No. 52: Migration, Remittances and ‘Development’ in Lesotho

Lesotho is one of the most migration dependent countries in the world. Migrant remittances are the country’s major source of foreign exchange, accounting for 25% of GDP in 2006. Lesotho is also one of the poorest countries in the world due to high domestic unemployment, declining agricultural production, falling life expectancy, rising child mortality and half the population living below the poverty line. The majority of households and rural communities are dependent on remittances for their livelihood. Households without access to migrant remittances are significantly worse off than those that do have such access. Since 1990, patterns of migration from Lesotho to South Africa have changed dramatically. These changes include significant increases in legal and irregular cross-border movement between Lesotho and South Africa; declining employment opportunities for Basotho men in the South African gold mines; increased female migration from Lesotho; growing internal female migration of young women within Lesotho; a ‘brain drain’ from Lesotho to South Africa and the growth of AIDS-related migration in Lesotho. The central question addressed in this report is how these changes have impacted remittance flows and usage. For most of the twentieth century, the vast majority of migrants from Lesotho were single young men who went to work on the South African gold mines and remitted funds to their parents’ households. Migration has become much more mixed in recent years and the profile of migrants leaving Lesotho has changed significantly: The number of Basotho male migrants working on the mines declined from 100,000 in 1990 to 46,000 in 2006. However, the majority of male migrants from Lesotho are still mineworkers. The demographic profile of male migrants has shifted markedly. Migrants used to be single young men. Now 84% are married and 77% are heads of households. Nearly 50% of migrants are over the age of 40 and only 5% are under 25. Half of the growing number of female migrants from Lesotho are domestic workers in South Africa. The rest are spread between the informal sector (9%), commercial farmwork (5%), self-employed businesses (6%), the professions (5%) and skilled manual work (5%). In other words, although one sector dominates, female migrants work in a wider variety of jobs than males. On the whole, female migrants are younger than males but significant numbers of older women are also migrants. In contrast to male migrants, only 27% of female migrants are married. On the other hand, 42% are divorced, separated, abandoned or widowed. Most older women migrants fall into this category. A sizable group of women thus has the responsibility of being the head of their own household but have to migrate to South Africa in order to ensure the survival of the household. Over 40,000 young, mostly single, women are internal migrants working in Lesotho’s textile factories. The textile workers have been called the ‘new miners’ though wages in the factories are paltry compared with the mines. If the textile industry did not exist, or closed down, then most of these women would probably migrate to South Africa. Most migrants who work outside mining are irregular migrants as the South African government is reluctant to give them work permits. This increases their vulnerability to exploitation. Many women are in South Africa on 30-day visitor’s passes and are supposed to return to Lesotho every 30 days to renew them. If they do not, they have to pay a “fine” when they eventually return home. Changes in the profile of migration from Lesotho have impacted on remittance flows in a number of ways: The decline in mine employment has not led to a decrease in remittance flows to Lesotho. On the contrary, total remittance flows increased as a result of increases in mine wages. But rising remittance flows are directed to a shrinking number of households thus increasing inequality between households and accelerating levels of poverty and food insecurity for households that do not have a mineworker. Female domestic workers in South Africa remit less to Lesotho than male miners. This is primarily because they earn about a third as much as their male counterparts. Domestic workers are notoriously exploited in South Africa. Some migrants have second families or partners in South Africa. In the case of male migrants, this tends to reduce the amount remitted to Lesotho. In the case of female migrants, it often increases the flow of remittances as they are able to remit some of their partner’s earnings back home as well. The vast majority of cash remittances flow through informal channels (usually carried by hand). Only 5% of migrants use the Post Office and 2% the banks to remit. Remittance-receiving households in Lesotho tend to use most of the remittances for basic needs: Migrant remittances form an important, and in many cases, the only, source of income for migrant-sending households in Lesotho. Over 95% of the households with male migrant members and 90% with female migrant members list remittances as a source of household income. Fewer than 10% list income from the second-ranking income source, non-migrant wage labour. Most households (89%) say that the contribution of remittances to household income is important or very important. Remittances are also key to having enough food in the household (with nearly 90% saying that it is important or very important). The most common use of remittances is for food (90% of households spend remittances on food), clothing (76%), school fees (56%) and fares for transportation (34%). Almost three quarters of households do not invest remittances in agriculture. Of those that do, a quarter spend remittances on seed, 18% on fertilizer, 12% on tractors and 4% on livestock. Nearly 19% of households put some remittance income into savings. Other expenditures such as funerals (incurred by 16% of households) and funeral and burial insurance policies (29%) reflect the impact of HIV and AIDS. Households with female migrants are more likely to supplement remittance earnings with other sources of income. Remittances are not used on luxury consumer items but are used, directly or indirectly, to meet the household’s subsistence needs. The proportion of households investing remittances in formal or informal business is extremely low. In the rural villages, remittances are often “pooled” by women through burial societies, grocery associations and egg circles. As well as loaning money to be paid back with interest, the associations buy food and groceries in bulk to divide up among members. Remittances are essential to household survival in Lesotho but the opportunities for investing remittances in productive, developmental activities are very limited. This suggests that it is important to stop seeing Lesotho as the only site for entrepreneurship by migrants from there. Companies from all over the world are permitted to come and do business in South Africa. The same opportunity should be afforded to Basotho households. Basotho should also be freely allowed to do business in South Africa. Instead, migrants are more often viewed as a threat and undesirable. Migration needs to be re-thought as something that is mutually beneficial for both countries. The only realistic option is to open the borders for unrestricted travel in both directions and to allow Basotho to pursue economic opportunities in South Africa free of harassment and deportation