Lesotho is a small landlocked country, completely surrounded by the Republic of South Africa. W It has a population of about two million. At 30,00sqkm Lesotho’s highlands constitute two-thirds of territory; less than 10% of which is suitable for cultivation.
Lesotho became independent in 1966. As a constitutional monarchy, Lesotho is ruled by a king and governed by a 33-member Senate and a 120-member National Assembly. In mid-2015, the coalition government faced its greatest political challenge since its formation in June 2012, as disagreements amongst key coalition partners led to the suspension of parliament by the Prime Minister, thereby raising concerns about the ability of government to manage the legislative agenda to support its economic programs. The Southern African Development Community (SADC) led peace mediation efforts, which resulted in general elections in February 2015.
The results of the February 2015 election brought in a seven party coalition government, which controls 65 seats out of 120 parliamentary seats.
Gross domestic product (GDP) growth is projected at 2.6%, driven primarily by mining production, construction and government services.
Unemployment stood at 24% in 2008 and is unlikely to have changed much, even as underemployment and low productivity employment is widespread, especially in rural areas. Recent unemployment data is not yet available. Preliminary government estimates based on the 2010/11 Household Budget Survey show that the national poverty head count rate stood at 57.1% and the Gini Coefficient based on consumption stood at about 0.53. Poverty has decreased in urban areas, while poverty has increased in rural areas.
The fiscal situation continues to deteriorate. Driven by public spending increases, the non-SACU) fiscal deficit increased from 25.2% of GDP in FY2012/13 to 29.9% of GDP in FY2013/14. In FY2014/15, the non-SACU fiscal deficit is projected to decline to 27% of GDP, largely because of low public capital spending.
The country finds itself at a crossroads requiring new growth engines, a more streamlined role for the state, and a dynamic private sector to seize opportunities in the Southern African market. Public spending grew from 45% of GDP in FY2004-05 to about 63% in FY2011-12, one of the highest ratios in the world. This level is unsustainable, and public spending can no longer be relied upon to drive growth.
The Lesotho government regards HIV/AIDS as one of its most important development issues, and the government is addressing the pandemic through its HIV/AIDS National Strategic Plan (NSP). Lesotho has the third highest HIV rate among adults in the world, at 23.6%. Life expectancy at birth has declined by more than 20 years to 41 years over the past decade. In 2011, annual new infections were estimated at 17,500.
Development Strategy: Lesotho’s vision
The Lesotho government’s development goals are reflected in its “Vision 2020” and the National Strategic Development Plan (NSDP) approved in March 2012
Last Updated: Oct 07, 2015