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Global 21 fourth quarter 2015

Spotlight Lesotho Ups and downs of a mountain economy Despite having a flourishing diamond mining industry, many of Lesotho’s citizens live in poverty in isolated rural communities as subsistence farmers Amber Tript Letšeng mine, in Lesotho’s Maluti Mountains, is the source of some of the world’s finest diamonds Some of the most valuable diamonds in the world have been found in Lesotho. But diamond mining forms only a small part of this mountainous nation’s GDP. Most of its rural population – the majority of people in Lesotho – live in poverty, relying on subsistence farming, remittances sent home by relatives working in South Africa and supplementary income, where available, from labouring or tourism. Moreover, the country has one of the world’s highest HIV infection rates, which sees many people of working age dying prematurely. The economy is closely linked with that of Lesotho’s much bigger and more economically developed neighbour, South Africa. Many Basotho, particularly young males, work in South Africa and most of the government’s income comes from Southern African Customs Union import tariffs. Economic swings in South Africa are the biggest single influence on Lesotho’s economy. Measures to diversify the economy have included encouragement of manufacturing, particularly of clothing, textiles, leather goods and footwear, and of tourism, including establishment of a ski resort in the Drakensberg. But the manufacturing sector’s contribution to GDP fell from 22 per cent in 2006 to 12 per cent in 2012. With the support of the International Monetary Fund, economic policy has focused on investment in education, development of the private sector and more effective revenue collection. Deposits of coal, quartz, agate, galena and uranium have been identified in Lesotho but are not yet commercially viable. four 22 l www.global -br ief ing.org th quar ter 2015 global


Global 21 fourth quarter 2015
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