Lesotho Economy

Is Lesotho a rich country?

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.

Lesotho Economy Data

What is the GDP of Lesotho?

Currency Name and Code Loti (LSL)
GDP - Gross Domestic Product (PPP) $5,575,000,000 (USD)
GDP - official exchange rate $2,035,000,000 (USD)
GDP - real growth rate 2.6%
GDP Per Capita $3,000.00 (USD)
GDP by Sector- agriculture 5.2%
GDP by Sector- Industry 28.3%
GDP by Sector- services 66.5%
GDP - composition, by end use household consumption: 79.7%

government consumption: 32%

investment in fixed capital: 29.6%

investment in inventories: -3.9%

exports of goods and services: 39%

imports of goods and services: -76.4%
Population Below Poverty Line 49%
Inflation Rate 6.1%
Labor Force 854,600
Labor Force By Occupation- agriculture 86%
Labor Force by Occupation - 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 45%
Fiscal Year 1 April - 31 March
Annual Budget $968,400,000 (USD)
Budget Surplus or Deficit - percent of GDP -0.9%
Taxes and other revenues - percent of GDP 59.5%
Major Industries food, beverages, textiles, apparel assembly, handicrafts; construction; tourism
Industrial Growth Rate 3%
Agriculture Products corn, wheat, pulses, sorghum, barley; livestock
Exchange Rate per US Dollar loti (LSL); South African rand (ZAR)
Labor Force By Occupation - industry and services 14%
Child Labor - % of children ages 5-14 23%
Child Labor - # of children ages 5-14 103,020
Commercial Bank Prime Lending Rate 10%

Labor Force by Occupation- As reported by Lesotho

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