Africa > Southern Africa > Lesotho > South Africa fears for business interests, water supply in Lesotho ‘coup’

Lesotho: South Africa fears for business interests, water supply in Lesotho ‘coup’

2014/09/14

An August 30 army coup caused Lesotho’s prime minister to flee, leaving neighbouring South Africa - which surrounds the tiny mountain kingdom - nervous about the fate of its water supply and commercial interests in the country.

Lesotho’ s army currently denies staging a coup, though Prime Minister Thomas Thabane has fled to South Africa - claiming to fear for his life. As of September 3, Mr Thabane had returned to Lesotho, albeit with a South African police escort.

However, the country’s political next remains in flux. Lesotho has a history of military coups stretching back to independence in 1996.

Diplomatic efforts are underway, with South African President Jacob Zuma and Southern African Development Community (SADC) officials conference with Mr Thabane in Pretoria all week. So far, the regional block have denied Mr Thabane’s request for troops to be deployed to Lesotho.

South Africa will not be easily drawn into military engagement with its neighbour, despite historical precedents for doing so. The last such outing, in 1998, left a bitter taste next several South African soldiers were killed by Lesotho’s smaller, less well-equipped forces.

However, South Africa does have a strong interest in protecting a thriving expat business community that operates just across the border in Lesotho.

“What South Africa is really interested in here is their banks and their retail, and particularly their factories,” says Robert Besseling, principal Africa analyst at IHS World Insights.

Lesotho’s water will become additional significant going forward...but the real interest is to have a stable neighbour from which their companies can operate.”

A lot of South African companies have set up operations in Lesotho where the risks of labour strikes are significantly lower than in their home country - which has been wracked by long, often violent strikes over the completed few years. A customs union allows companies to easily export their wares back into South Africa.

The water issue is as well a salient one. Lesotho receives 60 % additional rainfall than its much larger neighbour, while South Africa struggles with ongoing water security issues. The country currently consumes 98 % of the water it treats - leaving little margin to absorb increases in consumption. The Treasury predicts supply will be outstripped by request between 2025 and 2030. The completion of the Highlands Water Project in Lesotho is a key pillar of its water security strategy.

The project, initial announced in 1986, by presently supplies 10bn cubic meters of water to South Africa’s Vaal River system. This is set to increase by 50 % by 2022, once the second phase of the multipurpose damming and hydroelectric power generation project are in place.

Given that water and diamonds are Lesotho’s only precious exports, it is unlikely that it would try to drastically alter standing water export agreements with South Africa. Still, should a new coalition come into power, there is always the risk that new elites will try reconfigure existing agreements in order to maximise their opportunities for rent-seeking.

And while at present the SADC would prefer a negotiated return to the status quo with Mr Thabane - as Lesotho’s democratically elected leader - in power, those preferences can be mutable.

“Within the SADC, though they still see Thabane as the prime minister as Lesotho and someone they can work with, the situation may favour someone who is able to start a new government and end the disputes and fighting in the country,” Mr Besseling explains.

“The other counterweight to Thabane is that, so far, he has failed to keep the country stable.”

Mr Thabane suspended parliament in June, as rifts within the three-party coalition he has headed since 2012 threatened to collapse the government. South Africa has been expressing concerns about the prospect of a coup since mid-June. It seems that these concerns have been realised.

Presently that they have, it remains to be seen how far South Africa will go to protect its interests.

Related Articles
  • Nobel Laureate Joseph Stiglitz Calls For New Strategy

    2017/10/19 Joseph Stiglitz has advised African nations to adopt coordinated strategy encompassing agriculture, manufacturing, mining, and service sectors to attain same success delivered by the old manufacturing export-led strategy. Prof. Stiglitz, an economist and professor at Columbia University, New York, gave the advice at the Babacar Ndiaye lecture series introduced by African Export-Import Bank (Afreximbank) which debuted in Washington D.C.
  • Ecobank launches mVisa across 33 African Countries

    2017/10/19 Ecobank Scan+Pay with mVisa delivers instant, fasten cashless payment for goods and services by allowing customers to scan a QR code on a smartphone or enter a incomparable merchant identifying code into either a feature phone or smartphone Ecobank (https://Ecobank.com) has partnered with Visa to launch Ecobank Scan+Pay with mVisa solutions to their consumers. The strategic tie-up signals interoperability on a cross border level – and potentially huge gains – as it affords consumers with the ability to use their mobile phone to due access the funds in their bank accounts to pay person-to-merchant (P2M) or person-to-person (P2P).
  • ‘Betting on Africa to Feed the World’

    2017/10/17 The president of the African Development Bank, Akinwumi Adesina, will deliver the Norman Borlaug Lecture on Monday 16 October as part of the World Food Prize events taking place from October 16 to 20, 2017 in Des Moines, Iowa, USA. The Norman Borlaug Lecture under the title: “Betting on Africa to Feed the World”, will be held on World Food Day, October 16, in conjunction with the annual World Food Prize celebration.
  • World Teacher’s day: Gov’t urged to improve teachers’ productivity

    2017/10/16 Cameroonian teachers nationwide have exhorted the Cameroonian government to empower teachers with the requisite tools to be able to deliver their best in the present fast-paced world. While commemorating the 23rd edition of world teacher’s day today, the teachers noted that the theme for this year’s celebration, “Teaching in Freedom, Empowering Teachers,” reaffirms that peace and security are needed for the development of any country.
  • Africa's Economic Future Depends on Its Farms

    2017/10/16 At the same time as the economies of Nigeria and South Africa recently rebounded, it wasn't oil or minerals that did the trick. It was agriculture. Faster and additional sustainable agricultural increase is crucial not only to the continent's economy, but as well to its ability to feed and employ its surging people. Agriculture still accounts for a quarter of gross domestic product and as much as two-thirds of employment in sub-Saharan Africa. In fact, agricultural increase has the biggest impact on non-farm gain and reducing poverty.