Lesotho Economy

Figure 1.--Lesotho is a small, land-locked mountanous country surrounded by South Africa. It has a largely agricultural economy centered on livestock. It is a very poor country. Here a family from South Africa is visiting Lesotho anout 1978.

The economy is based on farming and livestock. Lesotho hevily relied on remittances from miners employed in South Africa.There was what was called the Great Basuto Migration each year when the men went to South Africa to work in the mines. The number of these mineworkers has declined steadily in recent years. Customs duties from the Southern Africa Customs Union (a artifact of British rule) provided most of government revenue. The Government in recent years .has moved to strengthened its tax system so as not to be so dependent on customs duties. Lesotho completed a major hydropower facility (January 1998). This has made possible the sale of water to South Africa and generated royalties for Lesotho. Lesotho now produces about 90 percent of its electrical power needs. Small-scale manufacturing based on farm products is developing and supports the milling, canning, leather, and jute industries. There is also a growing apparel-assembly industry. This has benefitted from trade benefits through the Africa Growth and Opportunity Act. Despite the diversification in recent yeas, Lesotho's economy is still centered on subsistence agriculture, especially livestock. Drought has adversely affected the agricultural sector. The ecomomy continues to be aflicted by a concentration of wealth and inequality in the distribution of income.


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Created: 11:04 PM 6/26/2007
Last updated: 3:30 AM 6/12/2009