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The Economy of Lesotho

Basotho Economy

Lesotho's map

Economy - overview: Small, landlocked, and mountainous, Lesotho relies on remittances from miners employed in South Africa and customs duties from the Southern Africa Customs Union for the majority of government revenue. However, the government has recently strengthened its tax system to reduce dependency on customs duties. Completion of a major hydropower facility in January 1998 permitted the sale of water to South Africa and generated royalties for Lesotho. Lesotho produces about 90% of its own electrical power needs. As the number of mineworkers has declined steadily over the past several years, a small manufacturing base has developed based on farm products that support the milling, canning, leather, and jute industries, as well as a rapidly expanding apparel-assembly sector. The latter has grown significantly mainly due to Lesotho qualifying for the trade benefits contained in the Africa Growth and Opportunity Act. The economy is still primarily based on subsistence agriculture, especially livestock, although drought has decreased agricultural activity. The extreme inequality in the distribution of income remains a major drawback. Lesotho has signed an Interim Poverty Reduction and Growth Facility with the IMF. In July 2007, Lesotho signed a Millennium Challenge Account Compact with the US worth $362.5 million.

GDP:

GDP - real growth rate: 6.8% (2008 est.) 4.8% (2007 est.) 6.2% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 15.1% industry: 46.7% services: 38.2% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 0.9% highest 10%: 43.4% (2002 est.)

Distribution of family income - Gini index: 63.2 (1995)

Inflation rate (consumer prices):

Labor force: 838,000 (2000 est.)

Labor force - by occupation: agriculture: 86% of resident population engaged in subsistence agriculture; roughly 35% of the active male wage earners work in South Africa industry and services: 14% (2002 est.)

Unemployment rate: 45% (2002)

Budget: revenues: $523 million expenditures: $479.5 million (2008 est.)

Industries: food, beverages, textiles, apparel assembly, handicrafts, construction, tourism

Industrial production growth rate: 12% (2008 est.)

Electricity - production: 200 million kWh note: electricity supplied by South Africa (2006 est.)

Electricity - production by source:

Electricity - consumption: 226 million kWh (2006 est.)

Electricity - exports: 0 kWh (2007 est.)

Electricity - imports: 50 million kWh; note - electricity supplied by South Africa (2007 est.)

Oil - production: 0 bbl/day (2007 est.)

Oil - consumption: 1,400 bbl/day (2006 est.)

Oil - exports: 0 bbl/day (2005)

Oil - imports: 1,500 bbl/day (2005)

Oil - proved reserves: 0 bbl (1 January 2006 est.)

Natural gas - production: 0 cu m (2007 est.)

Natural gas - consumption: 0 cu m (2007 est.)

Natural gas - exports: 0 cu m (2007 est.)

Natural gas - imports: 0 cu m (2007 est.)

Natural gas - proved reserves: 0 cu m (1 January 2006 est.)

Agriculture - products: corn, wheat, pulses, sorghum, barley; livestock

Exports: $1.06 billion f.o.b. (2008 est.)

Exports - commodities: manufactures 75% (clothing, footwear, road vehicles), wool and mohair, food and live animals (2000)

Exports - partners: US 71.5%, Belgium 25.6%, Canada 1.2% (2007)

Imports: $1.339 billion f.o.b. (2008 est.)

Imports - commodities: food; building materials, vehicles, machinery, medicines, petroleum products

Imports - partners: China 30%, Hong Kong 29.6%, India 10%, South Korea 6.6%, Germany 6.4%, Pakistan 4.6% (2007)

Debt - external: $628 million (31 December 2008 est.)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: maloti (LSL) per US dollar - 7.75 (2008 est.), 7.25 (2007), 6.85 (2006), 6.3593 (2005), 6.4597 (2004)

Fiscal year: