Before entering into major infrastructure or healthcare Public Private Partnerships (PPPs) in Lesotho, investors should take note of the lessons from the early termination of the Lesotho National Referral Hospital (Queen Mamohato Memorial Hospital) PPP. In March 2021, the Government of Lesotho cancelled its 18-year Design Build Finance Operate agreement with the Tsepong Consortium, once hailed as a pioneering healthcare PPP in Sub-Saharan Africa, five years before its expiry. The decision was not taken lightly and stemmed from a combination of operational, financial, and political challenges that ultimately made the project unsustainable.
The termination was triggered by a series of serious issues, including the dismissal of over 200 nurses during an illegal strike, high project costs far exceeding initial projections with the hospital consuming nearly half of the national health budget, and political interference that fuelled shareholder disputes and eroded trust. Additional complications arose from ambiguous contractual terms, unclear provisions on shareholding and dividends, lack of government capacity to monitor the project, and the absence of a PPP regulatory framework at the time the contract was signed.
For potential investors, this case underscores the necessity of thorough due diligence and early legal consultation. Partnering in a PPP or similar high-value transaction without fully understanding the contractual obligations, regulatory environment, and political context in Lesotho can expose you to significant financial losses, protracted disputes, and reputational harm. A commercial attorney in Lesotho can help you assess contractual risks, review compliance requirements, evaluate partner reliability, and ensure that protective provisions such as clear dispute resolution mechanisms and financial safeguards are in place before you commit.
The consequences of proceeding without proper legal guidance can be dire. Once disputes arise in a cross-border or politically sensitive project, resolution can be slow, expensive, and damaging to investor interests. Consulting a qualified commercial lawyer at the outset is not simply a precaution; it is an essential investment in protecting your capital, reputation, and ability to achieve long-term returns in Lesotho’s PPP and infrastructure sectors.