Lesotho Economy 2007

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 now permits the sale of water to South Africa and also generates 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.

GDP (purchasing power parity):
$5.492 billion (2006 est.)

GDP (official exchange rate):
$1.48 billion (2006 est.)

GDP - real growth rate:
6.2% (2006 est.)

GDP - per capita (PPP):
$2,700 (2006 est.)

GDP - composition by sector:
agriculture: 18.2%
industry: 40.8%
services: 41% (2006 est.)

Labor force:
838,000 (2000)

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)

Population below poverty line:
49% (1999)

Household income or consumption by percentage share:
lowest 10%: 0.9%
highest 10%: 43.4% (2002 est.)

Distribution of family income - Gini index:
63.2 (1995)

Inflation rate (consumer prices):
6.1% (2006 est.)

Investment (gross fixed):
40.5% of GDP (2006 est.)

Budget:
revenues: $995.8 million
expenditures: $763.2 million (2006 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:
350 million kWh; note - electricity supplied by South Africa (2005)

Electricity - consumption:
338.5 million kWh (2005)

Electricity - exports:
0 kWh (2005)

Electricity - imports:
13 million kWh; note - electricity supplied by South Africa (2005)

Oil - production:
0 bbl/day (2004 est.)

Oil - consumption:
1,400 bbl/day (2004)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Oil - proved reserves:
0 bbl (1 January 2006)

Natural gas - production:
0 cu m (2005 est.)

Natural gas - consumption:
0 cu m (2005 est.)

Current account balance:
$10 million (2006 est.)

Exports:
$752 million f.o.b. (2006 est.)

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

Exports - partners:
US 81.9%, Belgium 15%, Canada 1.9% (2006)

Imports:
$1.361 billion f.o.b. (2006 est.)

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

Imports - partners:
Hong Kong 33.4%, China 31.2%, Germany 7.7%, India 7.3% (2006)

Economic aid - recipient:
$68.82 million (2005)

Reserves of foreign exchange and gold:
$706 million (2006 est.)

Debt - external:
$652 million (2006 est.)

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

Exchange rates:
maloti per US dollar - 6.85 (2006), 6.3593 (2005), 6.4597 (2004), 7.5648 (2003), 10.541 (2002)