Lesotho

A parliamentary constitutional monarchy, the Kingdom of Lesotho is a small, landlocked, and mountainous country entirely surrounded by South Africa. Lesotho’s economy is primarily based on subsistence agriculture, mining, water export, a well-developed textile and clothing industry, and remittances. A burgeoning tourism sector and a well-capitalized banking industry are increasingly relevant employers and drivers of growth. As a member of the Southern African Development Community (SADC), Lesotho has also taken a proactive approach to attracting foreign investment and improving the business environment.

However, the economy continues to face numerous challenges. The government’s excessive involvement in economic activities hinders private sector development and stifles innovation. The country’s over-reliance on South Africa for electricity and the United States for textile exports exacerbates its economic vulnerability, while agriculture is susceptible to climate-related disasters. Furthermore, poverty, unemployment and high crime rates persist, limiting the country’s economic growth potential.