Draft Format for Project Documents - GTR 07/08/97 UNITED NATIONS VOLUNTEERS PROGRAMME SPECIAL VOLUNTARY FUND PROJECT DOCUMENT

Project No.:

Project Title: Labour-intensive Urban Upgrading Programme

Location: Maseru -

Executing Agency: ILO and UNV

Implementing Agency: Maseru City Council

Co-operating Partner(s): Labour Construction Unit

Backstopping UNV Group/Section: Research and Development Section (Urban Development Group), UNV Headquarters, Bonn

Commencement date: October, 1998

Duration: 24 months

Funding Source(s): UNV’s SVF & ILO

Project Budget: US$ 500,200.00

Brief Project Description and Strategy 2000 context: The project will address the growing problems of urban unemployment and poverty in Lesotho by building capacity within the Maseru City Council to plan and implement urban upgrading schemes using labour-based methods. Working through NGOs and poor urban groups, the project will secure the maximum possible participation of the target population and contribute to the stimulation of the local economy through employment expansion and creation of cash incomes. The project builds on UNV’s previous experience in grassroots mobilization and empowerment and emphasizes urban development and environmental management. Recommended for approval:

______PAC Chairperson Date

Approved:

______Executive Co-ordinator Date

1. BACKGROUND & JUSTIFICATION 1.1 Country Context Lesotho ranks among the world’s poorest countries and falls in the category of least developed countries (LDCs). Within the 12-member Southern African Development Community (SADC), it has the 6th lowest per capita GDP and the 11th lowest export receipts. Unemployment rate in the country is equally one of the highest in the region and has been growing in recent years, even among University graduates. Recent estimates by the Ministry of Labour and Bureau of Statistics suggest that about 34% of the population may be openly unemployed, with women constituting the majority of the jobless. Evidence of high underemployment abounds and this clearly makes the already desperate situation even worse.

Historically, Lesotho’s domestic unemployment problem had been relieved through labour migration to the South African mines where, up to 1993, as many as 40% of the country’s male labour force was employed. The remittances of these mineworkers has always been the single most important source of family income in Lesotho and contributes to a large extent to household subsistence and domestic investment.

During the present decade, employment in the South African mines seems to have peaked in 1990 at 103,000 Basotho, but has been falling ever since. At peak level of mine employment, the remittances from RSA constituted some 30% of the GNP of the country. In 1990, miners’ total remittances came to about 474 million maloti (or US$183m), and in 1994 it is estimated that the remittances amounted to some 330 million maloti (the equivalent of US$95 million). The downward trend has continued since then. By 1997 only about 90,000 Basotho, or 19% of the male labour force, were working in the mines in South . This has been the result of contraction of the South African labour market and the on-going policy of retrenchments at the mines in response to the deteriorating cost situation. In addition, the new immigration policy which grants residence permit to long-serving miners means that over time, more miners will be residing in RSA with their families. Thus, even if the on-going retrenchments at the

2 mines were to stop, there is no doubt that the current drastic reduction in the level of remittances will continue.

The macroeconomic situation of the country derives mainly from the absence of important deposits of exploitable resources. In addition to this, the country’s mountainous topography renders virtually all the land inappropriate for agriculture, leaving just about 9% of the total land area suitable for arable farming. Many households therefore lack access to farmlands of the right economic sizes to support other than merely subsistence production. Agriculture’s contribution to the nation’s GDP thus remains a meagre 10% despite having as much as 50% of the population reportedly living off the farm. Dwindling agricultural incomes have thus become a permanent feature of the rural areas where up to 80% of the population may still reside.

Understandably, rural-urban migration has intensified in recent years with urbanization estimated to be growing at the rate of 6% per annum, estimated to be higher than the average growth rate for the region. If current trends persist, it is estimated that more than 25% of the population will be living in the urban areas within the next two years. Urban services that are already overstretched are poised to become overwhelmed as a result. And in the present situation characterized by slow growth of job opportunities throughout the economy, newly-arriving migrants face very unpleasant prospects of the increasing frustration of being jobless for prolonged periods.

The emerging scenario therefore is that of an urban poverty problem that could pose more serious embarrassment for policy makers given the greater political awareness of urban dwellers. Urban poverty differs from rural poverty in terms of the high vulnerability of the urban poor to unstable market conditions since they do not have the option to fall back on an agrarian support system unlike their rural counterparts. At the same time, there are no functional social security mechanisms to buffer the poor from the harsh realities of their condition.

3 But there has been a positive development in the past few years regarding internal revenue generation for development purposes. This has been in the form of the Lesotho Highlands Water Project which was established in 1989. The aim of the project is to harness the abundant water from the Maluti mountains and deliver them through a network of dams and tunnels to the industrial zones of the Republic of . When the project is completed in a few years it is expected that the annual revenue from the sale of water will amount to about US$55 million which is estimated to represent some 14% of government revenues. At a time when foreign development assistance to Lesotho is on the decline, particularly since the end of the apartheid regime in South Africa which ended the bridgehead status of Lesotho, the new window of opportunity offered by the LHWP revenue has been widely welcome.

1.2 The Infrastructure Situation The peculiar mountainous topography and unique climatic conditions of Lesotho predispose it to a wide variety of ecological conditions. The country has the distinction of having its lowest point more than 1,000 metres above sea level, approximately 80% of the area being above 2,000 metres, and the rest of the country generally characterized by high elevations and rugged terrain. The torrential rains, thunderstorms and high, violent winds that feature at the end of winter, generally from the end of July, combine with the very thin soil cover to cause quite extensive damage to the environment through soil erosion.

The result of the above situation is that land degradation is progressing in many parts of the country at a very rapid pace. The most notorious manifestation of the environmental damage is the so-called “dongas” or gullies which dot the landscape and pose serious threat to public safety. The incidence of these features complicate the problems faced by the construction industry. As a result, the quality of various categories of infrastructure often tend to be inconsistent. There is also acute shortage of good quality housing, clean water, drainage facilities and arrangements for solid waste disposal.

4 Access constraints are quite severe and have far-reaching economic consequences due to high transport and road user costs. The soil erosion, coupled with often inappropriate construction practices, cause the roads to deteriorate rapidly and expose lose stones and potholes which make motoring very difficult and distressful. The situation in the urban areas is not different. In the case of the Maseru Council area, almost all the roads are underlaid by clay soil. Due to the high proneness of this soil type to erosion, pot-hole formation is frequent and a majority of the roads are not motorable.

There is also the problem of inappropriate policies for human settlement management and failure to enforce legislation on construction practices. For instance, service lines such as water pipelines, power and telegraph cables are not laid in accordance with proper procedures and location plans are generally not available. Thus, when these lines are to be maintained, the process of trial-and-error needed to locate them results in extensive corrugation of the road network which adds to the access difficulties in the metropolis.

1.3 Capacity Constraints Lesotho suffers from acute manpower shortage and capacity constraints which exacerbates its dependency situation. For virtually all skill areas, the country relies on external sources for qualified personnel. The country has continued to recruit school teachers, medical doctors, accountants, engineers, and just about any profession, from other African countries and beyond. It is not uncommon to find entire government departments being manned by foreign professionals. Many donor-assisted programmes which are predicated on the principle of transferring know-how to trained nationals are frustrated by the difficulty in identifying local persons to serve as counterparts to the technical assistance personnel.

This situation of chronic shortage of high level manpower in the country has been attributed to the phenomenon of “brain drain”. This phenomenon assures that the large investments in education and training to develop the nation’s human resources do not yield any tangible results. A recent study sponsored by the UNDP and the

5 Commonwealth Secretariat concluded that the destination of the majority of Basotho professionals is the Republic of South Africa where working conditions are generally better than in Lesotho. According to the study, poor levels of remuneration, political instability and lack of opportunities for career progression and job satisfaction are the common causes of the high incidence of brain drain. In the light of these reasons, coupled with the unique location of Lesotho and the peculiar relationship it enjoys with RSA, it is highly unlikely that the manpower profile of the country will change in the foreseeable future.

The situation in the Maseru City Council (MCC) is quite typical. The Infrastructure department of the Council is managed by a City Engineer who is assisted by a Chief Engineer (works) and a Deputy City Engineer. The Deputy City Engineer is a foreigner. Out of the 24 established senior technical positions in the department, 12 are vacant and one person is away on course.

2. STRATEGY 2000 SUPPORT The initiative being proposed will have three components, namely direct investment in urban infrastructure works, institution building, and a sector-specific action-research aspect. Broadly, the direct investment component will use labour-intensive techniques to upgrade Maseru’s urban infrastructure and this will link up with the institution building component which will involve the establishment and staffing of a labour-based unit within the Maseru City Council to assume full responsibility for planning and implementation of urban infrastructure works using labour-based, employment-intensive methods. The third component involving sector-specific action research will employ the instrumentality of a local UNV network (both international and national volunteers) to work with different urban administrations in the country to analyse their investment plans and policies and propose opportunities for increasing impact on quality and quantity of employment through various means of action, including labour-based upgrading, small contractor development, community contracting and informal sector development. The action research is also a basis for initial programming of possible future expansion into

6 other urban areas in the country and assessing the willingness and capacities of other partners in the context of an enlarged programme of development assistance.

In relation to the institutional building and direct investment aspects, this approach will maximize the utilization of locally-available resources and labour and promote the employment of unskilled, surplus labour composed largely of the urban poor. Through the use of locally-sustainable methods, the approach will promote the self-reliant maintenance of the installed infrastructure which will guarantee long-term employment generation in infrastructure development.

This approach relates to UNV’s Strategy 2000 in focusing on urban development in both physical and economic terms. By promoting the use of labour-intensive methods, the approach will create jobs and income among the very poor whose enhanced spending power will stimulate the urban economy and encourage enterprise in the products that the poor buy for their subsistence. As well, experience has shown that because of its unique topography and climate the use of equipment-intensive construction methods are inappropriate for the Lesotho environment. Thus, the use of labour-intensive methods which result in minimum disturbance of the soil structure will promote environmental protection.

The UNV involvement in this initiative will have important practical implications. The UNV has generally excelled in programmes where mobilization of the poor at the grassroots level is a central implementation strategy. The poor urban settlements of Maseru are challenging areas to work in and require the application of participatory approaches in which the UNV has considerable expertise. These approaches have been employed with great success in the UNV-executed Grassroots Initiative Support Project (GRISP) which was implemented in Lesotho over a period of 45 months and stands out today as one of the best-implemented UNDP programme in the country.

3. PROJECT STRATEGY & APPROACH

7 3.1 Pre-Project Situation The severity of urban poverty is only now being fully understood in Lesotho. A recent assessment of urban poverty in the country agrees with an earlier World Bank finding that 27% of the urban population outside Maseru and 28% of the Maseru population live below the poverty line. In Maseru alone, the assessment concludes that 37% of the population are poor while 18% are classified as “ultra-poor”. The “poor” are defined in the studies as those who spend “only up to 50% of the average adult equivalent expenditure of the population”. The “ultra-poor” are those whose expenditures are only up to 25% of the average adult equivalent expenditure of the population.

The studies present a picture of increasing destitution and pauperization of the urban population in the late 1990s. The on-going retrenchments at the South African mines are no doubt a contributory factor. The remittances from migrant Basotho labour provide the lifeline for 70% of rural households. With the erosion of these remittances, these rural households become exposed and migrate to Maseru in search of jobs. Given the contracting internal labour market in Maseru, these households become locked into a “poverty trap” characterized by lack of employment and income, inability to meet basic needs including shelter, food and clothing, and proneness to preventable diseases. It has been reported that access to water supply, electricity, adequate transportation, and quality health services, is still very limited among the poor. School drop-out rates which have been high among the poor households has been growing among this group in recent times. Even those who are still able to maintain their children in school can only pay for facilities where standards are rather low.

The Urban Poverty Assessment has identified the poor in Lesotho as the female-headed households, street children, street vendors, the beer brewers, the shebeen men and women, the piece job workers, and the households of ex-mine workers. The shebeen is a locale for drinking traditional beer and commonly located in low-income areas. Of all of these, the recent phenomenon of street children is the most worrisome. These children are mostly boys with the number of girls now beginning to grow. They are generally in the 10 to 18 years age group and have come to live on or off the street because their families

8 are unable to provide for them. In having to fend for themselves, the street children sell newspapers, wash/watch cars, carry loads for shoppers and beg for money to buy food. When these activities fail to bring in enough money for food, these street children scavenge for food in garbage dumps or engage in criminal activities. It is now well known that these children are employed by drug dealers for distribution of their dangerous merchandise. The big time drug dealers, or “barons” as they are known, find it necessary to equip these youths with shotguns as protection against violent attacks. Thus empowered, these youths become quite daring and use guns to terrorize the general public and intimidate people into donating money or hiring them to wash or watch their cars, etc. The emergence of criminal behaviour can therefore have quite innocent beginnings. There is broad agreement in Maseru that this is now a very serious problem and people are cautious about the way they react to the persistence of these street beggars or those who offer their services for such things as carrying a near-empty shopping bag or watching your car in a crowded street.

3.2 Conceptual Approach of the Project The project builds on existing knowledge and experience about the efficacy of the labour-intensive technology in relieving the problem of unemployment and underemployment when it is applied to the construction, rehabilitation and maintenance of infrastructure. Experience from around the world has shown that this approach is appropriate for dealing with the immediate development concerns of countries where capital is scarce such that locally available resources, including labour, become more competitive. This situation is often exacerbated by the lack of indigenous manufacturing capacity which means that heavy equipment needed to execute equipment-intensive construction works must have to be imported.

In such situations, it has been found that the use of labour-based technology can lead to considerable cost savings while at the same time creating employment for the surplus manpower in the country which would otherwise be unable to find jobs. For a resource- poor country with very little foreign exchange earning, this is a very sensible development path to the extent that it creates durable assets that promote long-term self-

9 reliant development while providing the much needed safety net for the population during a difficult period of adjustment. At the same time, the use of labour-intensive technologies has been found very effective in the organization of communities around strategic development initiatives which call for the active broad-based participation.

This approach has been demonstrated in Lesotho under an ILO-assisted project which established the Labour Construction Unit (LCU) at the Ministry of Works with support from the Swedish Development Agency ( SIDA). Through its work, the LCU has been able to build confidence among the policy makers in the effectiveness of the approach and its enduring relevance to the socio-economic situation of the country, particularly in relation to its resource profile, ecological conditions and the extent of unemployment and underemployment. However, the LCU has focused over the years on rural infrastructure and there has not been any attempt to extend this technology to the improvement of urban infrastructure.

3.3 Associated Partners of the Project The idea of the project arose from a series of discussions between the UNV and ILO in the context of the implementation of the prescriptions of the Habitat II conference held in Istanbul in June 1996. UNDP Lesotho, as a follow up to that conference, undertook a study in October and November 1997 to assess the extent of urban poverty in country. The conclusion of that study that urban poverty was growing in Lesotho led to a workshop at which wider in-depth discussion of the subject yielded further insights and a preliminary decision to have an operational follow-up in the form of a project.

Following this, contact was established simultaneously with the Labour Construction Unit and the Maseru City Council. Under the present arrangements for upgrading of urban infrastructure, the Maseru City Council is the lead implementing agency. The funds available for urban infrastructure from the Lesotho Highlands Revenue Fund are specifically targeted to the poor through the use of labour-intensive methods. Although to date, there has been no mechanism for linking up with the LCU to take advantage of the available know-how, each agency is aware of the relevant institutional needs and there is

10 evidence of a preparedness to collaborate under a mutually conducive institutional framework.

The Maseru City Council’s estimated annual budget for roads is about M40 million. This is for the rehabilitation and maintenance of the roughly 560 km. of roads managed by the Council. According to available statistics, 64% of the Council’s roads, measuring about 355 km., are unsurfaced roads, 25%, or 140 km., are gravel roads, while 10%, or 55 km., are bitument roads. Only about 10 km. of the Council’s roads, or 1%, are new roads and upgrades. These statistics are displayed in the following Table.

Table 3.1: Maseru City Council - annual road budget and responsibility Type of Roads Total Road Length Unit Cost Total Road Budget (Km) Maloti/Km (M) Bitumen roads 55 45,000.00 2,475,000.00 Gravel roads 140 96,000.00 13,440,000.00 Unsurfaced roads 355 60,000.00 21,300,000.00 New roads/upgrade 10 278,500.00 2,785,000.00 Total 560 40,000,000.00 Source: Information material from Maseru City Council, July, 1998.

The road projects undertaken by the Maseru City Council in the framework of the funding from the Lesotho Highlands Development Revenue Fund are specifically intended to use labour-intensive methods. The Council’s budget update on these projects released on 26 June, 1998, lists a total of 16 roads covering various Maseru suburbs, including Matsoatlareng, Sea Point, Thibella, Moshoeshoe II, Hoohlo, Pitso Ground, Maseru East, Khubetsoana, Qoaling/Thetsane, Tsenola/Botsabelo, Makoti/Sefateng, Phatlalla-Lancers Gap, Motimposo/Tsenola, Botsabelo/Thamae Dam, Thamae/Lancers Gap, Tsenola/Tsosane. For the period 1997/98 - 1998/99, the amount allocated from the Lesotho Highlands Development Revenue Fund was M5,126,762.

3.4 Nature of UNV Input Foreseen

11 A total of 7 UN volunteers will be needed on the project. Of this, 4 will be international UNV Specialists, while 3 will be national UNVs. The 4 international UNV Specialists will include 2 civil works engineers, one participatory development specialist, and development economist. The three national UNVs will be middle-level supervisory personnel who would normally be expected to hold technical diplomas from the Lerotholi Polytechnic in Maseru or equivalent qualifications from elsewhere.

One of the civil works engineers will be a very experienced labour-based engineer who will be expected to head the technical assistance team. The other engineer will be a training expert and will have the responsibility for capacity building of national project personnel, participating groups of the urban poor, NGOs which will be strengthened to plan and implement labour-intensive infrastructure works, and other entities as may be identified in the course of implementation.

The national UNVs will include one participatory development specialist, one information officer, and a socioeconomist. The NUNV participatory development specialist will work hand-in-hand with the international UNV participatory development specialist and will be responsible for identifying local issues around which it will be necessary to organize mobilizational interventions in order to promote wider involvement of the population. The key concern will be to more effectively target the poor and ensure that a large proportion of project funds reach the target population. In this, the NUNV participatory development specialist will play a lead advisory role in the team based on his/her intimate knowledge of local conditions and income distribution patterns. The NUNV Information Officer will be responsible for the media relations aspects of the project and will provide a constant flow of information about the project to the larger society to ensure that there is clear awareness about the activities going on under the project. The NUNV socioeconomist will liaise with the rest of the team to establish socioeconomic criteria for subproject selection and determine the impacts in terms of employment generation, cost effectiveness, etc. It will also be the role of the NUNV socioeconomist, with the collaboration of the rest of the team, to work out the extent of

12 labour availability in the catchment areas of the identified subprojects. The UNV development economist will liaise with a short-term international consultant and officials of UNV (Urban Development focal point) and ILO (EIP of POL/DEV) to draw up the design for the sector-specific action research. The UNV development economist will also be responsible for the implementation of the research activities under the direction of the senior UNV labour-based engineer and the City Engineer of the Maseru City Council.

3.5 Co-ordination With On-going/Completed Programmes The proposed project will link up with another proposed project entitled: “Empowerment of Self-Help Community Groups for Poverty Alleviation in Lesotho” which was submitted to UNV Headquarters and is currently being considered for Irish funding. The community empowerment project proposes to strengthen the common interest groups to implement development programmes including infrastructure works. Given the congruence of their objectives in employment generation and poverty alleviation, there is immense scope for sharing of information and experiences between the two projects. Such congruence of objectives can also contribute to cost effective management of both projects through exchange of expertise and results which will eliminate duplication of efforts and activities.

The proposed project equally shares some interests with an on-going UNDP-assisted programme entitled: “Establishment of a National Environment Youth Corps in Lesotho - LES/94/008”. The NEYC programme aims to create employment among rural and urban youth through the implementation of a number of environmental rehabilitation and protection activities, including gully correction. Given this orientation, there is every likelihood that a large body of intimate local knowledge about how to deal with such environmental problems will already be available at the time the proposed project takes off.

Additionally, the NEYC programme is currently utilizing three international UNVs and has an active pipeline international UNV post to fill. The programme is also about to engage the first-ever national UNV as Information Officer. Thus, there is ample scope for

13 cooperation between the two project at both the professional and personal/social levels among the UN Volunteers. There is also room for professional exchanges between the project and the Labour Construction Unit.

The above interactions and contacts will be mediated through a number of formal arrangements, including:

(i) Setting up a technical steering committee to be known as the Urban Development Technical Steering Committee which will monitor the implementation of the urban development programmes against a set of pre-determined criteria, including employment generation, reduction in number of street children, improvements in the physical condition of urban infrastructure, etc. The membership of the committee will comprise representatives from the Maseru City Council, Ministries of Works, Agriculture, Local Government/Rural and Urban Development, Labour Construction Unit, Lesotho Highlands Revenue Fund, the Lesotho Council of NGOs, and UNV/UNDP.

(ii) Co-ordination by the Ministry of Local Government, Rural and Urban Development within the framework of the Community Empowerment Group’s meeting to monitor the progress of works and establish guidelines for urban development.

(iii) Periodic people’s forum organized within the poor urban settlements to assess the mood of the beneficiaries in respect of progress of the works and satisfaction of their basic needs.

The component on sector-specific action research link up with a number of on-going UNDP-assisted projects, including the Urban Poverty Assessment and the HABITAT initiatives. There will be substantial synergy between the component and the on-going National Rural Development Programme (NRDP) in respect of activities and programming in the districts some of which fall under the definition of “urban areas”. In this regard, the project will be represented on the Community Empowerment Group and

14 share information with the rest of the membership drawn from other organizations currently working in the field of urban development.

The research component will also link up with the on-going UNDP/ILO-assisted project on Employment Policy Formulation and Labour Market Analysis (LES/94/004). This project is generating data and information essential for the formulation of improved employment and labour market policy in Lesotho. The project has recently completed the first draft employment policy for the country and has also profiled special employment schemes implemented in the country over the years. These reports, documents and data will form very useful background material for the work of the research team which will draw immense benefits from cooperating closely with LES/94/004.

3.6 Sustainability Issues The essential element for sustainability and local-level continuation of project activities following project termination is that the capacity of the local personnel and host institution is built up to the extent that activities can be managed without external involvement. This brings up once again the importance of counterparts for the technical assistance team. For various reasons already highlighted, this has hitherto been a serious concern in Lesotho and revolves around the problem of brain drain. Resolving the problem of brain drain is one that calls for action at the national level and will no doubt require major changes in the working conditions and levels of remuneration and introduce reforms which will provide ample opportunities for career progression and job satisfaction.

Taking all these into account, the present proposal is being made to utilize a crop of national UN Volunteers. It is expected that the technical skills of these NUNVs will be sharpened in the course of their involvement on the proposed project. This will put them in a position to constitute the core of national expertise to carry on the project activities at the expiry of international assistance. They also have the critical role of being reference points for purposes of convincing local people to remain at home to support national development initiatives.

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Another element in ensuring sustainability of the project is the proposed link up with the Lerotholi Polytechnic which can be encouraged to introduce aspects of labour-intensive urban infrastructure works in the curriculum for civil engineering education. The students of the civil engineering department will be assigned to do project work on topics related to labour-based activities. It can also be arranged that the students spend part of their internship periods on the work sites to gain experience and familiarity with the methods and be in a position to rationally evaluate the options when faced with a choice between equipment-based and labour-based methods.

4. OBJECTIVES, OUTPUTS & PERFORMANCE INDICATORS 4.1 Development Objectives The key development concern of Lesotho is to generate employment at the rate of 14.4% per annum over the next 10 years (1999 - 2008) in order to achieve a semblance of full employment in the economy. While such a growth target is obviously ambitious, it is a reflection of the anxiety and worry of policy makers at the current near stagnation of employment growth, at about 0.9% per annum over the period 1986 - 1996 and the fact that in 1997 the unemployed made up an estimated 35-40% of the labour force.

The development objective of the project is therefore to create employment opportunities in the urban areas of Lesotho through the use of labour-based technology to upgrade the much deteriorated urban roads. The creation of employment among the urban poor is expected to address the serious problem of destitution in the urban areas and contain the emerging concern of street children, violence and crime. By promoting a local resource- based development process, the project aims to conserve the country’s scarce foreign exchange resources and build indigenous capacity in planning and implementing self- reliant development options.

The proposed project will promote the use of local resources and labour-based methods which are known to be environmentally sustainable. Thus, this approach will support on- going programmes that address environmental protection, including the National

16 Environment Youth Corps, and the National Environment Secretariat. Additionally, a project that employs labour-based methods and trains local people in its applications will equally promote the maintenance culture.

4.2 Immediate Objectives and Outputs The immediate objectives and associated outputs of the proposed project include the following:

4.2.1 Immediate Objective 1 To create employment opportunities within poor urban settlements, starting with Maseru, the of the Kingdom of Lesotho.

Outputs • a total of 200 full time job equivalents created within each urban settlement each year; • incomes of the poor households in the zones of influence of the infrastructure projects raised to above the poverty line;

4.2.2 Immediate Objective 2 To establish a labour-based unit within the Maseru City Council’s engineering department to co-ordinate the development of infrastructure works through the application of locally sustainable methods and making maximum use of local resources and labour wherever factor market realities so justify.

Outputs • labour-based unit in the engineering department of the Maseru City Council established, functioning and fully operational; • policy document spelling out the functions of the labour-based unit prepared, adopted and circulated.

4.2.3 Immediate Objective 3

17 To upgrade the roads and rehabilitate the “dongas” and other physical infrastructure in selected poor settlements of the urban areas of Lesotho, starting with Maseru, using labour-intensive methods and local resources in order to generate employment.

Outputs • roads, gullies and other physical infrastructure rehabilitated to acceptable standards using labour-based methods supported by light equipment; • travel time and commuter waiting time reduced appreciably; • incidence of environmental damage effectively controlled.

4.2.4 Immediate Objective 4 To train national technical personnel of MCC, representatives of the Lesotho Council of NGOs, and representatives of organized urban groups, in the use of labour-based methods for construction, rehabilitation and maintenance of urban infrastructure works.

Outputs • technical personnel of the Maseru City Council, representatives of Lesotho Council of NGOs and organized groups in poor urban settlements trained and capable of planning and implementing programmes of infrastructure works by the use of labour-based technology.

4.2.5. Immediate Objective 5 To undertake sector-specific action research by working with different urban administrations to analyse their investment plans and policies and propose opportunities for increasing impact on quality and quantity of employment through various means of action, including labour-based upgrading, small contractor development, community contracting and informal sector development.

Outputs

18 • the investment plans and policies of urban administration in the country profiled in relation to impact on employment generation; • capacity, resource situation, as well as training and technical assistance needs of the various urban administrations identified and documented; • opportunities for increasing employment and income impact of public investment programmes identified and documented; • comprehensive preparation report completed and submitted for consideration by various donors and governmental departments.

5. ACTIVITIES & INPUTS The proposed project will involve the use of labour-based methods to build a number of infrastructure projects in the urban settlements (starting initially with Maseru) and through these build the capacity within the Maseru City Council, NGOs and poor urban groups, in the application of labour-based technology for urban infrastructure upgrading. As well, a component to undertake systematic data collection and analyses will be included to provide a link to longer-term development assistance embracing other urban areas in the country and promoting employment-intensive development strategies. Thus, the project will embrace infrastructure construction, rehabilitation and maintenance, capacity building through institution building and training, and action-oriented research. Broken down by component and immediate objective, therefore, the activities and inputs under the proposed project can be tabulated as shown below.

Table 4.1: Project Immediate Objectives, Outputs and Activities Immediate Objectives Outputs Activities 4.2.1 Create productive 4.2.1.1. at least 200 persons within each a) identify and select roads employment opportunities urban settlement provided with full-time and other infrastructure to within poor urban settlements, employment in each year upgrade using labour-based beginning with Maseru capital methods. territory b) set up procedure for targeting the urban poor in the zone of influence of the

19 selected projects.

c) conduct labour and wage surveys in the catchment area of selected projects.

d) recruit workers from among the surplus labour in the catchment area of the selected projects.

4.2.1.2. the incomes of persons a) calculate incremental employed on the project raised to levels incomes for workers above the nationally-defined poverty employed under the urban line works programmes

b) compare the incremental incomes of the workers to the nationally-defined poverty line from the Urban Poverty Assessment. 4.2.2. To establish a labour- 4.2.2.1. A labour-based unit in the a) identify the capacity needs based unit within the Maseru engineering department of MCC of the MCC with respect to City Council’s engineering established, functioning and fully planning and implementing department to co-ordinate the operational. labour-based technology. development of infrastructure works through the application b) identify existing personnel of locally sustainable methods to form the technical core of and making maximum use of the new unit and requirement local resources and labour as for additional staffing to required by prevailing market effectively launch the unit. conditions. a) prepare guidelines for 4.2.2.2. Guidelines for the operation of operation of new unit the new labour-based unit prepared, approved and circulated. 4.2.3 To upgrade the roads and 4.2.3.1 The roads, “dongas” and other a) identify road, “donga” and rehabilitate the “dongas” and physical infrastructure rehabilitated to other urban infrastructure other physical infrastructure in acceptable standards using labour-based projects amenable to use of selected poor settlements of the methods supported by light equipment. labour-based technology. urban areas of Lesotho, starting with Maseru, using labour- b) carry out preparatory based methods and local activities on the resources in order to generate infrastructure projects to employment. determine the resource requirements and costs of upgrading them by the use of labour-based methods.

c) undertake construction activities on the identified infrastructure to required technical standards using labour-based methods. 4.2.4 To train national technical 4.2.4.1. Technical personnel of MCC, a) conduct training needs

20 personnel of MCC, representatives of LCN, and organized assessment study to representatives of Lesotho groups of settlers of poor urban determine level of know-how Council of NGOs, and settlements trained and capable of in labour-based technology representatives of organized planning and implementing programmes and capacity constraints. urban groups in the use of of infrastructure works by the use of labour-based technology. b) provide hands-on training to supervisory and technical personnel of MCC’s labour- based unit, representatives of LCN, and representatives of organized poor urban groups, to have the capability to plan, implement, and supervise labour-based works.

c) provide post-course guidance to staff of labour- based unit of MCC.

d) sponsor fellowships for selected technical and supervisory personnel at ILO/ASIST in and .

e) organize workshops for policymakers technical persons, and community leaders. 4.2.5. To undertake sector- 4.2.5.1 Investment plans and policies of a) identify urban areas based specific action research with the urban administrations profiled in terms on national definition. aim of analysing public of employment and poverty alleviation investment plans and policies at impact b) conduct in-depth studies urban administration levels and on various issues related to propose opportunities for public investment, regional enhanced employment impact planning and policies and using various employment- carry out data analysis. intensive options. c) conduct workshops and discussion fora to present compare and validate results and conclusions.

4.2.5.2. Determine the capacities and a) capacities, resource resource situations of the urban situations, training and administrations as well as their training technical assistance needs and technical assistance needs. identified.

b) documents prepared on the various issues under (a) above.

4.2.5.3. Identify opportunities for a) conduct analyses of enhanced employment and income and employment, capacity and scope for application of employment- resource data and reach

21 intensive strategies. conclusions on opportunities.

b) prepare reports on the above and discuss as appropriate.

4.2.5.4. Prepare a comprehensive a) synthesize all the issues preparation report and submit to arising from the sector- relevant government departments and specific action-oriented donors. research and implementation of direct investment component of project.

b) prepare report which provides justification for use of employment-intensive strategies in urban development, identifies areas where institutional strengthening is required and spells out the strategy for implementing the programme.

5. INPUTS The UNV will allocate funds from its Special Voluntary Fund (SVF) while the ILO is expected to be favourably disposed to the mobilization of additional funding under its Urban Employment Programme (UEP). It is known that a number of donors are willing to invest resources into the ILO’s UEP and some of this can be made available to the project under the proposed initiative. SVF funding is targeted for the fielding of project professional personnel, equipment and material while ILO funding is targeted for training and equipment. The infrastructure works, including payment for labour and construction materials, are to be paid for from the allocation from the Lesotho Highlands Revenue Fund.

Personnel: A total of 7 UN Volunteers will be fielded. Out of these, 4 will be international UN Specialists and 3 will be national UNVs. A total of 78 workmonths of international volunteer input is envisaged while national volunteer input is estimated at 72 workmonths. Technical supervision of the entire project will be provided by the ILO

22 which will field a number of expert missions from its Headquarters and from the ASIST offices in Harare and Nairobi. As well, the training programme will be paid for by the ILO, including the training workshops and fellowships and study tours to the ASIST offices in Harare and Nairobi and any other regional location to be identified. About 6 workmonths of international consultant input, distributed over the life of the project, is envisaged to provide guidance in the design and implementation of particular aspects of the sector-specific action research.

Equipment and Material: • Light equipment (vibratory roller) • equipment for haulage of material • hand tools • computers • 4-wheel drive vehicles

6. PROJECT MANAGEMENT & IMPLEMENTATION 6.1 Institutional Framework Overall responsibility for implementation of the proposed project will rest with the Maseru City Council. The project will be administered by the regular MCC engineering department’s administrative machinery. The City Engineer will manage the project and ensure that its overall direction is consistent with the department’s mandate and budget. From the very start, the City Engineer will provide the environment for the establishment of a unit to be responsible for the implementation of the labour-based urban upgrading scheme. It is this unit that will form the institutional base of the UNVs and national staff who will be assigned to the project.

The labour-based unit will be located within the civil engineering section and will report through the existing channels to the City Engineer. The purpose of this arrangement is to ensure the minimum amount of novelty in the channel of communication and reduce the quantity of new information that needs to be learnt and mastered.

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6.2 Project Management at Country Level The labour-based unit itself will be headed by the UNV Labour-based Engineer who will report for all administrative matters to the City Engineer. Technical management of the project will be assigned to a larger advisory body which will draw membership as described under the section on co-ordination. The proposed Urban Development Technical Steering Committee will have monitoring, advisory and general oversight responsibility for the implementation of the technical aspects of the project. The committee will examine all issues dealing with procurement of material, sub-contracting, recruitment of professional personnel and counterparts. The Maseru City Council will chair the committee.

The ILO’s POLDEV, through its EIP and UEP, will liaise with the Urban Development programme at UNV headquarters to execute the aspects of the project involving the fielding of professional personnel of the project, notably the UNVs. In this regard, the technical clearance of the UNVs will be performed by the ILO. As well, the ILO will determine the need for continued volunteer input and other project inputs directly related to the implementation of the capacity building aspects and ensuring that the procedures are consistent with international standards. UNV headquarters will continue to be responsible for management of the volunteer from the perspective of administering the UNV Conditions of Service. 7. PROJECT BENEFITS The project will produce two categories of benefits. The first category includes the direct and immediate benefits which result from the project activities and the investments into road construction, rehabilitation, and maintenance. These benefits are thought to be the direct results of the shift from equipment-based methods to labour-based methods. The most notable benefits in this category are the enlarged employment generation in the poor settlements in the urban areas where unemployment is the norm and poverty is acute. As well, increased incomes will accrue to the poor residents of these settlements as a result of their employment on the labour-intensive construction activities and this will contribute to the stimulation of the economy through its multiplier effect. The bulk of the

24 beneficiaries in this case will be women who are more numerous in the population, and are also the most severely affected by the unemployment problem in the country.

The project activities will also produce the immediate improvement in access to different parts of the city and its environs and this will reduce travel time and the hardship that local people experience in commuting between city locales.This is expected to have an immediate impact on the pace of economic activity in the city and, invariably, the country as a whole in view of the reliance of the rest of the country on Maseru.

The project will produce more longer-term benefits. The most notable of these are the improvements in the condition of the urban environment, the institutionalization of the culture of maintenance of infrastructure, and the promotion of a self-reliant development strategy for urban upgrading.

Although the country has adopted labour-based technology for rural infrastructure works, the urban areas have been untouched. This has meant that a large proportion of infrastructure investment has been unaffected by the methods and may have been allocated in ways that did not maximize the objectives of economic rationality, including employment generation for a resource-poor country like Lesotho. In this regard, the introduction of the methods to the urban areas will have a significant impact on the economy as a whole.

Some attempt to quantify the above benefits in terms of employment creation yields impressive results. As indicated in section 3.3 above, the Maseru City Council received the sum of M5,126,762 for the period 1997-1999, for its road projects under the Lesotho Highlands Development Revenue Fund scheme. These activities are intended for employment creation through the upgrading of urban infrastructure. Separately, the Council gave indication that its annual budget under this labour-intensive road upgrading scheme is actually M4 million.

25 If it is assumed that the approval of the proposed project would encourage the Fund to allocate more money to the Council to spend on this scheme, it is reasonable to expect that about M1,760,000 of this will go into wage payments. Data generated by the Labour Construction Unit suggests that 44% of the total construction costs in labour-based construction is accounted for by labour component. At the minimum wage rate (1995) of M17/day, this sum can generate about 103,500 workdays of employment. In terms of equivalent full-time jobs, this figure translates to some 500 jobs on the assumption that there are approximately 200 working days per year.

The estimated employment results can be influenced by two things: the level of wage rates and the number of days worked per year. The labour wage rates in Lesotho have historically not reflected the extent of labour surplus and capital scarcity in the economy. In 1995, an ILO study established that the dollar equivalent of the daily wage rate was US$4.9. This is a strange situation for an economy where alternative job opportunities are scarce, official salaries in the civil service and private sector are very low, and the extent of unemployment is very high. Unless the procedure for wage fixing has been flawed, this may reflect a cultural lack of desperation for paid employment even in the face of abject poverty. One indication of the inappropriateness of the current approach on some labour-intensive road schemes to apply the minimum wage in setting labour wages is the fact some of these schemes resort to labour rotation in order to achieve some coverage of the available labour force. By this arrangement, the schemes employ a group of workers for one month, lay them off at the end of the month and then engage a fresh set of workers. The idea that this is “a reasonable distribution of the wage benefits” is clearly debatable. Where the objective is employment creation, a more effective targeting strategy can be evolved with the aim being to provide more jobs to more of the people that need them most for as long as is reasonable to satisfy the rational need for employment and income.

The proposed project will examine this situation as a major exploratory aspect of the project implementation in order to ensure that cost effectiveness is maximized while pursuing the central objective of employment creation. In this respect, the project will

26 introduce mechanisms to achieve a wider coverage of the very poor households in the poor urban settlements. Depending on the findings of the exploratory surveys, these mechanisms may comprise a manipulation of wage rates, working hours, strenuousness of tasks, etc, all designed to ensure that only those who need the jobs on the construction sites actually do get them.

From international experience, a level of wage rate consistent with Lesotho’s current socio-economic profile will be much lower than M17 per day. Although recent currency depreciation has made labour-based technology even more competitive in the economy by lowering daily wage rates to about US$2.8, domestic price trends suggest that much lower wage rates can be tolerated. This much lower wage rate will lead to higher employment creation on labour-based road construction. Importantly, the employment benefits in this scenario will accrue to the “ultra poor” who would otherwise be unable to find jobs within a reasonable length of time.

But even if the wage rates do not fall and employment creation remains at the levels estimated, the results are still impressive. On the basis of the 1979 Land Act (section 19(2)) and Gazette no.2 of 1987, there are 14 “urban areas” in Lesotho, namely Maseru, Butha-Buthe, (Leribe), , Moyeni, Qacha’s Nek, , Thaba Tseka, Mapoteng, , Morija, Peka, and Roma. If all these “urban areas” receive the modest allocation of M4 million each to address urban infrastructure problems by the use of labour-based methods, we can expect an annual employment generation level of 500 each at the minimum, which gives a national employment creation of 7,000 each year. According to official statistics, 20% of the population of 1.9 million, that is approximately 380,000 persons, reside in the urban areas, out of whom about 28%, or 106,000 persons, are classified “poor”. The employment benefits of this project will, therefore, affect at least 6% of the very poor, and most probably more if appropriate targeting is implemented.

8. RISKS

27 The normal risks associated with the promotion of labour-based technology include the possibility of exchange rate appreciation, unavailability of labour, changes in the structure of employment in the economy, and the lack of indigenous technical and administrative manpower to be trained and put in a position to sustain the programme at the end of the technical assistance. The appreciation of the domestic currency will cheapen imports including heavy equipment and may have a positive effect on the cost of construction using equipment-based methods.

However, the possibility that such a significant appreciation of the domestic currency can take place and make externally-sourced resources more competitive than local resources is very remote. The exchange rate has been deteriorating at least over the past 20 years. In the last six months, the depreciation in the value of the currency has been accelerating at an even faster pace, leading to strong speculations about a possible recession in the South African economy to which the Lesotho economy is linked.

The risk of acute labour shortage is equally remote. Lesotho currently suffers from a high rate of unemployment. In addition, it is estimated that the rate of underemployment may be very high. In the past, the unemployment and underemployment have been relieved through labour migration to South Africa where the majority are absorbed in the mines. But in recent times, employment in the mines has fallen off considerably while the general contraction of the South African labour market has meant that the Basotho must look elsewhere for jobs.

For these reasons, and in the light of the continuing stagnation of the domestic economy, the prospect of labour shortage in Lesotho is far-fetched. It is not also foreseen that the structure of employment in the country will change in any significant way over the next several years. Even the Lesotho Highlands Development Project which is easily the biggest civil engineering project on the continent has not changed the domestic employment profile in view of its degree of sophistication which has largely excluded the indigenous manpower.

28 The only real risk the proposed project is likely to face is that of lack of indigenous technical and administrative manpower to whom the know-how can be transferred and on whom can be entrusted the task of ensuring the sustainability of the institutions built under this assistance. Technical assistance projects in Lesotho have traditionally faced the problem of an inadequate supply of indigenous manpower from which to draw to provide counterpart personnel to the external team. The design of the present project is taking this into account and it is hoped that the high proportion of national UNVs proposed will go some way to minimize the difficulty posed by this situation.

The activities of the national volunteers will have some demonstration effect which will hopefully encourage other local professionals to devote a good part of their professional practice to contributing to national development. The national volunteers may also be willing at the end of their UNV assignment to remain in the service of the MCC and procedures can be introduced to facilitate such a transition.

9. MONITORING & REPORTING 9.1 Monitoring The project will be monitored over its lifespan by means of a number of mechanisms including the oversight activities of the Urban Development Technical Steering Committee; Tripartite Reviews embracing the government, the UNV/ILO, and the project; and regular monitoring visits of the UNV Programme Officer. In addition, the design will provide for periodic monitoring visits by staff of ILO headquarters in Geneva and ASIST in Harare and Nairobi. An Employment-Intensive Works Specialist from the ILO SAMAT in Harare as well as the staff of the ILO Area Office in will also look in on the project from time to time.

29 The Urban Development Technical Steering Committee will meet once a month to review the progress of the project implementation, examine proposals for future activities, and provide guidelines for the work of the project as necessary. These monthly meetings will equally review the minutes and deliberations of the weekly management meetings held at the project level under the chairmanship of the City Engineer and at which the UNV Project Engineer presents details of project activities and problems over the past week.

Tripartite Reviews will be scheduled at major turning points in the project cycle. It will be possible to determine these points once the project has gone into full implementation. However, it can be tentatively scheduled to hold the first TPR 12 months after the start of the project.

9.2. Reporting In view of the capacity building element of the project, but also because of the need to provide for effective monitoring of the progress, reporting will be a central requirement under the technical assistance. The following major reports will be required to be prepared under the project:

Table 9.1: Reporting Schedule and Responsibility Type of Report Responsibility Timing Inception Project Management 1998 Labour Availability Survey Project Management 1998/1999 Wage Survey Project Management 1998/1999 Training Needs Assessment Project Management 1998 Project Document UNV/ILO/GoL 1998 Project Performance Evaluation Project/GoL 1999/2000 Progress Project Management 1998/1999/2000 Tripartite Review GoL/UNV/ILO/Project 1999/2000 Mid-term Evaluation GoL/UNV/ILO/Project 1999 Budget Revisions Project Management 1998/1999/2000 Analyses of Investment Plans and Project Management 1999

30 Policies of Urban Administrations Opportunities for enhanced Project Management 1999 employment impact of infrastructure investments and scope for employment- intensive strategies Main Preparation Report for Expanded Project Management 1999/2000 Development Assistance. Final Evaluation GoL/UNV/ILO/Project 2000

10. EVALUATION The project will be subject to evaluations in accordance with the policies and procedures of the concerned parties. A mid-term evaluation will be conducted at the end of 12 months to assess the interim impact of the project. A final evaluation will be conducted within one year of the completion of the project.

31 11. BUDGET

Project No.: Project Title (including budget & fund code): B.L. BUDGET ITEM w/m TOTAL w/m 1998 w/m 1999 w/m 2000 10.00 Project Personnel 11.00 Experts ILO 11.51 Consultants 6.0 30,000 1.0 5,000 3.0 15,000 2.0 10,000 11.99 Subtotal 6.0 30,000 1.0 5,000 3.0 15,000 2.0 10,000

13.00 Admin. Support Personnel UNV 13.01 Secretary 24.0 11,000 2.0 1,000 12.0 5,500 10.0 4,500 13.02 Driver 24.0 15,000 2.0 1,250 12.0 7,500 10.0 6,250 13.99 Subtotal 48.0 26,000 4.0 2,250 24.0 13,000 20.0 10,750

14.00 UN Volunteers UNV 14.01 UNV Labour-based Engineer 24.0 57,000 2.0 5,500 12.0 32,000 10.0 19,500 14.02 UNV Development Economist 24.0 57,000 2.0 5,500 12.0 32,000 10.0 19,500 14.03 UNV Civil Works Engineer (Training) 18.0 45,000 12.0 32,000 6.0 13,000 14.04 UNV Participatory Dev. Specialist 12.0 32,000 12.0 32,000 14.05 NUNV Participatory Dev. Specialist 24.0 14,400 12.0 7,200 12.0 7,200 14.06 NUNV Information Officer 24.0 14,400 12.0 7,200 12.0 7,200 14.07 NUNV Socioeconomist 24.0 14,400 12.0 7,200 12.0 7,200 14.99 Subtotal 150 234,200 2.0 11,000 72 149,600 62 73,600

15.00 Travel Costs UNV 15.01 Duty Travel 25,000 1,500 16,000 7,500 15.99 Subtotal 25,000 1,500 16,000 7,500

16.00 Mission Costs UNV/ILO 16.01 Mission Costs 30,000 5,000 12,500 12,500 16.99 Subtotal 30,000 5,000 12,500 12,500

19.00 Component Total 345,200 24,750 206,100 114,350

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30.00 Training ILO 33.00 In-Service Training 33.01 In-Service Training 40,000 25,000 15,000 33.99 Subtotal 40,000 25,000 15,000

39 Component Total 40,000 25,000 15,000

40.00 Equipment & Supplies 45.00 Local Procurement ILO 45.01 Computers & printers 15,000 15,000 45.99 Subtotal 15,000 15,000

47.00 International Procurement ILO 47.01 Non-expendable equipment 60,000 40,000 20,000 47.99 Subtotal 60,000 40,000 20,000 49.00 Component Total 75,000 55,000 20,000

50.00 Miscellaneous ILO 51.00 Miscellaneous 51.01 Operational & Maintenance 20,000 2,000 9,000 9,000 51.99 Subtotal 20,000 2,000 9,000 9,000

52.00 Reporting Costs UNV/ILO 52.01 Reporting Costs 10,000 2,000 3,000 5,000 52.99 Subtotal 10,000 2,000 3,000 5,000

53.00 Sundry UNV/ILO 53.01 Sundries 10,000 1,000 4,000 5,000 53.99 Subtotal 10,000 1,000 4,000 5,000 59.00 Component Total 40,000 5,000 16,000 19,000

99.00 Project Total 500,200 84,750 267,100 148,350

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