Lesotho Economy 2008

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. In July 2007 Lesotho signed a Millennium Challenge Account Compact with the US worth $362.5 million.

GDP (purchasing power parity):
$3.088 billion (2007 est.)

GDP (official exchange rate):
$1.589 billion (2007 est.)

GDP - real growth rate:
4.8% (2007 est.)

GDP - per capita (PPP):
$1,500 (2007 est.)

GDP - composition by sector:
agriculture: 15.2%
industry: 45%
services: 39.7% (2007 est.)

Labor force:
838,000 (2000 est.)

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):
12% (2007 est.)

Investment (gross fixed):
48.5% of GDP (2007 est.)

Budget:
revenues: $951.4 million
expenditures: $855.4 million (2007 est.)

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

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

Industrial production growth rate:
12% (2007 est.)

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 (2005 est.)

Oil - consumption:
1,400 bbl/day (2005)

Oil - exports:
0 bbl/day (2004)

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

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

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

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

natural gas - exports:
0 cu m (2005 est.)

natural gas - imports:
0 cu m (2005)

natural gas - proved reserves:
0 cu m (1 January 2006 est.)

Current account balance:
-$28 million (2007 est.)

Exports:
$905 million f.o.b. (2007 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:
$1.584 billion f.o.b. (2007 est.)

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:
$889 million (31 December 2007 est.)

Debt - external:
$693 million (31 December 2007 est.)

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

Exchange rates:
maloti per US dollar - 7.25 (2007), 6.85 (2006), 6.3593 (2005), 6.4597 (2004), 7.5648 (2003)