Was It Worth It For Lesotho To Sell Its Water To South Africa?

What happens when a country decides to sell its water then hits a drought? Our Planet Money team takes us to a country in Africa that might have given away its most valuable resource.

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Some nations are rich in water. Some aren't. And that is a business opportunity. Like any other resource, countries can make money exporting their water to their thirsty neighbors. But what happens when a country sells its own water and then goes dry? NPR's Robert Smith traveled with the International Reporting Project to find out.

ROBERT SMITH, BYLINE: I met Lemphileng Ferese in a tiny village on a mountaintop in Lesotho, Africa. He was standing next to a bull and wearing a hat with a logo of the Chicago Bulls.

LEMPHILENG FERESE: (Foreign language spoken).

SMITH: Which he thought was a great joke.

FERESE: (Laughter).

UNIDENTIFIED MAN: He says he knows Michael Jordan.

SMITH: This bull should be out on the hillside grazing right now. But there is no grass anywhere. Lesotho is going through a drought. And when I ask Ferese - how bad is it? - he answers in distance. In order to graze, they have to go really far.

FERESE: (Foreign language spoken).

SMITH: Sixty miles over the mountains.

FERESE: (Foreign language spoken).

SMITH: It has gotten so bad that Ferese and some of the other villagers did something that they hate to do. They drove out of the mountains to go buy animal feed. And since all of Lesotho is going through this drought, they traveled to the country next door to buy it, South Africa - South Africa, which is able to grow its crops just over the border in part because they buy their water from Lesotho. I ask Ferese if he knew that he was essentially buying back Lesotho's water in the form of animal feed.

FERESE: (Foreign language spoken).

SMITH: Oh, he is well aware of the irony.

FERESE: (Foreign language spoken).

(LAUGHTER)

SMITH: Why are you laughing?

(LAUGHTER)

UNIDENTIFIED MAN: We are laughing because we were expecting the answer that he's giving. It's very upsetting.

SMITH: I mean, they can see Lesotho's water. It's in dams not too far from here. But that water is earmarked for South Africa. In fact, South Africa built the dams and the big straw that basically sucks water over to its largest city of Johannesburg. Now, the deal made sense when they came up with 50 years ago. Lesotho figured their rivers were full - why not sell some of it? And the South Africans thought...

LESLEY WENTWORTH: Why not capture the water source and make the river run in a different direction?

SMITH: Lesley Wentworth is an economist who lives in Johannesburg, a city which had a huge water problem. It was growing quickly - new residents, new industry, agriculture. And there's nothing wrong with countries buying and selling natural resources. It happens all the time. But...

WENTWORTH: The water, which is the key asset that Lesotho holds, is fast diminishing.

SMITH: And they've locked themselves into a long-term contract here. And climate is changing out from under them.

WENTWORTH: Exactly.

SMITH: Most exports can respond to supply and demand. The price can go up when the resource is scarce. But water projects, dams and transfer tunnels, they require decades of planning and building. And that's why they make these long-term deals. And Lesotho does benefit from the water exports. The government gets around $15 million a year in royalties for the water. And the dams generate electricity for the towns. But out in the countryside, it just doesn't seem worth it. I met an apple farmer Blessing Nkhase who walks me through his orchard.

BLESSING NKHASE: Golden Delicious, Granny Smith, real Gala...

SMITH: Oh, yeah.

NKHASE: ...The Galas. Yeah...

SMITH: These are the same we have in the United States.

NKHASE: Yeah.

SMITH: And he says he'd plant even more varieties if he had the water. He's just had his second well go dry. And now, only the rain can help him. Whatever money his country gets from selling its water, Nkhase says, it's not enough.

NKHASE: In short, till taught by pain...

SMITH: Till taught by pain...

NKHASE: ...Men know not what water is worth.

SMITH: ...Men know not what water is worth.

A quote from the British poet Lord Byron but just as true here in Lesotho. Robert Smith, NPR News.

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