Lesotho: Economy#
Small, mountainous, and completely landlocked by South Africa, Lesotho depends on a narrow economic base of textile manufacturing, agriculture, remittances, and regional customs revenue. About three-fourths of the people live in rural areas and engage in animal herding and subsistence agriculture, although Lesotho produces less than 20% of the nation's demand for food. Agriculture is vulnerable to weather and climate variability.Lesotho relies on South Africa for much of its economic activity; Lesotho imports 90% of the goods it consumes from South Africa, including most agricultural inputs. Households depend heavily on remittances from family members working in South Africa, in mines, on farms, and as domestic workers, though mining employment has declined substantially since the 1990s. Lesotho is a member of the Southern Africa Customs Union (SACU), and revenues from SACU accounted for roughly 44% of total government revenue in 2014. The South African Government also pays royalties for water transferred to South Africa from a dam and reservoir system in Lesotho. However, the government continues to strengthen its tax system to reduce dependency on customs duties and other transfers.
The government maintains a large presence in the economy - government consumption accounted for 37% of GDP in 2014 and the government remains Lesotho's largest employer. Access to credit remains a problem for the private sector. Lesotho's largest private employer is the textile and garment industry - approximately 36,000 Basotho, mainly women, work in factories producing garments for export to South Africa and the US. Diamond mining in Lesotho has grown in recent years and may contribute 8.5% to GDP by 2015, according to current forecasts.
Economic Facts#
| GDP (purchasing power parity) | $6.019 billion (2016 est.) $5.878 billion (2015 est.) $5.717 billion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $1.806 billion (2015 est.) |
| GDP - real growth rate | 2.4% (2016 est.) 2.8% (2015 est.) 3.4% (2014 est.) |
| GDP - per capita (PPP) | $3,100 (2016 est.) $3,000 (2015 est.) $3,000 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 27.8% of GDP (2016 est.) 24.1% of GDP (2015 est.) 23.4% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 70.4% government consumption: 27.2% investment in fixed capital: 30.2% investment in inventories: -1.6% exports of goods and services: 40.9% imports of goods and services: -67.1% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 7.3% industry: 31.1% services: 61.5% (2016 est.) |
| Agriculture - products | corn, wheat, pulses, sorghum, barley; livestock |
| Industries | food, beverages, textiles, apparel assembly, handicrafts, construction, tourism |
| Industrial production growth rate | 0.7% (2016 est.) |
| Labor force | 919,900 (2016 est.) |
| Labor force - by occupation | agriculture: 86% industry and services: 14% note: most of the resident population is engaged in subsistence agriculture; roughly 35% of the active male wage earners work in South Africa (2002 est.) |
| Unemployment rate | 28.1% (2014 est.) 25% (2008 est.) |
| Population below poverty line | 57.1% (2010 est.) |
| Household income or consumption by percentage share | lowest 10%: 1% highest 10%: 39.4% (2003) |
| Distribution of family income - Gini index | 63.2 (1995) 56 (1986-87) |
| Budget | revenues: $835.9 million expenditures: $978.3 million (2016 est.) |
| Taxes and other revenues | 46.3% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -7.9% of GDP (2016 est.) |
| Public debt | 53.4% of GDP (2015 est.) 47.8% of GDP (2014) |
| Fiscal year | 1 April - 31 March |
| Inflation rate (consumer prices) | 8.3% (2016 est.) 3.2% (2015 est.) |
| Central bank discount rate | 6.75% (2 February 2016) 6.25% (31 December 2015) |
| Commercial bank prime lending rate | 12.3% (31 December 2016 est.) 10.59% (31 December 2015 est.) |
| Stock of narrow money | $342.3 million (31 December 2016 est.) $340.6 million (31 December 2015 est.) |
| Stock of broad money | $535.4 million (31 December 2015 est.) $569.1 million (31 December 2014 est.) |
| Stock of domestic credit | $71.01 million (31 December 2016 est.) $47.8 million (31 December 2015 est.) |
| Current account balance | -$144 million (2016 est.) -$178 million (2015 est.) |
| Exports | $851.6 million (2016 est.) $844.1 million (2015 est.) |
| Exports - commodities | manufactures (clothing, footwear), wool and mohair, food and live animals, electricity, water, diamonds |
| Imports | $1.688 billion (2016 est.) $1.737 billion (2015 est.) |
| Imports - commodities | food; building materials, vehicles, machinery, medicines, petroleum products |
| Reserves of foreign exchange and gold | $812.5 million (31 December 2016 est.) $904.2 million (31 December 2015 est.) |
| Debt - external | $948.8 million (31 December 2016 est.) $866.7 million (31 December 2015 est.) |
| Stock of direct foreign investment - at home | $438.2 million (31 December 2016 est.) $376.2 million (31 December 2015 est.) |
| Exchange rates | maloti (LSL) per US dollar - 16.15 (2016 est.) 12.76 (2015 est.) 12.76 (2014 est.) 10.85 (2013 est.) 8.2 (2012 est.) |