Lesotho: 4 ways to boost growth and stability

This briefing by the South African Institute of International Affairs outlines four strategic priorities for the government of Lesotho under Tom Thabane to ensure stability and economic growth, focusing on agricultural diversification, revenue independence, human rights compliance for US trade access, and labor upskilling.

• Lesotho's economy is heavily dependent on South Africa for trade and the Southern African Customs Union (SACU) for fiscal income, with SACU providing approximately 37% of its fiscal revenue. However, income from the SACU revenue pool has been steadily declining.
• To diversify exports beyond clothing (40%) and diamonds (22%), Lesotho should develop its Fresh Fruit and Vegetable (FFV) sector. This requires organizing farmers for export, upscaling production, and passing the Standards Bill to establish a Bureau of Standards for product certification.
• The textile industry, which exported over US$330 million to the US in 2015 and employs roughly 44,000 people (mostly women), relies on the African Growth and Opportunity Act (AGOA). Eligibility for these benefits until 2025 is threatened by a declining human rights record and the failure to implement Southern African Development Community Commission of Enquiry recommendations.
• With AGOA set to expire in 2025, there is a risk that textile factories may close. The government needs to upskill female laborers from repetitive machinist roles into managerial and design positions to protect them from automation and prepare for a future without preferential US market access.
• Lesotho faces significant revenue losses from illicit financial outflows and poor tax collection, estimated by a 2017 UNU-Wider working paper to be approximately US$20 million, or just under 1% of GDP.

APA

South African Institute of International Affairs (2017). Lesotho: 4 ways to boost growth and stability. https://saiia.org.za/research/lesotho-4-ways-to-boost-growth-stability/

Chicago

South African Institute of International Affairs. Lesotho: 4 ways to boost growth and stability. 2017. https://saiia.org.za/research/lesotho-4-ways-to-boost-growth-stability/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Lesotho: 4 ways to boost growth and stability |date=23 June 2017 |url=https://saiia.org.za/research/lesotho-4-ways-to-boost-growth-stability/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2017lesotho, author = {{South African Institute of International Affairs}}, title = {{Lesotho: 4 ways to boost growth and stability}}, institution = {South African Institute of International Affairs}, year = {2017}, month = jun, url = {https://saiia.org.za/research/lesotho-4-ways-to-boost-growth-stability/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }