Lesotho pushes for bigger share in key water deal with South Africa

Stephen Grootes speaks to Prof Mike Muller, Visiting professor, School of Governance at University of the Witwatersrand about the country’s push to reopen negotiations with South Africa over royalties and compensation tied to the Lesotho Highlands Water Project, which supplies Gauteng with water and makes up roughly 10% of Lesotho’s economy.

Listen to the interview in the audio player below.

Lesotho is preparing to enter into talks with South Africa to revise the terms of a long-standing water-sharing agreement that plays a major role in its economy.

The agreement forms part of the Lesotho Highlands Water Project, a large cross-border system that supplies water from Lesotho to South Africa.

For Lesotho, the project is economically significant, accounting for roughly 10% of its economy through royalties and related income.

The current agreement dates back to 1986, and Lesotho believes it no longer reflects today’s economic realities.

Lesotho argues that the structure needs updating to better match the scale and value of the project today, and it wants a compensation model that runs until 2044.

Speaking to Stephen Grootes on The Money Show, Prof Mike Muller, from School of Governance at University of the Witwatersrand says Lesotho will want to ensure this arrangement is beneficial to them. 

"The basic principle is that South Africa saved a lot of money by taking water from Lesotho. Instead of pumping it up from the Orange river from Aliwal North, allowing it to run down from the mountain towards Gauteng, we saved a lot of money."

- Prof Mike Muller, School of Governance - University of the Witwatersrand

"It was agreed that if we were going to use Lesotho territory to bring the water to Gauteng, we need to pay Lesotho some compensation. And that compensation was calculated on the basis that they were helping us to save money, they deserve a share of that saving."

- Prof Mike Muller, School of Governance - University of the Witwatersrand

"It's done well for both countries. South Africa's saved money and got water reliably, and Lesotho's got a reliable share of revenue."

- Prof Mike Muller, School of Governance - University of the Witwatersrand

Scroll to the top of the article to listen to the full interview.