Lesotho Economy Profile 2009

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 (purchasing power parity)

$3.293 billion (2008 est.)
$3.084 billion (2007 est.)
$2.942 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$1.62 billion (2008 est.)

GDP - real growth rate

6.8% (2008 est.)
4.8% (2007 est.)
6.2% (2006 est.)

GDP - per capita (PPP)

$1,500 (2008 est.)
$1,500 (2007 est.)
$1,400 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 15.1%
industry: 46.4%
services: 38.5% (2008 est.)

Population below poverty line

49% (1999)

Labor force

854,600 (2007 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)

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)

Investment (gross fixed)

40.8% of GDP (2008 est.)

Budget

revenues: $825.1 million
expenditures: $758.7 million (2008 est.)

Inflation rate (consumer prices)

10.7% (2008 est.)
8% (2007 est.)

Central bank discount rate

14.05% (31 December 2008)
12.82% (31 December 2007)

Commercial bank prime lending rate

NA% (31 December 2008)
14.13% (31 December 2007)

Stock of money

$416.5 million (31 December 2008)
$439.2 million (31 December 2007)

Stock of quasi money

$108.1 million (31 December 2008)
$160.2 million (31 December 2007)

Stock of domestic credit

$NA (31 December 2008)
$NA (31 December 2007)

Industries

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

Industrial production growth rate

10% (2008 est.)

Electricity - production

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

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 - imports

1,500 bbl/day (2005)

Oil - exports

0 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.)

Current Account Balance

$111 million (2008 est.)
$211.8 million (2007 est.)

Agriculture - products

corn, wheat, pulses, sorghum, barley; livestock

Exports

$953 million (2008 est.)
$805 million (2007 est.)

Exports - commodities

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

Exports - partners

US 93.6%, Madagascar 1.7%, Canada 1.5% (2008)

Imports

$1.882 billion (2008 est.)
$1.604 billion (2007 est.)

Imports - commodities

food; building materials, vehicles, machinery, medicines, petroleum products

Imports - partners

China 31.1%, Taiwan 23.5%, Hong Kong 19.4%, India 13.8%, Germany 5.2% (2008)

Reserves of foreign exchange and gold

$994 million (31 December 2008 est.)
$874 million (31 December 2007 est.)

Debt - external

$619 million (31 December 2008 est.)
$689 million (31 December 2007 est.)

Economic aid - recipient

$68.82 million (2005)

Currency (code)

loti (LSL); South African rand (ZAR)

Currency (code)

LSL; ZAR

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

1 April - 31 March