PROJECT/PROGRAMME PROPOSAL TO THE ADAPTATION FUND PART I: PROJECT/PROGRAMME INFORMATION Project/Programme Category: Project Country/ies: Lesotho Title of Project/Programme: Improving adaptive capacity of vulnerable and food-insecure populations in Lesotho Type of Implementing Entity: Multilateral Implementing Entity Implementing Entity: World Food Programme Executing Entity/ies: Ministry of Energy and Meteorology; Ministry of Forestry, Range and Soil Conservation Amount of Financing Requested: USD 9,999,891 (4 years) 1 Project Background and Context Location The Kingdom of Lesotho is located in the south-eastern part of Southern Africa, surrounded by the Republic of South Africa. With a total land surface area of 30,355km², the country is landlocked and mountainous, with rugged terrain and elevations ranging from 1,388m to 3,482m above sea level. Four distinct geographical zones are characterized by significant climatic and agro-ecological differences: the lowlands (17 percent), foothills (15 percent), mountains (59 percent), and the Senqu River valley (9 percent). The rugged mountainous areas are suitable for livestock grazing and water resources development, with more favourable agricultural conditions in parts of the lowlands, foothills and Senqu River Valley. Only 9 percent of Lesotho’s land is arable1. Figure 1: Location map of Lesotho showing administrative divisions and agro-ecological zones2 Environmental and agro-ecological conditions Climate The climate of Lesotho is characterized by four distinct seasons with significant fluctuations in temperature and rainfall. The country normally receives 85 percent of its average annual rainfall (700mm) between the months of October and April. Rainfall is often marked by heavy torrents that can result in severe soil erosion, while snowfall is common in the mountains. Temperatures are highly variable, on diurnal, monthly and annual time scales, but generally lower than those of similar latitude inland regions, due to the altitude. Normal monthly winter minimum temperatures range from -6.3°C in the lowlands to 5.1°C in the highlands, while monthly mean winter minimum temperatures can reach -10.7°C, and daily winter minimum temperatures can drop as low as -21°C, with sub-zero daily minimum temperatures possible even in summer both in the lowlands and the highlands3. In recent decades, the previous climate variability of wide-ranging temperatures, erratic rainfall, heavy rains and mid-season dry spells has become more exaggerated. Land degradation and biodiversity Land degradation is one of the main environmental challenges constraining agricultural productivity and food and nutrition security in Lesotho. Soil erosion and desertification have been aggravated by recurrent droughts, rapid population growth and increasing pressure on natural resources, as well as 1Lesotho Vulnerability Assessment Committee, 2016: Market Assessment Report. 2 https://visitlesotho.travel/travel-guide/about-lesotho/59-mokhotlong-district. 3 Lesotho Meteorological Services, 2018. Ministry of Energy and Meteorology. 2 unsustainable land and natural resource management practices. Loss of ground cover on the highland rangelands due to overstocking has resulted in excessive water runoff during mountain storms, leading to flash flooding and sheet and gully erosion, which is leading to loss of limited agricultural land. It is estimated that 4.5 million tons of soil is lost through soil erosion per year4, thus reducing the productive capacity of the country’s croplands and rangelands, and impacting on biodiversity by changing and reducing habitat for wild species. Other threats to biodiversity include overgrazing, unsustainable harvesting (particularly of medicinal plants), uncontrolled fires, urban and agricultural encroachment, invasive alien species and pollution.5 Socio-Economic Characteristics Population, economy and poverty The population of Lesotho is estimated at 2 million, with over 70 percent of people residing in rural areas. Women make up 51.1 percent of the population, with youth (those between 15 to 35 years) comprising nearly 39.6 percent (50.7 percent male and female 49.3 percent) of the total population. According to 2011 statistics6, 33 percent of Lesotho’s population is below the age of 15, 11 percent between the ages of 15-19 and 10 percent between the ages 20-24, while 67.1 percent of the population up to the age of 24 was still attending school. Classified as a lower middle-income country, Lesotho has a Gross Domestic Product (GDP) of US$2.2 billion, a national gross income per capita of US$1,5007, and a low human development index (HDI) of 0.497, with a rank of 160 out of 188 countries8 . When adjusted for inequality, the HDI falls to 0.320, a loss of 35.6 percent.9 The country’s economy is intricately linked to its regional and international partners. South Africa, Lesotho’s main trading partner, supplies about 80 percent of all imported goods and services and imports one quarter of Lesotho’s total exports.10 With a GDP contribution of 17 percent, agriculture is the mainstay of the rural economy, with rainfed agriculture being the major source of livelihood for the majority of the population living in the rural areas. Poverty, inequality, and unemployment remain major development challenges facing Lesotho, despite high literacy rates and high investment in social sectors over the years. Despite the lower middle-income status, the national poverty head count ratio, at purchasing power parity (PPP) US$1.25 a day, has increased since 2000 and currently stands at 57.1%.11 More than one quarter of the population is classified as extremely and/or chronically poor. Approximately 85 percent of the population lives in rural areas and 70 percent derive all or part of their livelihood from agriculture. The variable climate, limited arable area, mountainous topography, and severe land degradation constrain the agricultural sector’s ability to generate adequate levels of employment and income to support the rapidly increasing population. As a result, both absolute and 4 MFRSC 2015. National Action Programme. Report to the United Nations Convention to Combat Desertification 5 Lesotho Review, 2018 edition. Available at http://www.lesothoreview.com/contents/environmental-conservation/ 62011 Lesotho Demographic Survey 7The World Bank: http://data.worldbank.org/country/lesotho). 8 UNDP 2016 Human Development Report 9 Verité 2018. Lesotho Country Report. https://www.verite.org/wp-content/uploads/2018/01/SSA-Verite-Country-Report-Lesotho.pdf 10 Revenue from the Southern African Customs Union (SACU), royalties from the Lesotho Highlands Water Project (LHWP), benefits from regional trade protocols such as the Common Monetary Area (CMA), and individual remittances from Basotho working in South Africa contribute significantly to the national budget, with a lesser contribution from mining. 11 The World Bank Group: https://data.worldbank.org/country/lesotho 3 relative poverty have been increasing over time amongst rural and farming communities12. There has been a gradual decline in factory incomes and remittances from abroad shrank from about 60 percent of GDP in the 1980s to less than 20 percent in 201613, further entrenching poverty in many rural households. Over 50 percent of the population remains unemployed and inequality, as measured by a GINI coefficient of 0.5, is considered unacceptably high and increasing. The country’s fiscal space is shrinking due to increasing levels of public debt, affecting the ability of the Government of Lesotho (GoL) to increasingly fund priority sectors like education, health, and social development.14 The incidence of poverty is persistently higher among female-headed households at approximately 64 percent, which is well above the national average of 58 percent and a male-headed average of 57 percent. A large proportion of female-headed households are poor and extremely vulnerable to climate change because they lack agricultural assets due to discriminatory customary laws and socio- cultural practices, as well as low awareness of their legal rights. Over 60% of the agricultural labour force is constituted by women, yet only 30% of women own land. Whilst women represent a large share of total employment, they occupy only one in three jobs outside of agriculture and earn close to half of what men earn. Moreover, women are less likely to hold leadership positions and have less employment security than men15. As a result, women constitute most of the poor in Lesotho, thus they are more vulnerable to the adverse impacts of climate change. Health, nutrition and food security The country is ranked second highest in HIV and AIDS prevalence (25.6 percent) in the world, with one in every three adults estimated to be living with HIV and AIDS. Females over the age of 15 years make up 56 percent of people living with HIV, with 29 percent of women in Lesotho having contracted HIV, as compared to 18.7 percent of men. New infections are most likely to occur among women.16 The higher HIV prevalence rate among females is related to the increased prevalence of gender-based violence (GBV) and cultural practices that limit women’s and girls’ rights, including access to services, information and protection such as the use of condoms.17. The high prevalence of HIV and AIDS has inevitably led to higher morbidity and mortality rates, particularly among the most productive segments of the society. This has increased the number of orphans and child-headed households, weakened agriculture and other