Lesotho Economy - 2022

GEOGRAPHICAL NAMES 

Economic overview

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 85% 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 26% of total GDP in 2016; however, SACU revenues are volatile and expected to decline over the next 5 years. Lesotho also gains royalties from the South African Government 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 about 26% of GDP in 2017. The government remains Lesotho's largest employer; in 2016, the government wage bill rose to 23% of GDP – the largest in Sub-Saharan Africa. 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 accounted for nearly 35% of total exports in 2015. Lesotho managed steady GDP growth at an average of 4.5% from 2010 to 2014, dropping to about 2.5% in 2015-16, but poverty remains widespread around 57% of the total population.

Real GDP (purchasing power parity)

$4.88 billion (2020 est.)

$5.49 billion (2019 est.)

$5.51 billion (2018 est.)

note: data are in 2017 dollars

Real GDP growth rate

-1.6% (2017 est.)

3.1% (2016 est.)

2.5% (2015 est.)

Real GDP per capita

$2,300 (2020 est.)

$2,600 (2019 est.)

$2,600 (2018 est.)

note: data are in 2017 dollars

GDP (official exchange rate)

$2.462 billion (2019 est.)

Inflation rate (consumer prices)

5.3% (2019 est.)

3.8% (2018 est.)

5.1% (2017 est.)

Credit ratings

Fitch rating: B (2019)

note: The year refers to the year in which the current credit rating was first obtained.

GDP - composition, by sector of origin

agriculture: 5.8% (2016 est.)

industry: 39.2% (2016 est.)

services: 54.9% (2017 est.)

GDP - composition, by end use

household consumption: 69.2% (2017 est.)

government consumption: 26.4% (2017 est.)

investment in fixed capital: 31.4% (2017 est.)

investment in inventories: -13.4% (2017 est.)

exports of goods and services: 40.8% (2017 est.)

imports of goods and services: -54.4% (2017 est.)

Agricultural products

milk, potatoes, maize, vegetables, fruit, beef, game meat, mutton, beans, wool

Industries

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

Industrial production growth rate

12.5% (2017 est.)

Labor force

930,800 (2017 est.)

Labor force - by occupation

agriculture: 86%

industry and services: 14% (2002 est.)

note: most of the resident population is engaged in subsistence agriculture; roughly 35% of the active male wage earners work in South Africa

Unemployment rate

28.1% (2014 est.)

25% (2008 est.)

Youth unemployment rate (ages 15-24)

total: 25.6%

male: 18.6% NA

female: 38.1% (2019 est.) NA

Population below poverty line

49.7% (2017 est.)

Gini Index coefficient - distribution of family income

44.9 (2017 est.)

56 (1986-87)

Household income or consumption by percentage share

lowest 10%: 1%

highest 10%: 39.4% (2003)

Budget

revenues: 1.09 billion (2017 est.)

expenditures: 1.255 billion (2017 est.)

Budget surplus (+) or deficit (-)

-6% (of GDP) (2017 est.)

Public debt

33.7% of GDP (2017 est.)

36.2% of GDP (2016 est.)

Taxes and other revenues

39.7% (of GDP) (2017 est.)

Fiscal year

1 April - 31 March

Current account balance

-$102 million (2017 est.)

-$201 million (2016 est.)

Exports

$900 million (2020 est.) note: data are in current year dollars

$1.09 billion (2019 est.) note: data are in current year dollars

$1.25 billion (2018 est.) note: data are in current year dollars

Exports - partners

United States 29%, Belgium 26%, South Africa 25%, Switzerland 6% (2019)

Exports - commodities

diamonds, clothing and apparel, low-voltage protection equipment, wheat products, footwear (2019)

Imports

$1.96 billion (2020 est.) note: data are in current year dollars

$2.2 billion (2019 est.) note: data are in current year dollars

$2.39 billion (2018 est.) note: data are in current year dollars

Imports - partners

South Africa 85%, China 5% (2019)

Imports - commodities

refined petroleum, clothing and apparel, packaged medicines, delivery trucks, poultry meats (2019)

Reserves of foreign exchange and gold

$657.7 million (31 December 2017 est.)

$925.2 million (31 December 2016 est.)

Debt - external

$868 million (2019 est.)

$834 million (2018 est.)

Exchange rates

maloti (LSL) per US dollar -

14.48 (2017 est.)

14.71 (2016 est.)

14.71 (2015 est.)

12.76 (2014 est.)

10.85 (2013 est.)

NOTE: The information regarding Lesotho on this page is re-published from the 2022 World Fact Book of the United States Central Intelligence Agency and other sources. No claims are made regarding the accuracy of Lesotho 2022 information contained here. All suggestions for corrections of any errors about Lesotho 2022 should be addressed to the CIA or the source cited on each page.