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