Basotho's economy

Hi Guys!

Today, I will speak about the Economy of one of my favorite countries.

Lesotho's economy is based on agriculture, livestock and manufacturing; in other words, the economy is still primary, based on subsistence focus in agricultural and livestock products. Nevertheless, the main part of Basothos work like miners, farmers, other primary jobs and in the industrial sector.

The most important natural resource of Lesotho is the water, for this reason and because the country is surrounded by South Africa, there is an important project, called Lesotho Highlands Water Project (LHWP) to supply water to South Africa. The LHWP is designed to take the water from Orange River (the most important river of Lesotho) and transfer the water to the neighbour country. In this project, Lesotho should be self-sufficient in the production of electricity and gain income from the electricity sales to South Africa. The main important organism who participate on this project are: World Bank, African Development Bank, European Investment Bank and other bilateral associations.

From 1992 to 1998, the Basotho economy had grown constantly, but, in September 1998, due to the riots, the main part of the commercial infrastructures were destroyed. This accident had a disastrous effect in its economy, for this reason, with the support of the IMF Structural Adjustment Programs and international organisms, the Basotho economy starts growing again.















Nowadays, Lesotho has some problems because some of the country companies have a lot of international competitors, for example a lot of Chinese Companies. Some of them are establishing their industries in the country. For this reason, it has some problems to develop the national industry. Another inconvenient of Lesotho is the distribution, there are not a lot of pavemented roads and rail ways. But, the tourism business is being increased because Lesotho is the main destine of South African people, for example for skying, climbing, etc.

Lesotho is a Southern African Customs Union (SACU) member, in which duties have been eliminated between the member countries (Botswana, Namibia, South Africa, Lesotho and Swaziland). This area (except Botswana) is known as the Rand Monetary Area, they use the rand like the common currency, nevertheless, Lesotho has an own currency called loti (plural: maloti). This currency is at par with the South African currency (Rand).

The main companies of the ancient Basotholand are:

• Comnet Lesotho
• Golden Hotel
• LEO (Pty) Ltd
• Quadrant Computers
• Telecom Lesotho
• Nedbank Lesotho Limited