The Treaty Signed Under a Blockade
Lesotho has no coast, no oil and one neighbour. What it also has is rain falling on mountains above 3,000 metres, and since 1998 it has been selling that rain to South Africa through a tunnel driven under the Maloti — under a treaty signed nine months after Pretoria closed the country's borders and a coup removed the government that had refused to sign it.
At Katse the water goes into the mountain. The dam is 185 metres of double-curvature concrete arch wedged into a gorge on the Malibamatšo river, and standing on the crest you can see the intake tower that feeds a tunnel 45 kilometres long, bored north under the highlands to a turbine hall at 'Muela and on across the border. Nothing pumps it. The mountains are high enough that the whole system runs on gravity, from a reservoir at around 2,050 metres to an outfall on the Ash River in the Free State, and from there down the Liebenbergsvlei and the Wilge into the Vaal Dam.
That is the Lesotho Highlands Water Project. It is not the country's biggest export and it is worth being exact about that, because the sales pitch usually overstates it. Letšeng, the highest diamond mine in the world, sits at over 3,000 metres north of Mokhotlong and pulls out stones of a size almost nowhere else produces; the garment factories at Maseru and Maputsoe are the largest private employer in the country, sewing for American labels under AGOA. Both are priced somewhere else. So were the migrant mining wages that once came home from the Free State gold shafts and collapsed with the industry that paid them. Water royalties are smaller than any of those — a few per cent of government revenue, against a Southern African Customs Union pool that supplies close to half of it and is set by a formula Lesotho does not write. What makes the water different is that it is fixed by treaty rather than by a market, and that the treaty was signed by a military government in the year South Africa shut the country down.
Nine months in 1986
The engineering had been studied since the 1950s, when a scheme to divert highland water north was drawn up under the name of the Oxbow project. It went nowhere for thirty years, and the reason was political rather than technical. Chief Leabua Jonathan's government had spent the late 1970s and early 1980s aligning Lesotho with the Organisation of African Unity, accepting ANC exiles, and refusing to sign a non-aggression pact with Pretoria. It was not going to hand apartheid South Africa a water supply. On 1 January 1986 South Africa closed the border, and a landlocked country with one neighbour began running out of fuel and food within days. On 20 January the army removed Jonathan. The Treaty on the Lesotho Highlands Water Project was signed in Maseru on 24 October the same year.
What was built
Phase 1A gave Katse, the transfer tunnel, and the 72-megawatt station at 'Muela, which is Lesotho's share of the deal in kind: the water drops through three turbines on its way out, and a large part of the country's electricity comes off a river it is in the act of selling. It is not all of it — Lesotho still imports from South Africa and Mozambique when demand peaks. Deliveries began in 1998. Phase 1B added Mohale, a 145-metre rockfill dam on the Senqunyane finished in 2002 and linked to Katse by a further tunnel, and brought the treaty schedule to a little over 780 million cubic metres a year. Phase II is under construction now at Polihali, on the upper Senqu near Mokhotlong, with a 38-kilometre tunnel to feed the Katse reservoir from above; the protocol was signed in 2011 and the works are aimed at the end of this decade.
A pipeline runs both ways as an argument. Lesotho has one buyer and cannot store what it sells; South Africa has one substitute and it is desalination on a coast six hundred kilometres downhill from where the water is needed.
What the buyer needs it for
The Vaal system supplies Gauteng — Johannesburg, Pretoria, the East Rand, the province that generates roughly a third of South Africa's economic output on a highveld watershed that does not have enough rain to support it. The transfers are not a supplement. In October 2024 the transfer tunnel was taken out of service for about six months of planned maintenance, the first long shutdown since the system was built, and Rand Water spent the summer rationing supply to municipalities while Johannesburg's reservoirs ran down. The maintenance had been scheduled years in advance and announced repeatedly. It still produced a water crisis in the largest city in the country, which is a reasonably precise measure of how little slack there is.
The case Lesotho prosecuted
The project also produced one of the few instances anywhere of a small country convicting large foreign firms in its own courts. Masupha Sole, the chief executive of the Lesotho Highlands Development Authority, was found to have taken payments routed through intermediaries by contractors bidding for the works; he was convicted of bribery in 2002 and sentenced to eighteen years, reduced to fifteen on appeal. Lesotho then prosecuted the companies rather than stopping at the official. Acres International of Canada was convicted in 2002 and Lahmeyer International of Germany in 2003, both upheld on appeal, and both were subsequently debarred from World Bank-financed contracts. Donor governments had spent years telling African states that corruption was theirs to fix. When one of the smallest of them did the fixing, it was prosecuting firms headquartered in the countries doing the telling.
The bill in the valleys
The reservoirs took arable land in a country where roughly nine per cent of the surface can be ploughed. Around two thousand people were physically relocated for Katse and Mohale and many thousands more lost fields, grazing or access across the water; compensation was contracted in cash and grain over decades, and the record of delivering it has been picked over by the World Bank's own panels, by Lesotho's courts and by the affected communities for the better part of thirty years. The roads that make this itinerary possible — the tar over Mokhoabong, the A8 to Katse — were built to move cement and turbines, not travellers. They are the most visible thing the project gave the highlands, and the villages beside them still queue at standpipes.
One customer
Royalties arrive monthly and are budgeted for years ahead, which in a small economy is worth as much as their size. But the price is fixed by a formula negotiated between two governments, and the seller cannot take the product anywhere else: water does not travel except downhill, and every direction from Lesotho is South Africa. That is the position the 1986 signatures created, and it is the position Polihali extends. The question Basotho commentators keep returning to is not whether the water should be sold — it is whether a country that sits above the taps of a regional economy has ever priced that fact at what it is worth.