREL LT
SUBJECT: LESOTHO: VISIT OF MCC MANAGING DIRECTOR DARIUS MANS AND MCC
UPDATE

REF: (A) MASERU 215 (NOTAL) (B) MASERU 135 (NOTAL)

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Summary
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1. (SBU) As the potential signing of a Millennium Challenge
Account (MCA) compact draws nearer, MCC Managing Director for
Anglophone and Lusophone Africa, Dr. Darius Mans, visited
Lesotho on March 15-16, 2007, for a series of meetings with GOL
officials and other stakeholders. Prior to Dr. Mans arrival,
Finance Minister Thahane hosted a working dinner which featured
a frank discussion of Lesotho's needs and the status of MCA due
diligence activities. Ambassador Perry also held a series of
one-on-one exchanges with Lesotho's MCC interministerial team
members to clarify our USG specific compact requirements. Dr.
Mans' appointments were substantive and focused on outstanding
issues of concern to the MCC raised during the ongoing due
diligence process, particularly with regard to land reform and
health sector initiatives. END SUMMARY.

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March 14 Working Dinner
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2. (SBU) Prior to Dr. Mans' arrival, Finance Minister Thahane
hosted a working dinner on March 14. U.S. Ambassador June
Carter Perry, DCM Murphy, Control Officer Smith, and MCC
Representatives Deidra Fair and Brian Baltimore participated, as
did the following GOL Ministers: Local Government, Dr. Pont'so
Sekatle; Natural Resources, Mr. Moleleki; Health and Social
Welfare, Dr. Mphu Ramatlapeng. Senior Finance Ministry
officials, Principal Secretary Dr. Majoro, Dr. Khetisa, and Mrs.
Mohapi, also attended the in-depth and frank discussion of
Lesotho's basic needs and the status of MCA due diligence
activities. During the discussions, Dr. Mans emphasized the
tight deadlines faced by the GOL and MCC with regards to the
completion of the due diligence process. Minister Thahane spoke
extensively on the need for increased access to international
higher education opportunities for Basotho students and
professionals. (Note: Ambassador Perry took advantage of a
break in the pre-meeting dinner discussion to reinforce points
on the Zimbabwean situation. Minister Moleleki seconded the
Ambassador's comments with a highly critical assessment of the
actions of President Mugabe. SADC Ministerial Chair Thahane
acknolwedged that the SADC Security Organ would address
Zimbabwe. End Note.)

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Health Ministry Focused on MCC Issues
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3. (SBU) Due to airline delays, Dr. Darius Mans arrived in
Maseru, Lesotho on Thursday, March 15, 2007. Dr. Mans,
Ambassador, DCM, Control Officer, and MCC Staff met with key
Cabinet members including new Health Minister Dr. Mphu
Ramatlapeng on outstanding MCA Lesotho issues. During the
meetings, Minister Ramatlapeng stressed the Ministry's progress
on key health care human resource issues and her desire to
quickly resolve all outstanding MCC concerns. According to
Minister Ramatlapeng, a new educational program would
dramatically increase the number of nursing students in Lesotho
in the immediate future, addressing one of the MCC's key issues.
She also reviewed various organizational and personnel changes
at the Health Ministry and their possible positive impact on its
ability to resolve outstanding problems prior to and after
compact signing. Dr. Mans reiterated the importance of the
health care component of the proposed compact and his need to
have all outstanding issues resolved over the course of the
following month.

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Land Reform Issues
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4. (SBU) Dr. Mans met with Minister of Finance and Development
Planning Timothy Thahane, the GOL's primary lead on preparations
for the MCA compact. The two discussed project management
structures, financing gaps, and land reform issues. Thahane
affirmed his intent to meet with MCC officials in Washington on
the margins of the April World Bank/IMF meetings to address
unresolved issues raised during the due diligence process.


5. (SBU) Dr. Mans then met Minister of Local Government Dr.
Pont'so Sekatle, who discussed Lesotho's efforts to enact land
reform measures. Minister Sekatle expressed her desire to use

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the MCC land reform initiatives as a springboard to demarcate
all land plots in Lesotho, but emphasized that the issue remains
highly complex in a country with less than 8% arable land. She
also discussed a continuing controversy surrounding the creation
of a new land administration body centering on whether the new
organization will be part of an existing GOL ministry or a
semi-independent parastatal body. (COMMENT: We were encouraged
by later discussions between the Ambassador and MCC advisors,
Steve Dobrilovic and Tim Fella, that the Minister was open to
various alternative solutions. END COMMENT.) Dr. Mans asked
questions about the GOL's progress in creating this new land
administration authority, and stressed the MCC's need to resolve
outstanding issues within the following month.

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The Dam Site Visit
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6. (SBU) Led by Minister of Natural Resources Monyane Moleleki,
Dr. Mans visited the site of the future Metolong Dam (located in
eastern Maseru District),to be partially financed by MCC in
partnership with the World Bank and the Kuwait Fund. Officials
from Lesotho's water authority explained the project in detail,
and pointed out the future locations of key dam components. The
group discussed the relocation and resettlement plans authored
by the GOL, as well as health and education initiatives for
individuals living close to the dam site. Once again, Dr. Mans
reiterated the need for all outstanding issues regarding the
project to be resolved in the following month. (NOTE:
Resettlement is not a major issue as it was in the Highlands
Water Project given the sparse population near Mohale. END NOTE.)

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Donor Briefing and Coordination
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7. (SBU) On Friday, March 16, Embassy Maseru hosted a briefing
for donors at the Embassy. Ambassador Perry delivered opening
remarks and introduced Dr. Mans, who spoke about the importance
of donor coordination and the MCC's priorities in the period
leading to compact signing. Various donor missions and
organizations asked questions concerning health care workers,
education programs, methods of donor coordination, and efforts
to fight HIV/AIDS. Members of the press were invited to the
briefing's opening session, and reported favorably on the event.


8. (SBU) Finance Minister Thahane invited the Ambassador and
the MCC Managing Director to a private meeting with Kuwaiti
officials. Under discussion were the responsibilities of each
partner in the Mohale Dam Project. During the meeting, the
Ambassador thanked Kuwait for its current collaboration,
previous assistance in the Gulf War and the importance of our
joint efforts against terrorism. Dr. Mans and Ambassador Perry
also participated in the signing ceremony between the Government
of Lesotho and Kuwait on the Metolong Dam project. Minister of
Finance Thahane, who presided over the ceremony, acknowledged
the support of Ambassador Perry and Dr. Mans during the event,
speaking glowingly of the contribution which the MCC would make
to the future of Lesotho.

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Setting the Stage
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9. (SBU) COMMENT: The visit of Dr. Mans helped to reinforce
the necessity of timely action on the part of the GOL regarding
various outstanding issues, especially those related to the
health sector and land reform projects. Prior to the visit,
Ambassador Perry held a series of meetings with the Ministers of
Foreign Affairs (who chairs Lesotho's MCC Interministerial
Committee),Finance, and Local Government/Lands to lay the
groundwork for the Managing Director's talks. She also made
clear the specific areas, e.g., establishment of a Land
Authority for urban and peri-urban area and property access for
women, that had to be covered before a compact could be signed
with the GOL. Substantive progress on outstanding issues was
positive. We observed increasing flexibility on the GOL's part
and a significant interest in "plus-ing up" the
capacity-building aspects of the potential compact. This was
especially evident during the March 14 dinner when Dr.
Ramatlapeng expressed deep interest in training/human resources
to ensure basic technical training of community health workers.
Such in-depth side-by-side activity coupled with exchanges would
help lead to sustainability as well as poverty reduction.
Minister Thahane strongly agreed with the doctor's position. By

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clearly setting out the MCC's expectations, Dr. Mans set the
stage for MCC Washington's next steps toward conclusion of
preparations for final negotiations on the compact. END COMMENT.
PERRY