Lesotho Economy - 2005

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, but the government has strengthened its tax system to reduce dependency on customs duties. Completion of a major hydropower facility in January 1998 now permits the sale of water to South Africa, also generating royalties for Lesotho. 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 and a rapidly growing apparel-assembly sector. The garment industry 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.

GDP:
purchasing power parity - $5.892 billion (2004 est.)

GDP - real growth rate:
3.3% (2004 est.)

GDP - per capita:
purchasing power parity - $3,200 (2004 est.)

GDP - composition by sector:
agriculture: 15.2%
industry: 43.9%
services: 40.9% (2004 est.)

Labor force:
838,000 (2000)

Labor force - by occupation:
86% of resident population engaged in subsistence agriculture; roughly 35% of the active male wage earners work in South Africa

Unemployment rate:
45% (2002)

Population below poverty line:
49% (1999)

Household income or consumption by percentage share:
lowest 10%: 0.9%
highest 10%: 43.4%

Distribution of family income - Gini index:
56 (1986-87)

Inflation rate (consumer prices):
5.3% (2004 est.)

Investment (gross fixed):
39.6% of GDP (2004 est.)

Budget:
revenues: $698.5 million
expenditures: $697.6 million, including capital expenditures of $15 million (2004 est.)

Agriculture - products:
corn, wheat, pulses, sorghum, barley; livestock

Industries:
food, beverages, textiles, apparel assembly, handicrafts; construction; tourism

Industrial production growth rate:
15.5% (1999)

Electricity - production:
314 million kWh; note - electricity supplied by South Africa (2002)

Electricity - consumption:
308 million kWh (2002)

Electricity - exports:
0 kWh (2002)

Electricity - imports:
16 million kWh; note - electricity supplied by South Africa (2002)

Oil - production:
0 bbl/day (2001 est.)

Oil - consumption:
1,500 bbl/day (2001)

Oil - exports:
NA

Oil - imports:
NA

Current account balance:
$-108.3 million (2004 est.)

Exports:
$484.5 million f.o.b. (2004 est.)

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

Exports - partners:
US 96%, Canada 1.5%, Belgium/Luxembourg 1.1% (2004)

Imports:
$730.9 million f.o.b. (2004 est.)

Imports - commodities:
food; building materials, vehicles, machinery, medicines, petroleum products (2000)

Imports - partners:
Hong Kong 34.2%, Taiwan 33.9%, China 11.2%, Germany 9.2% (2004)

Reserves of foreign exchange and gold:
$402.2 million (2004 est.)

Debt - external:
$735 million (2002)

Economic aid - donor:
ODA $4.4 million

Economic aid - recipient:
$41.5 million (2000)

Currency (code):
loti (LSL); South African rand (ZAR)

Exchange rates:
maloti per US dollar - 6.4597 (2004), 7.5648 (2003), 10.5407 (2002), 8.6092 (2001), 6.9398 (2000)