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Economy of Lesotho

Lesotho's economy is based on water and electricity sold to South Africa, manufacturing, earnings from the Southern African Customs Union (SACU), agriculture, livestock, and to some extent earnings of laborers employed in South Africa. Lesotho also exports diamonds, wool, and mohair. Lesotho is geographically surrounded by South Africa and economically integrated with it as well. The western lowlands form the main agricultural zone. The majority of households subsist on farming or migrant labor, and almost 50% of the population earns some income through crop cultivation or animal husbandry. In 2008, agriculture accounted for an estimated 4.7% of GDP. Water is Lesotho's only significant natural resource. It is being exploited through the 30-year, multi-billion-dollar Lesotho Highlands Water Project (LHWP), which was initiated in 1986. The LHWP is designed to capture, store, and transfer water from the Orange River system and send it 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 $24 million annually from the sale of electricity and water to South Africa. The World Bank, African Development Bank, European Investment Bank, and many other bilateral donors financed the project. Lesotho has taken advantage of the African Growth and Opportunity Act (AGOA) to become the largest exporter of garments to the U.S. from sub-Saharan Africa. Exports totaled $437 million in 2007. Employment reached 40,000. Asian investors own most factories. Lesotho has received economic aid from a variety of sources, including the United States, the World Bank, Ireland, the United Kingdom, the European Union, Germany, and the People's Republic of China. Lesotho has nearly 6,000 kilometers of unpaved and modern all-weather roads. There is a short rail line (freight) linking the capital city of Maseru with Bloemfontein, South Africa that is owned and operated by South Africa (the half-mile trunk inside Lesotho is operated by Lesotho Flour Mills, Ltd.). Lesotho is a member of the Southern African Customs Union (SACU) in which tariffs have been eliminated on the trade of goods with other member countries, which include Botswana, Namibia, South Africa, and Swaziland. With the exception of Botswana, these countries also form a common currency and exchange control area known as the Common Monetary Area (CMA). The South African rand can be used interchangeably with the loti, the Lesotho currency (plural: maloti). One hundred lisente equal one loti. The loti is at par with the rand. GDP (2009): $1.3 billion. Annual growth rate (2009 estimate): 1.1%. Per capita GDP (2008 est.): $1,600. Average inflation rate (2008): 10.8%. Natural resources: Water, agricultural and grazing land, some diamonds and other minerals. Lesotho is an exporter of excess labor. Agriculture (2008 est.): 4.7% of GDP. Products--corn, wheat, sorghum, barley, peas, beans, asparagus, wool, mohair, livestock. Arable land--11%. Industry (2008 est.): 46.7% of GDP. Types--apparel, food, beverages, handicrafts, construction, tourism. Trade (2008): Exports--$1.06 billion; clothing, furniture, footwear and wool. Partners--South Africa, United States, Botswana, Swaziland, Namibia, EU. Imports--$1.339 billion; corn, clothing, building materials, vehicles, machinery, medicines, petroleum products. Partners--South Africa, Asia, EU. Fiscal year: April 1 - March 31. Economic aid received (2008): $306 million. Primary donors--U.S., World Bank, IMF, EU, UN, U.K., and Ireland.

Geography of Lesotho

Location: Southern Africa, an enclave of South Africa Geographic coordinates: 29 30 S, 28 30 E Map references: Africa Area: total: 30,355 sq km land: 30,355 sq km water: 0 sq km Area - comparative: slightly smaller than Maryland Land boundaries: total: 909 km border countries: South Africa 909 km Coastline: 0 km (landlocked) Maritime claims: none (landlocked) Climate: temperate; cool to cold, dry winters; hot, wet summers Terrain: mostly highland with plateaus, hills, and mountains Elevation extremes: lowest point: junction of the Orange and Makhaleng Rivers 1,400 m highest point: Thabana Ntlenyana 3,482 m Natural resources: water, agricultural and grazing land, some diamonds and other minerals Land use: arable land: 11% permanent crops: 0% permanent pastures: 66% forests and woodland: 0% other: 23% (1993 est.) Irrigated land: 30 sq km (1993 est.) Natural hazards: periodic droughts Environment - current issues: population pressure forcing settlement in marginal areas results in overgrazing, severe soil erosion, and soil exhaustion; desertification; Highlands Water Project controls, stores, and redirects water to South Africa Environment - international agreements: party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Hazardous Wastes, Marine Life Conservation, Ozone Layer Protection signed, but not ratified: Endangered Species, Law of the Sea, Marine Dumping Geography - note: landlocked, completely surrounded by South Africa; mountainous, more than 80% of the country is 1,800 meters above sea level

Government of Lesotho

The Lesotho Government is a constitutional monarchy. The Prime Minister, Pakalitha Mosisili, is head of government and has executive authority. The King serves a largely ceremonial function; he does not actively participate in political initiatives. The Lesotho Congress for Democracy (LCD) controls a majority in the National Assembly (the lower house of parliament), with the Basotho National Party (BNP), Lesotho Peoples Congress, and the National Independent Party among the 9 opposition parties represented. The upper house of parliament, called the Senate, is composed of 22 principal chiefs whose membership is hereditary, and 11 appointees of the King, acting on the advice of the prime minister. The constitution provides for an independent judicial system. The judiciary is made up of the Court of Appeal, the High Court, Magistrate's Courts, and traditional courts that exist predominately in rural areas. All but one of the Justices on the Court of Appeal are South African jurists. There is no trial by jury; rather, judges make rulings alone, or, in the case of criminal trials, with two other judges as observers. The constitution also protects basic civil liberties, including freedom of speech, association, and the press; freedom of peaceful assembly; and freedom of religion. For administrative purposes, Lesotho is divided into 10 districts, each headed by a district administrator. Lesotho held its first post-independence local government elections in 2005 using a quota system that reserved one-third of electoral divisions for women candidates. In these elections, 53% of the victorious candidates were women. Locally elected officials attended post-election training while regulations for local governance were drawn up by the National Assembly and infrastructure was created.
Principal Government Officials
Head of State--King Letsie III Cabinet Prime Minister--Pakalitha Mosisili Deputy Prime Minister and Minister of Home Affairs and Public Safety--Archibald Lesao Lehohla Minister of Defense--Pakalitha Mosisili (also Prime Minister) Minister of Foreign Affairs--Mohlabi Kenneth Tsekoa, MP Minister of Education and Training--Dr. Mamphono Khaketla Minister of Natural Resources--Monyane Moleleki, MP Minister of Local Government--Pontso Sekatle Minister of Justice, Human Rights and Rehabilitation, Law and Constitutional Affairs--Mpeo Mahase-Moiloa, MP Minister of Finance and Development Planning--Timothy Thahane Minister of Tourism, Environment, and Culture--Lebohang Ntsinyi Minister of Public Service--Semano Sekatle Minister of Trade and Industry, Cooperatives, and Marketing--Mpho 'Mali Malie Minister of Communications, Science, and Technology--Mothojoa Metsing, MP Minister of Health and Social Welfare--Dr. Mphu Ramatlapeng, Senator Minister of Employment and Labor--Moses Refiloe Masemene Minister of Agriculture and Food Security--Lesole Mokoma, MP Minister of Gender, Youth, Sports, and Recreation--Mathabiso Lepono Minister in the Prime Minister's Office--Dr. Motloheloa Phooko, Senator Minister of Public Works and Transportation--Ts'ele Chakela Assistant Minister of Trade and Industry, Cooperatives, and Marketing--Khotso Matla Assistant Minister of Education and Training--Malijane Norah Maqelepo Assistant Minister of Agriculture and Food Security--Ramootsi Mokone Lehata Assistant Minister of Sports, Gender, and Youth Affairs--vacant Assistant Minister of Home Affairs--Lineo Irene Molise Assistant Minister of Labor and Employment--Matanki Mariam Mokhabi Ambassador to the United States--David Mohlomi Rantekoa Permanent Representative and Ambassador to the United Nations--Motlatsi Ramafole Lesotho maintains an embassy in the United States at 2511 Massachusetts Avenue NW, Washington, DC 20008 (tel: 202-797-5533). Lesotho's mission to the United Nations is located at 204 East 39th Street, New York, NY 10016 (tel: 212-661-1690) Type: Constitutional monarchy. Constitution: April 2, 1993. Independence: October 4, 1966. Branches: Executive--monarch is head of state; prime minister is head of government and cabinet. Legislative--Bicameral parliament consists of elected Assembly and non-elected Senate. Judicial--High Court, Court of Appeals, Magistrate's Court, traditional and customary courts. Administrative subdivisions: 10 districts. Political parties: Lesotho Congress for Democracy (LCD), Basotho National Party (BNP), Lesotho Peoples Congress (LPC), National Independent Party (NIP), Basutoland African Congress (BAC), Basutoland Congress Party (BCP), Lesotho Workers Party (LWP), Popular Front for Democracy (PFD), Marematlou Freedom Party (MFP), Christian Democratic Party (DCP), Kopanang Basotho Party (KBP), National Progressive Party (NPP), New Lesotho’s Freedom Party (NLFP), Sefate Democratic Union (SDU), Social Democratic Party (SDP), United Party (UP). Suffrage: 18 years of age. Central government budget (FY 2003-2004 est.): Revenues--$560 million. Expenditures--$599 million.

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History of Lesotho

Lesotho gained independence from Britain on October 4, 1966. In January 1970 the ruling Basotho National Party (BNP) appeared set to lose the first post-independence general elections when Prime Minister Leabua Jonathan annulled the election. He refused to cede power to the Basotho Congress Party (BCP) and imprisoned its leadership. The BNP ruled by decree until January 1986 when a military coup forced them out of office. The Military Council that came into power granted executive powers to King Moshoeshoe II, who was until then a ceremonial monarch. In 1987, however, the King was forced into exile after a falling out with the army. His son was installed as King Letsie III. The chairman of the military junta, Major General Metsing Lekhanya, was ousted in 1991 and then replaced by Major General Phisoane Ramaema, who handed over power to a democratically elected government of the BCP in 1993. Moshoeshoe II returned from exile in 1992 as an ordinary citizen. After the return to democratic government, King Letsie III tried unsuccessfully to persuade the BCP government to reinstate his father (Moshoeshoe II) as head of state. In August 1994, Letsie III staged a coup which was backed by the military and deposed the BCP government. The new government did not receive full international recognition. Member states of the Southern African Development Community (SADC) engaged in negotiations aimed at the reinstatement of the BCP government. One of the conditions put forward by the King for the return of the BCP government was that his father should be re-installed as head of state. After protracted negotiations, the BCP government was reinstated and the King abdicated in favor of his father in 1995, but Moshoeshoe II died in a car accident in 1996 and was again succeeded by his son, Letsie III. The ruling BCP split over leadership disputes in 1997. Prime Minister Ntsu Mokhehle formed a new party, the Lesotho Congress for Democracy (LCD), and was followed by a majority of Members of Parliament, which enabled him to form a new government. The LCD won the general elections in 1998 under the leadership of Pakalitha Mosisili, who had succeeded Mokhehle as party leader. Despite the elections being pronounced free and fair by local and international observers and a subsequent special commission appointed by SADC, the opposition political parties rejected the results. Opposition protests in the country intensified, culminating in a violent demonstration outside the royal palace in August 1998. When junior members of the armed services mutinied in September, the government requested a SADC task force to intervene to prevent a coup and restore stability. A military group of South African and Botswana troops entered the country in September, put down the mutiny, and withdrew in May 1999. Looting, casualties, and widespread destruction of property followed. An Interim Political Authority (IPA), charged with reviewing the electoral structure in the country, was created in December 1998. The IPA devised a proportional electoral system to ensure that there would be opposition in the National Assembly. The new system retained the existing 80 elected Assembly seats, but added 40 seats to be filled on a proportional basis. Elections were held under this new system in May 2002, and the LCD won again. For the first time, due to the inclusion of proportional seats, opposition political parties won significant numbers of seats. Elections were held again in February 2007. Nine parties hold all 40 of the proportional seats, with the governing party-aligned National Independent Party (NIP) having the largest share (21). The LCD has 62 of the 80 constituency-based seats, and All Basotho Congress (ABC) holds 17.

People of Lesotho

More than 99% of Lesotho's population is ethnically Basotho; other ethnic groups include Europeans, Asians, and Xhosa. The country's population is 80% Christian, the majority of whom are Roman Catholic. Other religions are Islam, Hindu, and indigenous beliefs. Sesotho and English are official languages, and other languages spoken include Xhosa. Nationality: Noun--Mosotho (sing.); Basotho (pl.). Adjective--Basotho. Population (2009 est.): 1.88 million. Annual growth rate (2009 est.): 0.116%. (Note: the population growth rate is depressed by an HIV/AIDS prevalence rate estimated to be at approximately 23.2%.) Ethnic groups: Basotho 99.7%; Europeans, Asians, and other (including Xhosa) 0.3%. Religions: 90% Christian, including Roman Catholic (majority), Lesotho Evangelical, Anglican, other denominations; other religions include Islam, Hindu, indigenous. Languages: Official--Sesotho and English. Other--Xhosa, Zulu. Education: Years compulsory--None. Literacy (2003 est.)--84.8%. Lesotho has free primary education (grades 1-7). Health: Infant mortality rate (2009 est.)--77.4/1,000. Life expectancy (2009 est.)--40.38 years. Work force (2001 est.): 704,000.