Economy of Lesotho

Lesotho is geographically surrounded by South Africa and economically integrated with it as well. The economy of Lesotho is based on agriculture, livestock, manufacturing, mining, and depends heavily on inflows of workers’ remittances and receipts from the Southern African Customs Union (SACU).[4][5] The majority of households subsist on farming. The formal sector employment consist of mainly the female workers in the apparel sector, the male migrant labor, primarily miners in South Africa for 3 to 9 months and employment in the Government of Lesotho (GOL) . The western lowlands form the main agricultural zone. Almost 50% of the population earn income through informal crop cultivation or animal husbandry with nearly two-thirds of the country's income coming from the agricultural sector.

High mountain Shepherds
High-mountain shepherds.

Lesotho has taken advantage of the African Growth and Opportunity Act (AGOA) to become the largest exporter of garments to the US from sub-Saharan Africa.[6] American Brands and retailers sourcing from Lesotho include: Foot Locker, Gap, Gloria Vanderbilt, JCPenny, Levi Strauss, Saks, Sears, Timberland and Wal-Mart.[7] In mid-2004 its employment reached over 50,000 mainly female workers, marking the first time that manufacturing sector workers outnumbered government employees. In 2008 it exported 487 million dollars mainly to the U.S.A. Since 2004 employment in the sector was somehow reduced to about 45,000, in mid-2011, due to intense international competition in the garment sector. It was the largest formal sector employer in Lesotho in 2011.[8] The sector initiated a major program to fight HIV/AIDS called Apparel Lesotho Alliance to Fight AIDS (ALAFA). It is an industry-wide program providing prevention and treatment for the workers.[9]

Lesotho, is a member of the Southern African Customs Union (SACU) in which tariffs have been eliminated on the trade of goods between other member countries, which also include Botswana, Namibia, South Africa, and Swaziland. Lesotho, Swaziland, Namibia, and South Africa also form a common currency and exchange control area known as the Rand Monetary Area that uses the South African rand as the common currency. In 1980, Lesotho introduced its own currency, the loti (plural: maloti). One hundred lisente equal one loti. The Loti is at par with the rand.

Economy of Lesotho
Maseru from Parliament Hill
Maseru, the economic hub of Lesotho
CurrencyLesotho Loti
1 April - 31 March
Trade organisations
WTO, SACU, SADC
Statistics
GDP$2.13 billion nominal (2010 est.)
GDP growth
5.6% (2015), 2.3% (2016),
3.1% (2017e), 1.8% (2018f) [1]
GDP per capita
$1,670 Purchasing Power Parity (PPP) (2011 est.)
3.1% (2010 est.)
Population below poverty line
58% using national poverty line (2002/03), 37 percent using World Bank $1 a day (2002/03)[2]
Labour force
855,000 (2007)
Labour force by occupation
agriculture: About 80% of the resident population are engaged in subsistence agriculture; roughly 20% of the formal wage earners (about 200,000) work (mainly males) in South Africa, 20% of the workers (mainly females) are in the apparel industry in Lesotho, and 20% are employed by the Government of Lesotho. The others are employed in services and other manufacturing (2008).
Unemployment45% including hidden unemployment (2002).
Main industries
food, beverages, textiles and apparel, handicrafts, construction, tourism, mining
104th (2018)[3]
External
Exports$1,043 million f.o.b. (2010 est.)
Export goods
Garments 53% , other including diamonds 47% (2008)
Main export partners
 US 60%
 Europe 17%
SACU 19% (2007)
Imports$1,766 million c.i.f. (2010 est.)
Import goods
food, building materials, vehicles, machinery, medicines, petroleum products, inputs to the apparel industry (2010)
Main import partners
SACU 85%
 Taiwan
 Hong Kong and  China 14% (2007)
Public finances
$647 million (33% of GDP) (31 December 2010 est.)
Revenues$1,232 million (57% of GDP) (2009/10)
Expenses$1,168 million (2009/10)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

Economic history

Until the political insecurity in September 1998, Lesotho's economy had grown steadily since 1992. The riots, however, destroyed nearly 80% of commercial infrastructure in Maseru and two other major towns in the country, having a disastrous effect on the country's economy. Nonetheless, the country has completed several IMF Structural Adjustment Programs, and inflation declined substantially over the course of the 1990s. Lesotho's trade deficit, however, is quite large, with exports representing only a small fraction of imports.

The global economic crisis hit the Lesotho economy hard through loss of textile exports and jobs in the sector due largely to the economic slowdown in the United States which is a major export destination, reduced diamond mining and exports, including weak prices for diamonds; drop in SACU revenues due to the economic slowdown in the South African economy, and reduction in worker remittances due to weakening of the South African economy and contraction of the mining sector and related job losses in South Africa. In 2009, GDP growth slowed to 0.9 percent.[4]

Economic progress

Lesotho’s progress in moving from a predominantly subsistence-oriented economy to a lower middle income, diversified economy exporting natural resources and manufacturing goods has brought higher, more secure incomes to a significant portion of the population. The percentage of the population living below USD PPP US$1.25/day fell from 48 percent to 44 percent between 1995 and 2003.[4] The country is still among the "Low Human Development" countries (rank 155 of 192) as classified by the UNDP, with 42.3 years of life expectancy at birth. However, adult literacy is very high - 82% and children under weight aged under 5 is only 20%.[10]

Lesotho has received economic aid from a variety of sources, including the United States, the World Bank, the United Kingdom, the European Union, and Germany.

Lesotho has nearly 6,000 kilometers of unpaved and modern all-weather roads. There is a short rail line (freight) linking Lesotho with South Africa that is totally owned and operated by South Africa.

Natural resources

Water and diamonds are Lesotho's only significant natural resources. Water is being extracted through the 30-year, multibillion-dollar Lesotho Highlands Water Project (LHWP), which was initiated in 1986. The LHWP is designed to capture, store, and transfer water from the Orange River system and send it to South Africa's Free State and greater Johannesburg area, which features a large concentration of South African industry, population and agriculture. At the completion of the project, Lesotho should be almost completely self-sufficient in the production of electricity and also gain income from the sale of electricity to South Africa. The World Bank, African Development Bank, European Investment Bank, and many other bilateral donors are financing the project. Diamonds are produced in Letšeng, Mothae, Liqhobong and Kao mines. The sector suffered a setback in 2008 as the result of the world recession but rebounded in 2010 and 2011. It is a major contributor to the exports of Lesotho.[11]

Other statistics

The following table shows the main economic indicators in 1980–2017.[12]

Year 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP in $
(PPP)
0.65 Bln. 1.01 Bln. 1.50 Bln. 2.10 Bln. 2.68 Bln. 3.47 Bln. 3.73 Bln. 4.02 Bln. 4.33 Bln. 4.50 Bln. 4.84 Bln. 5.27 Bln. 5.63 Bln. 5.85 Bln. 6.13 Bln. 6.35 Bln. 6.63 Bln. 6.96 Bln.
GDP per capita in $
(PPP)
512 736 935 1,131 1,440 1,841 1,994 2,144 2,301 2,385 2,560 2,780 2,963 3,068 3,208 3,296 3,425 3,581
GDP growth
(real)
−0.8 % 3.3 % 5.2 % 2.8 % 4.9 % 3.1 % 4.4 % 5.0 % 5.5 % 3.1 % 6.3 % 6.7 % 4.9 % 2.2 % 3.0 % 2.5 % 3.1 % 3.1 %
Inflation
(in Percent)
19.6 % 15.0 % 12.0 % 9.7 % 6.1 % 3.6 % 6.3 % 9.2 % 10.7 % 5.8 % 3.3 % 6.0 % 5.5 % 5.0 % 4.6 % 4.3 % 6.2 % 5.6 %
Government debt
(Percentage of GDP)
... ... 18 % 62 % 88 % 49 % 51 % 51 % 45 % 35 % 31 % 33 % 35 % 37 % 37% 41 % 35 % 35 %

Household income or consumption by percentage share:
lowest 10%: 0.9%
highest 10%: 43.4% (1986–87)

Industrial production growth rate: 3% (2010)

Electricity - consumption: 626 GWh (2010/11)

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

Currency: 1 loti (L) = 100 lisente; note - maloti (M) is the plural form of loti

Exchange rates: maloti (M) per US$1 – 7.32 (2010), 6.10948 (1999), 3.62709 (1995); note - the Basotho loti is at par with the South African rand

See also

References

  1. ^ "World Bank forecast for Lesotho, June 2018 (p. 153)" (PDF). World Bank. Retrieved 11 September 2018.
  2. ^ "LESOTHO Sharing Growth by Reducing Inequality and Vulnerability: A Poverty, Gender, and Social Assessment" (PDF). World Bank.
  3. ^ "Ease of Doing Business in Lesotho". Doingbusiness.org. Retrieved 2017-11-23.
  4. ^ a b c "World bank Lesotho: Country Brief". Archived from the original on 2014-03-31. Retrieved 2012-03-03.
  5. ^ "CIA Lesotho Economy 2011". Retrieved 2012-03-03.
  6. ^ "Central Bank of Lesotho - Africa Growth and Opportunities Act (AGOA): Economic Impact and Future Prospects" (PDF). Archived from the original (PDF) on 2012-07-15. Retrieved 2012-02-04.
  7. ^ "Purchase for Africa: An appeal for American apparel buys". Archived from the original on 2009-11-01. Retrieved 2009-10-28.
  8. ^ "World Bank - IFC - Africa Can Compete! The Miracle of Tiny Lesotho—Sub-Saharan Africa's Largest Garment Exporter". Retrieved 2012-02-04.
  9. ^ "Apparel Lesotho Alliance to Fight AIDS (ALAFA)". Archived from the original on 2011-02-25. Retrieved 2012-02-04.
  10. ^ Human Development Report 2009. The United Nations. Retrieved 07 March 2012.
  11. ^ "Central Bank of Lesotho - QUARTERLY REVIEW - June 2011" (PDF). Archived from the original (PDF) on 2012-02-09. Retrieved 2012-03-06.
  12. ^ "Report for Selected Countries and Subjects". Retrieved 2018-09-13.

External links

Central Bank of Lesotho

The Central Bank of Lesotho is the central bank of Lesotho, in southern Africa. The bank is located in Maseru and its current governor is Dr. Retselisitsoe Matlanyane. The bank was established in 1978 as the Lesotho Monetary Authority.

Lesotho

Lesotho ( (listen), Sotho pronunciation: [lɪ’sʊːtʰʊ]), officially the Kingdom of Lesotho (Sotho: 'Muso oa Lesotho), is an enclaved country within the border of South Africa. It is one of only three independent states completely surrounded by the territory of another country. Lesotho is just over 30,000 km2 (11,583 sq mi) in size and has a population of around 2 million. Its capital and largest city is Maseru.

Lesotho was previously the British Crown Colony of Basutoland, but it declared independence from the United Kingdom on 4 October 1966. It is now a fully sovereign state that is a member of the United Nations, the Commonwealth of Nations, and the Southern African Development Community (SADC). The name Lesotho roughly translates to "the land of the people who speak Sesotho".

Lesotho loti

The Loti (plural: maLoti) is the currency of the Kingdom of Lesotho. It is subdivided into 100 Lisente (sg. Sente). It is pegged to the South African rand on a 1:1 basis through the Common Monetary Area, and both are accepted as legal tender within Lesotho. The loti was first issued in 1966, albeit as a non-circulating currency. In 1980, Lesotho issued its first coins denominated in both loti and lisente (dated 1979) to replace the South African Rand, but the Rand remains legal tender.

The name derives from the Sesotho loti, "mountain," while sente is from English "cent."

Letseng diamond mine

The Letšeng diamond mine, found in the landlocked Southern African kingdom of Lesotho, is owned by Gem Diamonds, Ltd. and the government of Lesotho, and at an elevation of 3,100 m (10,000 ft) it is the world's highest diamond mine.

List of banks in Lesotho

This is a list of commercial banks in Lesotho

Standard Bank

Nedbank

First National Bank

Lesotho Post Bank

List of companies of Lesotho

Lesotho is an enclaved, landlocked country in southern Africa completely surrounded by South Africa. Previously known as Basutoland, Lesotho declared independence from the United Kingdom on 4 October 1966. It is a member of the United Nations, the Commonwealth of Nations and the Southern African Development Community (SADC). The name Lesotho translates roughly into the land of the people who speak Sesotho. About 40% of the population lives below the international poverty line of US$1.25 a day.

List of districts of Lesotho by Human Development Index

This is a list of districts of Lesotho by Human Development Index as of 2017.

Mining industry of Lesotho

The mining industry of Lesotho is mostly concentrated on diamond mining and as such the mining sector in the country has not played any significant role in furthering its economy. Apart from diamonds, the country's main mineral resources have been identified as base metals, clays, dimension stone, sand, gravel and uranium. The lack of initiative to extract other minerals commercially is mainly attributed to the inadequacy of infrastructure and finances. Between 2000 and 2011, the percentage of GDP contributed by diamond mining to Lesotho's economy rose from "virtually zero" to about 4%.

Outline of Lesotho

The following outline is provided as an overview of and topical guide to Lesotho:

Lesotho – sovereign country located in Southern Africa. Lesotho is an enclave completely surrounded by the Republic of South Africa. Formerly Basutoland, it is a member of the Commonwealth of Nations. The name Lesotho roughly translates into "the land of the people who speak Sesotho."

Revenue stamps of Basutoland and Lesotho

Basutoland, now known as Lesotho, first issued revenue stamps in 1900 and continues to do so.

Women in Lesotho

In 2017, 1.1 million women were living in Lesotho, making up 51.48% of the population. 33% of women are under 15 years of age, 61.4% are between 15 and 64 years old and 5.3% are over 64 years old. They received full legal status in 2008 with the passage of The Lesotho Bank Savings and Development Act of 2008, and they die at a disproportionate rate from HIV/AIDs. But, historically women have wielded power as heads of households, with control over household financial decisions. The government has also taken steps to ensure more equal representation of genders in government with quotas, and women in Lesotho are more highly educated than men. Still, domestic abuse, sexual violence, lack of social mobility, and aforementioned health crises are persistent issues. Social and economic movements, like the mass immigration of men to South Africa, and the rise of the garment industry, have contributed to both the progress and problems facing women in Lesotho today.

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