TRALAC - Trade Law Centre

Lesotho's Growth to Lag Rest of Africa

Monday, 11 July 2005

Source: Business Report (South Africa)

Lesotho's economic outlook is expected to lag behind world and African averages, according to Standard Bank economist Jan Duvenage's mid-year gauge of the country's economy.

IMF forecasts expect the economy to grow by 2.4 percent this year and 3 percent in 2006, compared to African averages of 5 percent and 5.4 percent for the same years.

Duvenage says growth constraints include food insecurity, soil degradation, lower agricultural efficiency and a high HIV and Aids infection rate.

Present growth has been sustained by clothing and textile manufacturing exports through the US African Growth and Opportunity Act (Agoa). The US is Lesotho's largest export destination.

However, "growth declined noticeably in the second half of 2004 because of the negative impact of uncertainties in the textile industry," according to Duvenage.

Manufacturing accounts for 21 percent of gross domestic product (GDP).

Duvenage reports that the country's trade balance was boosted by its export performance under Agoa, with the export of textiles and apparel exported under the Act amounting to $456 million in 2004.

This growth in exports has created an estimated 28 000 jobs in the sector, according to the Standard Bank Report.

The Lesotho loti is pegged at par with the South African rand, and weakened against the US dollar during April into June, the report says. The May average exchange rate was LSL6.74/USD.

The report says Lesotho's inflation rate is expected to average 5 percent in 2005. It notes that as Lesotho sources most of its imports from South Africa, relatively low inflation in that country will help contain price pressure.

No further interest rate changes are expected over the next few months in Lesotho, the report concludes.



“AGOA Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Lesotho’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.