Remarks by MCC CEO Ambassador John Danilovich at the Investors and Trade Forum for the Lesotho Compact


Good morning!

The Right Honorable the Prime Minister Mr. Pakaliithe Mosisili ,
Distinguished ministers and members of the delegation from Lesotho,
President Hayes of the Corporate Council on Africa,
Friends of Lesotho from the business and investment communities,

We will meet at the State Department later today for a momentous occasion—the signing of a nearly $363 million compact between the Millennium Challenge Corporation and the Kingdom   of Lesotho. 

This compact reflects the priorities outlined by the Basotho themselves and focuses on 3 areas that they have determined to be essential for reducing poverty and stimulating growth in their country.  They include

  • improving the water supply for industrial and domestic uses,
  • strengthening the health care sector,
  • and bolstering private sector activity.

And, in working toward these goals, Lesotho sends a crystal-clear message that it is open for business.

Discussing business and investment opportunities in Lesotho in general, and particularly because of this compact, is a fitting topic for this event, co-hosted by the Corporate Council on Africa.  Dedicated to strengthening and facilitating the commercial relationship between the United States and the African continent, CCA is a worthy partner in organizing today’s meeting, and many thanks to you, Steve, and your team for all your efforts.  In addition to thanking our partner CCA, I would also like to thank our sponsors, The Whitaker Group and Standard Bank, for making this event possible.

The Corporate Council on Africa and MCC believe that Africa’s sustainable success depends on the ability of its entrepreneurs and businesses to stimulate growth and create wealth through private enterprise.

How the compact helps Lesotho “open for business”

Lesotho’s two greatest strategic resources are

  • its water and
  • its people,

and the compact we sign today focuses on the power and potential of both so that Lesotho can, indeed, open for business.

Let me explain how by reviewing the compact’s 3 main goals.

First, being open for business requires adequate water supply for productive capacity.  In a country where the largest employer—surpassing the government itself—is the industrial sector—led by the garment and textile industries—which produces almost 2 million pairs of jeans per month and ranks as the largest textile producer under AGOA—water is vital.

Consequently, the more than $160 million water project includes activities that will improve the water supply for industrial and residential uses.  The infrastructure to deliver water to industries will be strengthened, and system upgrades will increase the water supply’s sanitation and reliability for urban and rural residents. 

Second, being open for business requires healthy people. In a country that is experiencing the third highest rate of HIV/AIDS cases in the world—where more than a quarter of the population is ill—the well-being of the Basotho is critical to ensuring their ability to contribute productively to the country’s economic development.

As a result, more than $120 million of the compact’s total will be invested to mitigate the negative economic impacts of

  • poor maternal health,
  • tuberculosis,
  • and other diseases. 

This will be done by

  • rehabilitating antiretroviral therapy clinics and 150 health centers,
  • constructing a central laboratory and blood transfusion center,
  • expanding health training for nurses,
  • and improving medical waste management.  

And, third, being open for business requires creating an environment in which the private sector can

  • compete,
  • engage,
  • and flourish.

For Lesotho, trade is critical for business and it is important to be part of—rather than isolated from—larger markets for export, like the emerging Southern African Development Community, which will become a common market in 2008.  Preparing for this requires that the private sector has a stable framework for doing business—from secure land tenure for property on which they conduct their operations, to the enforcement of contracts.

Almost $40 million of the Lesotho-MCC compact will bolster private sector activity by

  • improving access to credit,
  • reducing transaction costs,
  • and increasing the participation of women in Lesotho’s economy.

It will

  • improve land administration,
  • modernize the commercial legal system,
  • and provide credit bureau services to foster the growth of local companies and attract foreign investors. 

Conclusion/Call to Action to the Private Sector

These investments expand opportunities for doing business with Lesotho, and we appreciate your participation today to learn more about these opportunities. I invite the business community to leverage MCC investments in Lesotho and use them for complementary or parallel investments of your own.  

The fact that MCC is investing in Lesotho should encourage your own investment, because it is no small feat for a country to qualify for our assistance.  As an innovative approach to development assistance, MCC is a bilateral, American program, providing grants—not loans—to countries that are doing the right things for the right reasons.

MCC rewards good government, good governance, countries that invest in their people, and provide economic freedom—all of this being the foundation upon which we can build programs for the reduction of poverty and sustained economic growth and the creation of stability and security.

We are fulfilling the mandate given to us by the U.S. Congress when they created MCC in 2004.  And, only with Congress’s support for sufficient funding will MCC be able to continue to fulfill our mission throughout the world.

On the 16

  • political,
  • economic,
  • and social criteria

we currently use to select our partner countries, Lesotho’s performance is excellent,  passing all but one of our 16 indicators.

Clearly, Lesotho is already committed to broader reforms that make the country attractive for doing business. And, MCC’s investments reinforce such reforms.  We help create and sustain a viable

  • physical,
  • financial,
  • and policy infrastructure

that gives the private sector a favorable point of entry to initiate or expand its own commercial activities. 

It might seem unusual to you for a U.S. government agency, such as MCC,  dedicated to development assistance, to also push for private investments. Yet,  it is clear that development assistance alone will never defeat poverty.  MCC believes that development assistance can best be used to build

  • a foundation,
  • a starting point,
  • a springboard


  • stimulate,
  • attract,
  • and leverage

what is essential for generating transformative growth: namely, private enterprise

MCC’s role is to help our partner countries transition from dependence on foreign assistance to the independence of sustainable,  investment-driven development, so as to have a meaningful and lasting impact on the lives of the poor. 

This is what brings us together today, and this is why the Millennium Challenge Corporation welcomes partnering with the private sector in Lesotho and in all our partner countries.

Introduction of Prime Minister Mosisili

It is now my great privilege to introduce The Right Honorable the Prime Minister Mr. Pakaliithe Mosisili.

With an extensive background in education as an

  • academic,
  • teacher,
  • lecturer,
  • and headmaster,

Prime Minister Mosisili was first elected to Parliament in 1993. 

He served Lesotho as Minister of Education and Training,  Sports, Culture and Youth Affairs and later as Deputy Prime Minister and Minister for Home Affairs and Local Government

Please join me in welcoming Prime Minister Mosisili to the podium.