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Lesotho Economy Profile 2018

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Economy - overviewSmall, 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.
GDP (purchasing power parity)$7.448 billion (2017 est.)
$7.118 billion (2016 est.)
$6.954 billion (2015 est.)
note: data are in 2017 dollars
GDP (official exchange rate)$2.721 billion (2016 est.)
GDP - real growth rate4.6% (2017 est.)
2.4% (2016 est.)
2.5% (2015 est.)
GDP - per capita (PPP)$3,900 (2017 est.)
$3,700 (2016 est.)
$3,600 (2015 est.)
note: data are in 2017 dollars
Gross national saving20.3% of GDP (2017 est.)
21% of GDP (2016 est.)
23.8% of GDP (2015 est.)
GDP - composition, by end usehousehold consumption: 69.2%
government consumption: 26.4%
investment in fixed capital: 31.4%
investment in inventories: -13.4%
exports of goods and services: 40.8%
imports of goods and services: -54.4% (2017 est.)
GDP - composition by sectoragriculture: 5.3%
industry: 34.6%
services: 60.1% (2017 est.)
Population below poverty line57% (2016 est.)
Labor force930,800 (2017 est.)
Labor force - by occupationagriculture: 86%
industry and services: 14%
note: most of the resident population is engaged in subsistence agriculture; roughly 35% of the active male wage earners work in South Africa (2002 est.)
Unemployment rate28.1% (2014 est.)
25% (2008 est.)
Unemployment, youth ages 15-24total: 34.4%
male: NA
female: NA (2013 est.)
Household income or consumption by percentage sharelowest 10%: 1%
highest 10%: 39.4% (2003)
Distribution of family income - Gini index63.2 (1995)
56 (1986-87)
Budgetrevenues: $1.057 billion
expenditures: $1.16 billion (2017 est.)
Taxes and other revenues38.8% of GDP (2017 est.)
Budget surplus (+) or deficit (-)-3.8% of GDP (2017 est.)
Public debt47.8% of GDP (2016 est.)
49.5% of GDP (2015 est.)
Inflation rate (consumer prices)6.6% (2017 est.)
6.4% (2016 est.)
Central bank discount rate6.75% (2 February 2016)
6.25% (31 December 2015)
Commercial bank prime lending rate12% (31 December 2017 est.)
11.58% (31 December 2016 est.)
Stock of narrow money$301.5 million (31 December 2017 est.)
$356.3 million (31 December 2016 est.)
Stock of broad money$703.2 million (31 December 2017 est.)
$725.2 million (31 December 2016 est.)
Stock of domestic credit$225.4 million (31 December 2017 est.)
$230.9 million (31 December 2016 est.)
Agriculture - productscorn, wheat, pulses, sorghum, barley; livestock
Industriesfood, beverages, textiles, apparel assembly, handicrafts, construction, tourism
Industrial production growth rate8.2% (2017 est.)
Current Account Balance-$232 million (2017 est.)
-$174 million (2016 est.)
Exports$1.031 billion (2017 est.)
$894 million (2016 est.)
Exports - commoditiesmanufactures (clothing, footwear), wool and mohair, food and live animals, electricity, water, diamonds
Exports - partnersSouth Africa 56.5%, US 35.4% (2016)
Imports$1.718 billion (2017 est.)
$1.613 billion (2016 est.)
Imports - commoditiesfood; building materials, vehicles, machinery, medicines, petroleum products
Imports - partnersSouth Africa 84.5% (2016)
Reserves of foreign exchange and gold$983 million (31 December 2017 est.)
$925.2 million (31 December 2016 est.)
Debt - external$952.5 million (31 December 2017 est.)
$921.3 million (31 December 2016 est.)
Stock of direct foreign investment - at home$532.5 million (31 December 2017 est.)
$456.5 million (31 December 2016 est.)
Exchange ratesmaloti (LSL) per US dollar -
14.48 (2017 est.)
14.71 (2016 est.)
14.71 (2015 est.)
12.76 (2014 est.)
10.85 (2013 est.)
Fiscal year1 April - 31 March

Source: CIA World Factbook
This page was last updated on January 20, 2018

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