AT THE DONORS CONFERENCE ON THE FINANCING OF THE LOWER USUTHU SMALLHOLDER IRRIGATION PROJECT
(LUSIP II EXTENSION)
AT THE ROYAL SWAZI CONVENTION CENTRE, EZULWINI
MONDAY 20 OCTOBER 2014
Programme Director
Honourable Ministers
Presidign Officers and Members of Parliament
Distinguished representatives of development finance institutions and the donor community
Distinguished Representatives of the United Nations community,
Distinguished representatives of local financing institutions and the private sector,
Representatives of beneficiary communities,
Representatives of the Media
Distinguished guests,
Ladies and gentlemen.
On behalf of His Majesty’s Government I wish to convey my heartiest greetings to all who are attending this landmark event, and extend a very warm welcome to those guests and cooperating partners from abroad who have made the journey to attend this conference.
I am also pleased to note the impressive presence of Swaziland-based development partners, financial institutions and other key stakeholders – a presence that I feel reflects a shared sense of the national significance and importance of the conference and to achieving a positive outcome. I am informed that this is not the first time that a number of institutions are attending this event. We do appreciate their continuing interest and support for the achievement of Swaziland’s development goals.
Economists among us will state that the factors of production in the world are land, labour and capital, with entrepreneurship as a possible addition to the trio. They will add that one of those factors of production is fixed in quantity, and that, of course is land. And, as will be appreciated, land includes not only the site of production but also the natural resources above and below the soil. That is the point at which water enters our dialogue.
Water is becoming more and more difficult to access. Not because it is running out in terms of total quantity. We have the same amount in the world today as was available to Jesus and his disciples more than two thousand years ago. What has happened to water is that it is the object of insatiable demand. Look at the world’s population. Sixty years ago it was 2.5 billion, while now it is more than 7 billion. In some countries of the world there is barely enough water to meet their existing domestic, nutritional and industrial requirements, let alone cope with population growth.
Agriculture accounts for 70 to 80 percent of water use in the whole world, though this is not evenly distributed. In some countries farming takes less than 10% of all water withdrawals. In a number of very large countries, however, farming takes between 70 and 90 per cent. Water availability is the single most important factor that limits agricultural production in many of the countries across the globe. And this applies very much to Swaziland. It takes enormous amounts of water to produce our food, let alone meet our daily domestic demands for water. The challenge becomes even greater when we take into account issues of climate change and its implications for water availability.
We have plenty of available land and with fertile soils. But our main constraint is accessing, harvesting and using the existing supply of water in the most efficient manner. The solution lies mainly in investing in projects such as the Lower Usuthu Smallholder Irrigation Project (LUSIP).
LUSIP, among other bulk water infrastructure projects, still remains one of the most viable and promising avenues through which a developing economy such as ours can make substantial strides towards meeting our water resource requirements, creating a substantial increase in agricultural output and hitting our economic growth targets and reducing the level of poverty among our people.
Let us, at this point, take a closer look at LUSIP – what it is, what it has achieved and what an extension of that Project will do for our country.
The main objectives of LUSIP are to reduce poverty by maintaining macroeconomic stability and good governance, reducing vulnerability, especially created by the HIV and AIDS pandemic, strengthening human capital development and ensuring a broad-based participation for empowerment and employment creation. In common parlance let us say that LUSIP ticks some very relevant and important boxes.
Phase I of LUSIP targeted the development of a net area of 6,500 hectares in order to benefit about 2,600 beneficiary households, which impacted on approximately 20,000 individuals. It is an excellent example of a project that has transformed people’s lives in a truly positive way.
The LUSIP beneficiary communities can tell the story better than I. Indeed, some are present here today. But it is likely that the most comprehensive confirmation of the success of LUSIP will be obtained from your tour of the Project tomorrow.
As you will be aware, this Conference is primarily about the proposed enlargement of the Project in the form of LUSIP II Extension. This Extension is designed to develop a further 11,500 hectares. Of that area, 7,300 hectares is set aside entirely for smallholder farmers which in turn will directly benefit around 3,000 households – that is, approximately 20,000 men, women and children, most of whom are at present facing the serious challenges of poverty. We are certain that LUSIP II Extension will not only boost sugarcane production substantially but will also increase prospects for diversification into other subsistence and commercial crops.
At the same time we welcome the proposed establishment of the fourth sugar mill at Nsoko, since the significant reduction in the cost of cane haulage to the mill will improve the viability of the LUSIP II Extension from 8% to around 13%.
In common with many developing countries throughout the world, agriculture is the backbone of the Swazi economy. Swaziland needs to grow its vibrant agricultural sector and in doing so will certainly contribute significantly to the country’s economic growth, food security, social welfare, job creation and ecotourism.
Our agricultural sector is responsible for 10% of GDP and 50% of our exports. Most significantly, the sector addresses directly the issues of food security and poverty alleviation. His Majesty’s Government is totally committed to the further development of the agricultural sector. It is only the funds to implement our plans that remain the challenge.
As with many countries whose economies have been adversely affected by the global financial crisis and resultant economic downturn experienced in recent years, Swaziland is constrained for available funds of the magnitude required by LUSIP II Extension. To meet our development targets and reduce our 63% poverty level we have set ourselves the target of faster economic growth. That is the essence of our Programme of Action 2013-18 but will not produce the hard cash that will finance this Project at the present time when it is really needed.
The need for financial assistance is crucially evident. The importance of our external financiers and the donor community in helping the country in being able to implement LUSIP II cannot be over-emphasised. And I hasten to add that, despite the recent fiscal challenges, our Government continues to meet its financial obligations in terms of loan repayments.
Without the assistance from our cooperating partners, the LUSIP Dam and associated infrastructure could never have been completed. In particular, we recognize and greatly appreciate the role played by the African Development Bank, the Arab Bank for Economic Development, the International Cooperation and Development Fund, the European Investment Bank, the Development Bank of Southern Africa, the European Development Fund and the International Fund for Agricultural Development.
That funding was not only very gratefully received by us but it was also very well spent, producing a project in the form of LUSIP I that would take many thousands out of poverty. This was not by handing out cash but by empowering poor communities households to develop the land under the leadership of their chiefs, and secure sustainable livelihoods that will extend well into the long term. I am sure that your tour tomorrow will leave you with a clear impression of an excellent outcome from the funds invested.
I take this opportunity to recognise and appreciate the contribution of the European Union towards the sugar reforms in the country, especially the National Adaptation Strategy. We also welcome new partners who have taken a keen interest in supporting this, and other development projects in the country. In particular I mention the OPEC Fund for International Development, and the Kuwait Fund for Arab Development, to name just two.
Furthermore, the role of the United Nations family and other stakeholders in supporting initiatives aimed at improving access to water, education, health facilities and agricultural development throughout the Kingdom has been much appreciated.
As I conclude, this is the point at which I ask our development partners to kindly commit to supporting the LUSIP II Extension project and all its components. On behalf of His Majesty’s Government I give the unreserved assurance for the full support - financial and otherwise - to LUSIP and its fundamental aim of bringing water to the poorest of the poor in our society and contributing positively towards economic growth and sustainable development.
So that the above assurance has attached to it a clear ownership and commitment by our Government I can hereby announce our promise to ensure that Government will provide at least US$ 60 million - the equivalent of half a billion Emalangeni - towards the overall financing of the LUSIP II. Furthermore, we shall ensure that the commensurate support and strengthening will be provided to Swaziland Water and Agricultural Development Enterprise (SWADE), the implementing agency of LUSIP II, to enable it to deliver on its mandate.
I do hope that, in the course of the next three days, you will find the evidence of achievement that you, the development partners clearly need. You will want to be convinced that, in the mirror image of LUSIP I, the financial support for LUSIP II Extension will achieve the targeted impact on the lives and well-being of all the many thousands of beneficiaries, and will be money very productively disbursed.
On behalf of His Majesty’s Government I thank you all most sincerely for your presence and, I so fervently hope, your financial support to LUSIP II Extension.
Thank you.