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Lesotho Lesotho

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Lesotho – Quick View
ECR score21.73 (Mar 2011)
ECR rank154 (Mar 2011)
GDP (2009)USD 1.68 billion
GNI per capita PPP (2010)USD 2,021
FDI inflow (2008)USD 199 million
Inflation (2010)3.1%
Central bank assets (2008)USD 1,192.99 million
Unemployment rate (2008)22.7%
Government deficit (2009)USD 42.83 million
Tax revenue (2009)USD 903.16 million
Government typeConstitutional Democratic
Recent political crisisNA
Economic freedom score156th
Freedom of information score90th
Corruption perception index78th
Birth rate28.6 per ‘000
Population balanceUnder 14 years – 41.6%
Population balanceOver 65 years – 4.5%
Life expectancy yearsMales – 44.5 years
Life expectancy yearsFemales – 45.8 years
Mortality rate16.8 per ‘000
Literacy rate90%
Internet access4%

[Top] Economic Overview

Lesotho’s economy primarily depends on small scale industries such as clothing, footwear, textiles, food processing and construction along with farming and animal husbandry.

Gross Domestic Product (GDP)

In 2009, Lesotho's GDP at purchaser’s price was LSL 14.21 billion, with a growth rate of 2%. The GDP at purchaser’s price in 2008 was LSL 13.17 billion. The IMF estimates that GDP at current prices in 2010 was LSL 15.4 billion.

Lesotho GDP and GDP growth rate

(Source: African Development Bank, IMF)

The GDP growth rate in 2009 was estimated to be 2% compared to 4.4% in 2008.

GDP per capita

Lesotho’s GDP per capita at current prices in 2010 was estimated at LSL 6,060.1 compared to LSL 5,511.28 in 2009.

(Source: IMF)

Gross national income (GNI)

Lesotho's GNI at current prices in 2008 was LSL 17,557 million compared to LSL 14,138 million in 2007.

Lesotho Gross national income

(Source: National Statistics, page: 39)

GNI per capita

The GNI per capita at current prices in 2008 was LSL 9,341 compared to LSL 7,528 in 2007.

In 2010, Lesotho’s GNI per capita at PPP was USD 2,021 compared to USD 1,661 in 2005.


Tax rates

Individual income tax

The highest tax rate on individual income in Lesotho is 35% and the lowest tax rate is 22%.


Monthly Income Slabs (LSL)

Income Tax Rate (%)

Below 1,705


1,705 – 3,115


Above 3,115


(Source: Lesotho revenue authority)

Corporate tax

The corporate tax rate for companies not involved in manufacturing or farming is 25%. Corporate tax rates for manufacturing companies is 10% and 15% for agricultural companies.

(Source: heritage.org)


The inflation rate was above the 4% mark for the first three months of 2010. Inflation then fluctuated for the remaining months and was estimated at 3.1% in December 2010.

(Source: National Statistics)

Lesotho Inflation rate

(Source: African Development Bank, page: 234)

FDI Inflow

FDI inflows to Lesotho during 2008 amounted to USD 199 million compared to USD 106 million in 2007.


Lesotho FDI inflow

(Source: African Development Bank, page: 235)


Central bank assets


Assets of the Central Bank of Lesotho (LSL million)




Foreign assets



Cash and balances






IMF Accounts



Other Foreign Assets



Claims on government



Claims on private sector



Unclassified assets



Total Assets




(Source: Central Bank of Lesotho)

[Top] Financial Indicators & Government Financial

Consumer price index

The consumer price index in 2009 was 186.3 compared to 177.8 in 2008.

Lesotho Consumer Price Index

Base: Year 2000 = 100

(Source: African Development Bank, page: 51)

Interest rates

According to the Central Bank of Lesotho, the interest rate on savings deposit is 1.09% and 2.74% for 12 month time deposits.

(Source: Central Bank of Lesotho)

Money supply

In 2009, broad money and narrow money measures in Lesotho were calculated at LSL 6,100 million and LSL 4,630 million respectively.

Lesotho Monetary aggregates

(Source: African Development Bank, page: 59, 235)

Total currency in circulation during 2009 was LSL 598.6 million, of which LSL 583.8 million were in notes and LSL 14.8 million were in coins.

(Source: Central Bank of Lesotho)

Government expenditure

Government expenditure in 2009 increased by about 11.7% from the previous year and total expenses were recorded at LSL 8,546.7 million. In 2008, national government’s total expenditure was LSL 7,653.4 million.

Government expenditure (LSL million)




Recurrent expenditure



Purchases of Goods and Services



Personnel Emoluments



Other Goods and Services



Interest payments









Subsidies and Transfers



Capital expenditure and Net lending



Total Expenditure and Net Lending



(Source: National Bank)


Public debt levels

In 2009, public external debt was USD 695 million compared to USD 684 million in 2008.

Lesotho Public debt

(Source: African Development Bank, page: 235)

Official exchange rate

According to the most recent data (24th March 2011) from the Central Bank of Lesotho, the exchange rate of the Lesotho Loti (LSL) was 6.88 per US dollar.  In March 2010, the official exchange rate was LSL 7.39 per USD.

(Source: Central Bank of Lesotho, Central Bank of Lesotho, page: S-26)

Lesotho Exchange rate

(Source: African Development Bank, page: 235)


Government finances

Fiscal balance

The government fiscal balance in 2009 registered a deficit of LSL 361.57 million. In 2008, the fiscal balance of Lesotho’s government was in surplus of LSL 422.8 million.

Lesotho fiscal balance

(Source: Central Bank of Lesotho, page: 126)

The fiscal deficit in 2009-10 was LSL 361.57 million compared to a surplus of LSL 422.8 million in 2008-09.

Total revenue

In 2009, the government revenue was projected to increase by about 10% over the previous fiscal year. The total revenues were projected to reach LSL 8,185.13 million in 2009-10 compared to LSL 8,076.2 million in 2008-09.


Government revenue (LSL million)


2009-10 (Projected)





Tax revenue






Income Taxes



Taxes on Goods and Services



Other Taxes



Non-tax revenue



of which: Water Royalties



Total Receipts



 (Source: Central Bank of Lesotho, page: 126)

Tax revenue

In 2009, government tax revenues reached LSL 7,624.2 million, an increase of approximately 5.5% over the previous year. In 2008, total tax revenue was recorded at LSL 7,229.2 million.


Lesotho Tax revenue

P – Projected

(Source: Central Bank of Lesotho, page: 126)

Total Grants

Total grants received in 2009 amounted to LSL 753.9 million compared to LSL 189.1 million in 2008.


Lesotho Grants


P – Projected

(Source: Central Bank of Lesotho, page: 126)

Current account balance

The current account balance was running a deficit of LSL 213.69 million in Q1 2010. Lesotho has been registering a current account deficit since Q3 2009. Lesotho registered a current account surplus in Q4 2007 to Q4 2008.


Lesotho Current account balance

(Source: IMF)

Balance of payments

Balance of Payments (LSL million)


Q1 2010

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Current account
























Current transfers






Capital account






Financial account






Reserve assets






Errors and omissions






Central Bank of Lesotho, Page: S-28)

[Top] Labour Force and Employment Overview

In 2008, the total number of the economically active population (labour force) was registered at 788,541 people. Of the total labour force, approximately 54.2% i.e. 427,143 people were male and 45.8% (361,398 people) were female.

(Source: National Statistics, page: 64)

The total labour force participation rate in 2008 was 63.5%. The labour force participation rate for men and women was 72.6% and 55.3% respectively.

(Source: National Statistics, page: 64)

In 2008, the total number of people in employment was 609,152 people, of which 336,719 were male and 272,433 were female.

National Statistics, page: 64)

Lesotho Employment by sector

(Source: National Statistics, page: 63)

41% of the labour force are employed in the agricultural sector, followed by the private sector (30%), private households (22%) and the government (7%).


The total number of unemployed people in Lesotho in 2008 was 179,390, of which 90,424 were male and 88,966 were female. The unemployment rate in Lesotho was 22.7%. The unemployment rate was higher for women with 24.6% compared to 21.2% for men.

(Source: National Statistics, page: 64)

Minimum wage

The minimum wage in Lesotho in 2009 was LSL 836. In 2008, the minimum wage was LSL 812.

Lesotho Minimum wage

(Source: National Statistics, page: 66)

Level of unionisation

The laws in Lesotho allows workers in the private sector to form and join trade unions. Employees in the public sector do not have the right to form or join unions. However, they can form or join associations. All trade unions in Lesotho have to register with the Registrar of Trade Unions.

Unions and employees have the right to strike; but since the procedure for strike is complicated, there have been no official strikes in Lesotho for years. Civil servants cannot go on strike and any such actions by public sector employees is considered illegal.

(Source: ituc-csi.org, ituc-csi.org)

The Lesotho Trade Union Congress is the umbrella body for all trade unions in Lesotho.

The main trade unions in Lesotho include –

  • Constructions and Allied Workers Union of Lesotho
  • Lesotho Clothing and Allied Workers Union
  • Lesotho Teachers Trade Union
  • Lesotho Trade Union Congress
  • Lesotho Transport & Allied Workers Union
  • Lesotho Wholesalers Catering and Allied Workers Union

(Source: commonwealth-of-nations.org)

[Top] Political Stability

Lesotho has a democratic system of government. The monarch is the head of state and the prime minister is the head of the government. The monarch appoints the rime minister and the cabinet ministers, based on the prime minister’s recommendations.

Lesotho's legislature is bicameral and consists of a national assembly and senate. The national assembly is made up of 120 members and the senate of 33 members. The members of the national assembly are directly elected. Of the 33 members in senate, 11 are appointed by the King on advice of the Council of States. The members of both chambers are appointed for a term of five years.

(Source: commonwealth-of-nations.org, IPU)

The main political parties in Lesotho are –

  • Lesotho Congress for Democracy (LCD)
  • Lesotho People’s Congress (LPC)
  • Basotho Congress Party (BCP)
  • Basotho National Party (BNP)
  • Basotho African Congress (BAC)
  • All Basotho Convention (ABC)
  • Basotho Democratic National Party (BNDP)

(Source: fco.gov.uk)

Regulatory environment in Lesotho

Lesotho Economic Freedom Indices


Lesotho is ranked 156th in the 2011 Index of Economic Freedom, with a score of 47.5. Lesotho ranks 36th out of 46 regional countries in the Sub-Saharan Africa region. Lesotho’s overall score is well below than the global and regional averages.

Corruption perception

The Corruption Perceptions Index (CPI) is a survey to measure the perceived level of corruption across countries worldwide. Lesotho is ranked 78th on the 2010 list of CPI which indicates that the corruption levels in the public departments in Lesotho is fairly low.


Lesotho’s CPI rankings have improved since 2009 – it was ranked 89th with a score of 3.3 which indicates that the perceived levels of corruption have slightly decreased in Lesotho.


Freedom of information

The constitution guarantees freedom of speech and of the press. However, there have been instances where the press has been fined by the court for publications which defame or criticise the government. Journalism groups in Lesotho have asked the government to form a media council or a regulatory body who can mediate defamation issues.

The independent newspapers in Lesotho operate freely and are allowed to criticise government. However, the print and broadcast media operated by government often reproduce the views of the ruling party.

(Source: freedomhouse.org)

Lesotho is ranked 90th on World Press Freedom Index 2010, with a score of 24 which indicates that the media is restricted.

(Source: rsf.org)


  • Public Eye
  • Makatolle
  • MoAfrica
  • Mohlanka
  • Mopheme
  • The Mirror

(Source: BBC)

Judicial system

The judicial system in Lesotho is independent. Lesotho’s legal system is based on English common law and Roman-Dutch law. The judiciary includes a Court of Appeal, the High Court, Magistrate's Courts, and traditional courts.

Trials in Lesotho are carried out by judges instead of by jury. In the case of criminal trials, two judges act as observers.

(Source: Ministry of Justice)

[Top] Demographic Overview

The total population of Lesotho in mid-2009 was approximately 2.07 million, increasing at a rate of 5% over previous years.

(Source: African Development Bank, page: 34)

In 2009, 52.8% of the total population of 2.1 million people, were female showing that the gender ratio in Leotho was imbalanced i.e. there were about 89.4 men for every 100 women in Lesotho.

Lesotho Population by gender, 2009

(Source: UN data, African Development Bank, page: 232)

Population by age group

In 2009, approximately 55% of total population was in the 15 to 64 year age group.

Lesotho Population by age group

(Source: African Development Bank, page: 232)

Life expectancy

Average life expectancy at birth in 2009 was 45.6 years. Life expectancy for men and women between 2005 and 2010 was 44.5 years and 45.8 years respectively.

(Source: African Development Bank, page: 232, UN data)

Birth rate and mortality rate

The birth rate in Lesotho in 2009 was 28.6 per thousand people. The birth rate has decreased gradually since 2001. In 2001, the birth rate was 32.1 per thousand people.

(Source: African Development Bank, page: 232)

The mortality rate in Lesotho in 2009 was 16.8 per thousand people compared to 16.9 deaths per thousand people in 2008. The infant mortality rate between 2005 and 2010 was 69.6 per thousand live births.

(Source: African Development Bank, page: 232, UN data)

Migration and urbanisation

Net migration in Lesotho between 2005 and 2010 was -3.5 per thousand people. The international migrant stock till mid-2010 was recorded at 6,300 people. This was approximately 0.3% of the toatl population. 45.5% of all immigrants were female.

(Source: IOM, UN data)

In 2009, approximately 26% of the total population were living in urban areas.

(Source: African Development Bank, page: 232)

Between 2005 and 2010 the urban population in Lesotho grew at an annual rate of 3.5%. For the same period, the rural population declined at a rate of 0.3%. (Source: UN data)

Ethnic environment

Ethnic groups in Lesotho include:

  • Basotho
  • Europeans
  • Asians
  • Xhosa

Religions followed in Lesotho include Christianity, Lesotho Evangelical, Anglican, Islam, Hindu, and other indigenous religions.

(Source: state.gov)

Human development index

Lesotho ranked 141st out of 169 countries on the Human Development index 2010 conducted by the United Nations. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income).


[Top] Soft Infrastructure

Literacy Rate

The adult literacy rate in Lesotho between 2005 and 2008 was estimated to be 90%. The literacy rate of men and women in the 15 to 24 year age group between 2004 and 2008 was estimated to be 86% and 98% respectively.

(Source: UNICEF)

According to government policy, the education system in Lesotho consists of ten years of basic education, with seven years of primary and three years of lower secondary education.

The six distinct levels of education in Lesotho are –

  • Early childhood care and development education
  • Primary education
  • Lower secondary education
  • Upper secondary education
  • Post-secondary non-tertiary education
  • University education

Primary education is free and compulsory.

(Source: National Statistics)

The combined gross enrolment ratio for both men and women in 2010 was estimated at 61.5%. In 2008, expenditure on education was 12.4% of GDP.

(Source: UNDP)

Healthcare system

The health care system in Lesotho is divided into three levels – primary, secondary and tertiary.

The primary level includes health posts and health centres; the secondary level includes class IIA, IIB and III hospitals; and the tertiary level includes the National Referral Hospital, the National Mental Health Hospital and the Leprosy Hospital.

Lesotho has 60 nurses and midwives, 10 physicians, 1.8 dentists, 7 pharmacists, 6.2 environmental and public health workers, and 130 hospital beds, for every 100,000 individuals.

Approximately 23% of the population has HIV/AIDS, making Lesotho the country with the third highest prevalence globally. The death rate due to HIV/AIDS is 896 per 100,000 people. Approximately 490 individuals per 100,000 people suffer from tuberculosis and the death rate is 27 per 100,000 individuals.

HIV/ AIDS is a major cause of death, accounting for approximately 58.1% of deaths in 2004. Other causes of death include cardiovascular diseases and cancer.

(Source: mca.org.ls, estandardsforum.org)

[Top] Hard Infrastructure

The main mode of transport in Lesotho is by road and air travel. The railways in Lesotho are not well developed and the Maseru Depot is the only rail terminal which connects to industrial areas in South Africa.


The total length of roadways in Lesotho is 7,091 km, of which 1,404 km are paved and 5,687 km are unpaved roads.

(Source: ifrtd.org)


Lesotho is a landlocked country and does not have any ports.

(Source: worldportsource.com)




Airport name

Runway length (ft)














Mejametalana AB



Moshoeshoe I International





Qacha's Nek

Qacha's Nek








(Source: aircraft-charter-world.com)

Telecommunications networks

In 2009, the number of fixed telephone lines in Lesotho was 40,000, a decrease of approximately 2.9% from 2008. In 2008, the number of fixed telephone lines was 41,190. The number of fixed telephone lines per 100 inhabitants decreased to 1.94 in 2009 from 2.01 in 2008.

(Source: ITU)

In 2009, mobile phone subscription increased by approximately 11.4% compared to the previous year. The number of mobile phone subscriptions in 2009 was 661,000 compared to 593,216 in 2008. There were 31.98 mobile subscriptions per 100 inhabitants in 2009 compared to 28.95 in 2008.

(Source: ITU)

Since June 2010, 76,800 people i.e. 4% of the total population use internet services.


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