1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

scheduled for 23 May 1998. Eight political parties and six
independent candidates have re g i s t e red so far. It is expected
that the main contenders will be the BCP, the Basotho National
P a rty and the LCD.
Dam construction in progress at the Lesotho Highlands Water Project.
G E N E R A L I N F O R M AT I O N
G e og r ap hy and Po p u l a t i o n
C overing an area of 30,355 km 2 , the Kingdom of Lesotho is a
small landlocked country, located in the ve ry south of Southern
A f r i c a ,s u rrounded by South A f r i c a . It is the only country in the
world to have all its terr i t o ry located at more than 1,000 metre s
a b ove sea leve l . The capital of Lesotho, M a s e r u , h a s
ap p rox i m a t e ly 170,000 inhabitants.
Lesotho has a population of about 2.1 m (1997 estimate),and an
estimated growth rate of 2.3 perc e n t . The major languages
s p o ken are English and Sesotho and the literacy rate is about 70
p e rc e n t . About 86 percent of the population is engaged in
subsistence farming, and ap p rox i m a t e ly 35 percent of the male
wage earners are employed in South A f r i c a ,p re d o m i n a n t ly in
the mining industry.
Lesotho is ranked at 137 out of 175 countries in the UNDP
1997 human development index (HDI) 1 ) , which puts it in the
same catego ry as Ghana (132), and India (138), or in the midd l e
of the SADC countries.
Political Ove rv i ew
Lesotho is a monarc hy and the king is the head of state. S i n c e
the adoption of the new constitution in 1993 the king has no
e xe c u t i ve or legislative powe r s . The present head of state is
King Letsie III, who succeeded his father at the throne in
Fe b r u a ry 1996.
At the end of Fe b r u a ry 1998 the Parliament was dissolved to
p re p a re for the country ’s third general elections, which are
1 ) . The ranking, d evised by the United Nations Development Pro g r a m m e
( U N D P ) ,is based on life expectancy at birt h , adult literacy, combined primary,
s e c o n d a ry and tert i a ry education enrolment and adjusted real GDP per cap i t a .
It should be noted howeve r, that the ranking is based on 1994 figure s .
Sectoral Descriptions
The main sectoral contributors to GDP we re the fo l l owing in
1 9 9 7 : s e rvices 44 perc e n t , s e c o n d a ry sector 43.2 perc e n t , a n d
a g r i c u l t u re 12.7 perc e n t .
A g r i c u l t u re remains the backbone of the economy and the
agricultural sector absorbs over 80 percent of the labour fo rc e.
The main crops are maize, sorghum and wheat. Lesotho is
h owever exporting fresh and canned asparagus to Euro p e.
L i vestock keeping is a substantial contributor to rural income.
Much of Lesotho’s terrain is suited to animal pro d u c t i o n ,
although the sector has suffe red from drought in recent ye a r s .
Wool and mohair are the major exports of this sector. T h e
gove r n m e n t ’s main agricultural policy is to move from a fo o d
self-sufficiency strategy to one of food security, and an
i nvestment programme to this effect is being finalised.
The government has also introduced a tree-planting pro g r a m m e
which aims to increase land conservation and fo re s t ry. A ro u n d
0.2 percent of the total area under arable production is planted
with tre e s , m a i n ly eucalyptus and pine which provides fuel
wo o d .
Lesotho is sparsely endowed with natural re s o u rc e s ,the main
t wo being the hy d roelectric potential of its rive r s ,and diamonds.
One of the largest civil engineering projects in A f r i c a , t h e
Lesotho Highlands Water Project (LHWP), is curre n t ly
u n d e r w ay, its purpose being to harness and export surplus
water to South A f r i c a . Lesotho is already receiving roy a l t i e s
f rom the sale of the water.
T h e re has been a decline in the volume of exports of diamonds
since 1983, due to the closure of the main diamond mine. P l a n s
to rev i ve the diamond industry have not yet been implemented.
Large deposits of clay have also been mined for brick
m a nu f a c t u r i n g ,and for the manu f a c t u re of ceramic ware and
t i l e s .Building and construction activity has increased significantly
since 1986 and the upward trend is now decelerating after
completion of phase 1 A of the LHWP, w h i c h ,in addition to the
building of the project itself, also re q u i red much upgrading in
s u rrounding infrastructure. Despite the country ’s rugged
t e rr a i n ,the overall policy of government is to facilitate access to
isolated are a s .
The programme of industrialisation through private enterprise
has seen significant growth in the manufacturing sector. T h e
main activities in this sector are clothing and fo o t wear fo r
e x p o rt ,d eveloped through direct fo reign investment from South
A f r i c a , East A s i a , Mauritius and Euro p e. Other export go o d s
include bricks, ceramic tiles, h a n d i c r a f t s ,f u r n i t u re and tap e s t r i e s .
Companies producing for import substitution are in the areas of
b r i c k - m a k i n g ,c a n d l e s ,beer and beve r a g e s ,canned fo o d , b re a d
and milled pro d u c t s .
L e s o t h o ’s tourism strategy is aimed at those who enjoy outdoor
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