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Economy
Economy—overview: Small, landlocked, and mountainous, Lesotho's only important natural resource is water. Its economy is based on subsistence agriculture, livestock, and remittances from miners employed in South Africa. The number of such mine workers has declined steadily over the past several years. In 1996 their remittances added about 33% to GDP compared with the addition of roughly 67% in 1990. A small manufacturing base depends largely on farm products which support the milling, canning, leather, and jute industries. Agricultural products are exported primarily to South Africa. Proceeds from membership in a common customs union with South Africa form the majority of government revenue. Although drought has decreased agricultural activity over the past few years, completion of a major hydropower facility in January 1998 now permits the sale of water to South Africa, generating royalties that will be an important source of income for Lesotho. The pace of parastatal privatization has increased in recent years. Civil disorder in September 1998 destroyed 80% of the commercial infrastructure in Maseru and two other major towns. Most firms were not covered by insurance, and the rebuilding of small and medium business will be a significant challenge in terms of both economic growth and employment levels.
GDP: purchasing power parity—$5.1 billion (1997 est.)
GDP—real growth rate: 10% (1997 est.)
GDP—per capita: purchasing power parity—$2,400 (1997 est.)
GDP—composition by sector:
agriculture: 14%
industry: 42%
services: 44% (1996 est.)
Population below poverty line: 49.2% (1993 est.)
Household income or consumption
by percentage share:
lowest 10%: 0.9%
highest 10%: 43.4% (1986-87)
Inflation rate (consumer prices): 8% (1997 est.)
Labor force: 689,000 economically active
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: substantial unemployment and underemployment effecting more than half of the labor force (1996 est.)
Budget:
revenues: $507 million
expenditures: $487 million, including capital expenditures of
$170 million (FY96/97 est.)
Industries: food, beverages, textiles, handicrafts; construction; tourism
Industrial production growth rate: 19.7% (1995)
Electricity—production:
0 kWh (1995)
note: electricity supplied by South Africa
Electricity—production by
source:
fossil fuel: NA%
hydro: NA%
nuclear: NA%
other: NA%
Electricity—consumption: 335 million kWh (1996)
Electricity—exports: 0 kWh (1996)
Electricity—imports: 335 million kWh (1996)
Agriculture—products: corn, wheat, pulses, sorghum, barley; livestock
Exports: $200 million (f.o.b., 1997 est.)
Exports—commodities: manufactures 65% (clothing, footwear, road vehicles), wool and mohair 7%, food and live animals 7% (1996)
Exports—partners: South African Customs Union 66%, North America 26%, EU 4% (1996)
Imports: $880 million (f.o.b., 1997 est.)
Imports—commodities: food; building materials, vehicles, machinery, medicines, petroleum products (1995)
Imports—partners: South African Customs Union 90%, Asia 6%, EU 2% (1995)
Debt—external: $660 million (1997 est.)
Economic aid—recipient: $123.7 million (1995)
Currency: 1 loti (L) = 100 lisente
note: maloti (M) is the plural form of loti
Exchange rates: maloti (M) per US$1—5.98380 (January 1999), 5.52828 (1998), 4.60796 (1997), 4.29935 (1996), 3.62709 (1995), 3.55080 (1994); note—the Basotho loti is at par with the South African rand
Fiscal year: 1 April—31 March