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Lesotho Economy

Economy - overview: Small, landlocked, and mountainous, Lesotho's
primary natural resource is water. Its economy is based on
subsistence agriculture, livestock, and remittances from miners
employed in South Africa. The number of such mineworkers has
declined steadily over the past several years. A small manufacturing
base depends largely on farm products that 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 for Lesotho. The pace of substantial
privatization has increased in recent years. In December 1999, the
government embarked on a nine-month IMF staff-monitored program
aimed at structural adjustment and stabilization of macroeconomic
fundamentals. The government is in the process of applying for a
three-year successor program with the IMF under its Poverty
Reduction and Growth Facility.

GDP: purchasing power parity - $5.1 billion (2000 est.)

GDP - real growth rate: 2.5% (2000 est.)

GDP - per capita: purchasing power parity - $2,400 (2000 est.)

GDP - composition by sector: agriculture: 18%

industry: 38%

services: 44% (1999)

Population below poverty line: 49.2% (1999 est.)

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

highest 10%: 43.4% (1986-87)

Inflation rate (consumer prices): 6% (2000 est.)

Labor force: 700,000 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: 45% (2000 est.)

Budget: revenues: $76 million

expenditures: $80 million, including capital expenditures of $15
million (FY99/00 est.)

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

Industrial production growth rate: 15.5% (1999 est.)

Electricity - production: 0 kWh; note - electricity supplied by
South Africa (1999)

Electricity - production by source: fossil fuel: 0%

hydro: 0%

nuclear: 0%

other: 0% (1999)

Electricity - consumption: 55 millio