WELCOME TO LESOTHO
Lesotho, is a country which borders South Africa which is also surrounded by Zimbabwe, Namibia, Botswana, Swaziland and Mozambique. Lesotho is just over 30,000 km2 (11,583 sq mi) and has a population of around 2 million. Its capital and largest city is Maseru, and the official language is Sesotho.
Lesotho was previously the British Colony of Basutoland, but it declared independence from the United Kingdom on 4 October 1966. It is now a fully sovereign state and is a member of the United Nations, the Commonwealth of nations, the African Union, and the Southern African Development Community (SADC). The name Lesotho roughly translates to “the land of the people who speak Sesotho.
Lesotho’s geographic location makes it extremely vulnerable to political and economic developments in South Africa. It is a member of many regional economic organisations, including the Southern African Development Community (SADC), and the Southern African Customs Union (SACU). It is also active in the United Nations (UN), the African Union (AU), the Non-Aligned Movement, the Commonwealth, and many other international organisations
Economic Development
Lesotho is geographically surrounded by South Africa and economically integrated with it. Lesotho is highly depend on agriculture, livestock, manufacturing and mining, and depends heavily on inflows of workers’ remittances and receipts from the Southern African Customs Union (SACU). The majority of households subsist on farming
Additionally, the country has taken advantage of the African Growth and Opportunity Act (AGOA) to become the largest exporter of garments to the US from sub-Saharan Africa. US brands and retailers sourcing from Lesotho include: Foot Locker, Gap, Gloria Vanderbilt, JCPenney, Levi Strauss, Saks, Sears, Timberland and Wal-Mart. Research has shown that in mid-2004 its employment reached over 50,000, mainly female workers. This made the first time that manufacturing sector workers outnumbered government employees. Furthermore, research has also shown that in 2008 it exported goods worth 487 million dollars mainly to the US. Since 2004, employment in the sector has dwindled to about 45,000 in mid-2011 due to international competition in the garment sector. It was the largest formal sector employer in Lesotho in 2011. On the other hand, in 2007, the average earnings of an employee in the textile sector were US$103 per month, and the official minimum wage for a general textile worker was US$93 per month. The average gross national income per capita in 2008 was US$83 per month. The sector initiated a major program to fight HIV/AIDS called Apparel Lesotho Alliance to Fight AIDS (ALAFA). It is an industry-wide program providing disease prevention and treatment for workers.
Water and diamonds are Lesotho’s significant natural resources. Water is used through the 21-year, multibillion-dollar Lesotho Highlands Water Project (LHWP), under the authority of the Lesotho Highlands Development Authority. The project commenced in 1986. The LHWP is designed to capture, store, and transfer water from the Orange River system to South Africa’s Free State and greater Johannesburg area, which features a large concentration of South African industry, population, and agriculture. Completion of the first phase of the project has made Lesotho almost completely self-sufficient in the production of electricity and generated approximately US$70 million in 2010 from the sale of electricity and water to South Africa. The World Back, African development Bank, European Ban, and many other bilateral donors financed the project.
Unemployment as the Most Important Problem for Lesotho
The Afrobarometer survey measures people’s opinion on what they see as the most important problems facing their country that government should address. Respondents were asked to mention up to three responses.
From seven Southern African countries, unemployment was singled out as the most serious problem that requires government`s intervention. Lesotho comes fourth in the region, with South Africa having the highest proportion of respondents who mentioned unemployment as a serious challenge to people`s lives. Clearly, the finding sends a strong message to the governments of the countries concerned that unemployment calls for urgent attention and needs to be addressed.
Whose Problem Is Unemployment?
Unemployment was named the biggest problem by more among the youngest respondents (18 to 35-year olds) than among other age groups (36 through 50 and 51+), though the biggest increase since 2008, 15 percentage points, was among people 51 and older. The survey also found that urban residents are more affected by unemployment than are their rural counterparts.
Development Challenges and Risks
COVID–19 poses some challenges to global health systems as well as social and economic prospects at large. This has spillover effects onto Lesotho by way of slower economic activities and risks to vulnerable people.
Lesotho’s economy is significantly open to global trade.COVID-19 is expected to impact supply chains, thus hampering trade, as most textiles and apparel firms in Lesotho source raw materials from China, which is the epicenter of the COVID-19. Furthermore, commodity exports to major economies such as Euro Area and the United States are most likely to be negatively affected. The tourism sector is also expected to be negatively affected by the advent of COVID-19.
High HIV/AIDS prevalence and tuberculosis remain Lesotho’s greatest health challenge. The HIV prevalence rate in Lesotho is 25% percent in the adult population (15-49 years), the second highest in the world. The incidence of TB stands at 611 cases per 100,000, according to the World Health Organization’s Global TB report 2019. While high health costs exert more pressure to the fiscal burden, high HIV/AIDS and TB rates continue to contribute to persistently high inequality and poverty.
MASERU, December 18, 2019
While Lesotho’s poverty rate is lower today than it was 15 years ago, poverty and inequality remain persistently high, according to a recently released Poverty Assessment produced jointly by the World Bank and the Lesotho Bureau of Statistics.
The Lesotho Poverty Assessment: Progress and Challenges in Reducing Poverty, finds that the poverty rate in Lesotho fell from 56.6% to 49.7% between 2002 and 2017, driven by a reduction in inequality as a result of the expansion of the country’s social protection programs and an increase in wage incomes among the poor. However, poverty is still widespread and economic vulnerability persists with more than 75% of the population either poor or vulnerable to poverty.
“We welcome this report which provides us with the necessary research to inform policies to improve the lives of Basotho,” said Hon. Tlohelang Aumane, Lesotho Minister of Development Planning. “Both poverty and inequality have decreased in Lesotho but much more can be done to improve access to basic public services especially in the rural areas, where most of poor people live.”
Urban areas experienced a 13-percentage point reduction in poverty from 41.5% to 28.5%, while in rural areas, poverty decreased marginally from 61.3% to 60.7%. Poverty increased in the Rural Highlands to 67.8% in 2017, an increase of 10.9 percentage points from 56.9% in 2002. It also increased in the Rural Senqu River Valley.
This assessment shows that between 2002 to 2017, urban areas experienced greater poverty reduction following improvements in education and increases in incomes from well-paying jobs largely in the services sector. During the same period, poverty in rural areas stagnated due to slow growth in agricultural incomes, a fall in remittances, which serve as a buffer when weather shocks occur, and vulnerability of the rural population to such shocks.
Poverty remains highly concentrated in rural areas where four out five of poor citizens live. According to the 2016 census, 66% of Lesotho’s two-million population lives in rural areas where agriculture plays a major role in livelihoods. Key challenges in the agriculture sector include climate change and environmental shocks. In 2015- 2016, Lesotho endured historically low rainfall, without which, the pace of national poverty reduction would have nearly doubled, based on a simulation done in this study.
The report also shows that despite the growing urban-rural poverty divide, inequality fell as a result of expansion of Lesotho’s social protection programs and an increase in wage incomes among the poor. Lesotho is now more equal than its neighbors, but with a Gini coefficient* of 44.6, it remains one of the 20% most unequal countries in the world.
“We see from this report that improving the livelihoods of Basotho through increasing access to better quality education, addressing high unemployment, increasing agriculture productivity and building resilience to climatic shocks would further reduce poverty,” said Marie Francoise Marie-Nelly, World Bank Country Director for Lesotho, Botswana, Eswatini, Namibia and South Africa. “As the World Bank we stand ready to support Lesotho’s efforts to reduce poverty in line with our twin goals of reducing extreme poverty and promoting shared prosperity.”
The report makes several recommendations including:
improving the human capital of the poor through boosting learning in primary education, increasing secondary enrolment and competition among the poor and improving efficiency of spending on education
improving the business environment, access to finance, and facilitating labour mobility, and argues that targeted policies that boost entrepreneurship and promote skills are key to addressing high unemployment
improving harmonization and synchronization of Lesotho’s already extensive social protection programs, strengthening inter-agency collaboration and improving program delivery to build resilience and reduce exposure to shocks
transitioning from subsistence to commercial agriculture in the lowlands and the foothills, increasing use of productivity-enhancing agricultural inputs and strengthening linkages between farmers and buyers as well as creating a resilient landscape in the highlands
Building resilience against shocks could be achieved through responsive social protection and reducing exposure to shocks, the report notes. Sustainable interventions that are important for risk mitigation include land management practices, protection of forests and woodlands, irrigation and improved management of water resources.
Conclusion
According to research that FOBDA conducted, Lesotho is an amazing country with a large number of youths who can develop the country economically. As a business development organisation, FOBDA sees the need to create jobs for youths in Lesotho. In fact, absence of jobs drives the Basotho people to South Africa for employment. Research has shown that job creation in Lesotho is still a challenge. However, the government is more optimistic to improve the challenge of unemployment in the next five years. The current government sees this propaganda as both an endorsement and a challenge.
Sources:
https://www.worldatlas.com/articles/which-countries-border-lesotho.html
https://www.statista.com/statistics/448024/unemployment-rate-in-lesotho/
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