Lesotho: Economy#

Small, mountainous, and completely landlocked by South Africa, Lesotho is a least developed country in which about three-fourths of the people live in rural areas and engage in subsistence agriculture. Lesotho produces less than 20% of the nation's demand for food. Rain-fed agriculture is vulnerable to weather and climate variability; an estimated 725,500 people will require food assistance in 2012/13. The distribution of income in Lesotho remains inequitable. 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. Government revenue depends heavily on transfers from South Africa. Customs duties from the Southern Africa Customs Union accounted for 44% of government revenue in 2012. 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. Access to credit remains a problem for the private sector. The government maintains a large presence in the economy - government consumption accounted for 39% of GDP in 2013 and the government remains Lesotho's largest employer. 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. Lesotho's $362.5 million Millennium Challenge Account Compact, which focused on strengthening the healthcare system, developing the private sector, and providing access to improved water supplies and sanitation facilities, will end in September 2013. Despite the 2008/09 global economic crisis, the economy has had strong, but declining growth since 2010.

Economic Facts#

GDP (purchasing power parity)$4.265 billion (2013 est.)
$4.096 billion (2012 est.)
$3.918 billion (2011 est.)
note: data are in 2013 US dollars
GDP - real growth rate4.1% (2013 est.)
4.5% (2012 est.)
5.7% (2011 est.)
GDP - per capita (PPP)$2,200 (2013 est.)
$2,200 (2012 est.)
$2,100 (2011 est.)
note: data are in 2013 US dollars
GDP - composition, by sector of originagriculture: 7.4%
industry: 34.5%
services: 58.2% (2013 est.)
Population below poverty line49% (1999)
Household income or consumption by percentage sharelowest 10%: 1%
highest 10%: 39.4% (2003)
Labor force - by occupationagriculture: 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.)
Exports - commoditiesmanufactures (clothing, footwear), wool and mohair, food and live animals, electricity, water, diamonds
Agriculture - productscorn, wheat, pulses, sorghum, barley; livestock
Budgetrevenues: $1.462 billion
expenditures: $1.483 billion (2013 est.)
Imports - commoditiesfood; building materials, vehicles, machinery, medicines, petroleum products
Exchange ratesmaloti (LSL) per US dollar -
9.575 (2013 est.)
8.2 (2012 est.)
7.32 (2010 est.)
8.47 (2009)
7.75 (2008)
Exports$941.2 million (2013 est.)
$972.4 million (2012 est.)
Debt - external$794 million (31 December 2013 est.)
$779.8 million (31 December 2012 est.)
Fiscal year1 April - 31 March
Imports$2.148 billion (2013 est.)
$2.239 billion (2012 est.)
Industrial production growth rate4.3% (2013 est.)
Industriesfood, beverages, textiles, apparel assembly, handicrafts, construction, tourism
Inflation rate (consumer prices)5% (2013 est.)
6.1% (2012 est.)
Labor force874,200 (2013 est.)
Unemployment rate25% (2008 est.)
45% (2002 est.)
Distribution of family income - Gini index63.2 (1995)
56 (1986-87)
Public debtNA
Current account balance-$518.4 million (2013 est.)
-$587.4 million (2012 est.)
Reserves of foreign exchange and gold$857.9 million (31 December 2013 est.)
$749.4 million (31 December 2012 est.)
GDP (official exchange rate)$2.457 billion (2013 est.)
Stock of direct foreign investment - at home$635.7 million (31 December 2013 est.)
$398 million (31 December 2012 est.)
Central bank discount rate9.36% (31 December 2012 est.)
10% (31 December 2010 est.)
Commercial bank prime lending rate10% (31 December 2013 est.)
10.12% (31 December 2012 est.)
Stock of domestic credit$85,420 (31 December 2013 est.)
$75,280 (31 December 2012 est.)
Stock of narrow money$425.1 million (31 December 2013 est.)
$408.9 million (31 December 2012 est.)
Stock of broad money$903.4 million (31 December 2013 est.)
$840.9 million (31 December 2012 est.)
Taxes and other revenues59.5% of GDP (2013 est.)
Budget surplus (+) or deficit (-)-0.9% of GDP (2013 est.)
GDP - composition, by end usehousehold consumption: 86%
government consumption: 39.4%
investment in fixed capital: 33.7%
investment in inventories: 1.2%
exports of goods and services: 47.9%
imports of goods and services: -108.2%
(2013 est.)
Gross national saving11.4% of GDP (2013 est.)
7.8% of GDP (2012 est.)
7.8% of GDP (2011 est.)