Lesotho receives US$10mn loan and grant
Thursday, 22 December 2011 16:52
US$10mn IFAD loan and grant to Lesotho to increase agricultural production by small farmers
The International Fund for Agricultural Development (IFAD) will provide a US$5mn loan and US$5mn grant to the Kingdom of Lesotho to increase market opportunities for smallholder farmers and improve agricultural productivity in four of the ten districts of the country- Botha-Bothe, Leribe, Berea and Mafeteng. The loan and grant agreement for the Smallholder Agriculture Development Project was signed by Jonas Sponkie Malewa, Ambassador of the Kingdom of Lesotho, and Yukiko Omura, Vice President of IFAD.
Over 70 per cent of the country’s population live in rural areas. More than three quarters of these people are engaged in agriculture. Until a few years ago remittances from migrant mine workers in South Africa were a major source of income for rural people, providing vital cash needed to purchase agricultural inputs and productive assets or to invest in household assets and housing. However, a steady decline in remittances over the past years has hit hard rural populations. Although there has been some economic growth in the country, income generating opportunities are still limited in the rural areas.
The new project will support smallholder farmers and farmer groups to take advantage of opportunities to increase agricultural productivity and diversify into market oriented agriculture. To help develop markets for their outputs, the project will also support agriculture-related rural businesses.
Co-financed by the International Development Association of the World Bank (IDA) through a US$10mn credit and the government of Lesotho, about 15,000 rural households will directly benefit from the project, of which about 50 per cent are women. With this new project, IFAD will have financed eight programmes and projects in Lesotho for a total IFAD investment of approximately US$60.3mn benefitting more than 130,000 households.