GOVERNMENT OF THE KINGDOM OF LESOTHO Water and Sewerage Company (WASCO) Greater Maseru Water Supply Feasibility Study & Preliminary Design Results of Socio-Economics January, 2016

SOCIOECONOMIC PROFILE OF LESOTHO The Average household size was estimated at 4.8 persons The Household size was higher in the rural than in the urban areas The proportion of households who reported inability to pay for water was 7.1% About 73% of the population lives in the rural areas, About 62% of total population have access to portable water, In the urban areas, the water supply coverage is around 52%. Two in five people live below the poverty line, Despite the country's valuable natural resources it remains very poor.

SOCIOECONOMIC PROFILE OF LESOTHO The under age 5 mortality rate 117/1000 live births Life expectancy 42 years. The food poverty line is the value of the minimal level of food consumption needed to meet standard nutritional requirements (M137/month in 2011). Households whose incomes fall below this line (34.1%) are considered very poor. The percentage of very poor household members has increased from 34% in 2003 to 35.1% in 2011, while the percentage of poor household members increased from 56.6% in 2002 to 57.1% in 2011.

YearUrban, 2015Rural Areas, 2015 Year Total Improved Piped onto Premises Total Improved Piped onto Premises %26% 75%2% %29% 75%2% %39% 76%3% %50% 76%3% %61% 76%4% %70%77%4% Source: WHO/UNICEF JMP, 2015,

Urban Estimated Water Coverage WHO / UNICEF (Updated June 2015), Joint Monitoring Programme for Water Supply and Sanitation: Estimates on the use of water sources and sanitation facilities, Updated June 2015, Lesotho/ URBAN WATER Estimated coverage 2015 update Year Total improved Piped onto premises Other improved Other unimproved Surface water %26%67%7%0% %29%64%7%0% %39%54%7%0% %50%44%6%0% %61%33%6%0% %70%25%5%0%

Urban Estimated Water Coverage WHO / UNICEF (Updated June 2015), Joint Monitoring Programme for Water Supply and Sanitation: Estimates on the use of water sources and sanitation facilities, Updated June 2015, Lesotho/ Rural WATER Estimated coverage 2015 update Year Total improved Piped onto premises Other improved Other unimproved Surface water %2%73%23%2% %2%73%23%2% %3%73%23%1% %3%73%23%1% %4%72%23%1% %4%73%22%1%

Deficiencies in water supply and sanitation facilities result in waterborne disease outbreaks, even with a countries of high levels of coverage of drinking water and sewage treatment coverage. One in every Nine children born in Lesotho dies before reaching a fifth birthday. For the five-year period , the infant mortality rate was 91 deaths per 1,000 live births, and the under-5 mortality rate: 117 deaths per 1,000 live births

Environmental burden of diarrheal diseases, per year Estimates based on national exposure and WHO country health statistics Risk factorExposure Deaths /year DALY Vs/ 1000 cap /year Water, sanitation and hygiene (diarrhea only) Improved water: Improved sanitation 79% 37%

Costumers Affordability for Water The reasonable cost of water and sanitation should not reach more than 3% of GDP or about 1.5-2% of household expenses. The Household Budget Survey shows that 4.7 percent of households who earned between M1,000 and M1,999 were not able to pay for water while 47.1 percent were able to pay. About 62 percent of households who earn M5,000 and above were able to pay for water. Source : BOS (2014). Household budget survey (2010/2011). Analytical report. Volume I. NOVEMBER 2014

Socio-Economic Benefits of the Project The proposed Project will generate positive impact, 1.Will enhance the livelihood and well-being of the target population. 2.The economic returns are measured in terms of the benefits which accrue to beneficiaries in the form of regular and adequate drinking water supply services, time gained in obtaining water to premises, 3.A decline in water-borne diseases and a general improvement in living conditions

Necessary Action to Avoid High Socioeconomic Costs Policy interventions can certainly reduce mortality and morbidity-related health costs associated with water-related diseases Economic valuation studies demonstrate that the health benefits associated with drinking water supply and sanitation interventions can be significant. Cost-Benefit analysis studies (World Wide)have shown that the benefits associated with drinking water quality improvements are frequently greater than the corresponding investment and operating costs B/C ratio (Range from 1 to 2.3), suggesting significant cost savings in terms of healthcare expenditures