Why South Africa pays Lesotho billions for water every year
Lesotho earns M350 million (approx. US$18 million) every month from South Africa through the Lesotho Highlands Water Project (LHWP), a cross-border scheme that diverts water from Lesotho’s mountains into South Africa’s heartland.
Natural Resources Minister Mohlomi Moleko told parliament that Lesotho has received over M20 billion (approx. US$1.04 billion) in royalties since water deliveries began. The payments now form the country’s third-largest revenue source after taxes and SACU receipts. “Average receipts amount to about M350 million per month, or M4.2 billion annually,” Moleko said. Funds flow into the national budget and are used for programmes in education, health, infrastructure and community development.
The LHWP, launched in 1986, supplies South Africa with an average of 780 million cubic metres of water each year, helping meet demand in the water-stressed Gauteng region.
The project has also created major economic activity inside Lesotho. More than 10,000 jobs were generated in Phase IA, nearly 9,000 in Phase IB and 16,165 in the ongoing Phase II, with most positions filled by Basotho nationals. The scheme has supported skills training and youth employment initiatives.
A total of 695 households have been resettled across the first two phases, with 296 more earmarked for relocation under Phase II. Compensation payouts now total M628 million.
This story is written and edited by the Global South World team, you can contact us here.
