The socio-economic impact of mining on the livelihoods of Liqhobong village mining communities

Abstract

Lesotho is a mountainous country found in southern Africa and surrounded by South Africa. The economy of Lesotho relies heavily on the textile sector, remittances from its citizens who live and work in South Africa, agriculture, and income from the Southern African Customs Union to survive (Central Bank of Lesotho 2021:3). According to the Lesotho Central Bank (2021:12), the nation also exports water, clothes, wool and mohair, as well as diamonds. The majority of this population’s economic activities include subsistence farming and animal herding as nearly three-quarters of the country’s people reside in rural areas (Lesotho Bureau of Statistics 2018a:59). Agriculture has been the main driver of economic growth in Lesotho for many years. However, the contribution of agriculture to the economy has decreased as a result of periodic droughts and land degradation brought on by subpar farming methods (Makhetha 2017:22). Furthermore, Makhetha (2017) notes that the drop was exacerbated by labour migration to South African mines, which increased the ability of more families to support themselves and reduced their reliance on agriculture. The discovery of diamonds in the country resulted in a change in commercial interest. The United National Development Programme (UNDP) (2014:2) claims that the Government of the Kingdom of Lesotho recognises the expanding economic significance of the mining industry, which is affected by diamond mining. In the upcoming fiscal years, the industry is predicted to contribute a rising trend of 5% to the Gross Domestic Product (GDP). According to the UNDP (2014), the government has identified diamond mining and important water projects as the key “accelerators of growth” for the 2012/2013-2016/2017 implementation period of the National Strategic Development Plan. The Lesotho Chamber of Mines (2018:20) emphasised the importance of the diamond mining business in Lesotho by stating that the sector produces an estimated 3 000 direct jobs and roughly 5 000 indirect jobs, which is consistent with the UNDP Report from 2014. The Chamber of Mines (2018) claims that despite its modest employment contribution owing to the high degree of mechanisation of the industry, mining has a major economic impact on the nation. In addition to the findings of the UNDP and the Chamber of Mines, the Lesotho Bureau of Statistics reported that the mining sector contributed 6,5% to the GDP during the 2018/2019 fiscal year, ranking it as the fifth largest contributor (Lesotho Bureau of Statistics 2019:88). In particular, developing nations such as Lesotho have turned into investment destinations for diamond mining owing to the anticipated development in demand for mineral resources as nations adopted a favourable policy toward the mining sector. Foreign direct investment was attracted owing to an improvement of the policy environment. The socio-economic and ecological conditions have changed as a result of the increase in foreign direct investment mainly in rural areas. The extractive sector produces unfavourable externalities that result in permanent changes to the local natural conditions, harming the local economy and jeopardising the viability of local livelihood systems (Maliganya & Paul 2013:1).