Lesotho

Location : Southern Africa. Landlocked; surrounded entirely by South Africa.

Capital : Maseru

Languages : Sesotho (southern Sotho), English (official), Zulu, Xhosa

Area : 30,355 sq km

Land Use : arable land: 10.87%; permanent crops: 0.13%; other: 89% % (2001)

Natural Resources : water, agricultural and grazing land, diamonds, sand, clay, building stone

Population : 1,867,035 (July 2005 est.).

Labour force : 838,000 (2002)

Labour force participation rate : 44.88% of population (2000)

Population below poverty line : 49% (2002 est.)

International Organisation participation : ACP, AFDB, AU, C, FAO, G-77, IBRD, ICAO, ICC, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, Interpol, IOC, ISO (subscriber), ITU, MIGA, NAM, OPCW, SACU, SADC, UN, UNCTAD, UNESCO, UNHCR, UNIDO, UPU, WCO, WFTU, WHO, WIPO, WMO, WToO, WTO

GDP per capita : U$3,200 (2004 est.)

GDP Growth Rate : 4.0% p.a. 1990-2001

GDP sectoral composition : agriculture: 15.2%; industry: 43.9%; services: 40.9% (2004 est.)

Investment (gross fixed): 39.6% of GDP (2004 est.)

Industries: food, beverages, textiles, apparel assembly, handicrafts; construction; tourism 

Industrial production growth rate : 15.5% (1999)

Agriculture - products : livestock, sorghum, maize, millet, beans, sunflowers, groundnuts

Exports : U$484.5 million f.o.b. (2004 est.)

Exports - commodities : manufactures 75% (clothing, footwear, road vehicles), wool and mohair, food and live animals (2000)

Exports - partners : US 96%, Canada 1.5%, Belgium/Luxembourg 1.1% (2004)

Imports : U $730.9 million f.o.b. (2004 est.)

Imports - commodities : food; building materials, vehicles, machinery, medicines, petroleum products (2000)

Imports - partners : Hong Kong 34.2%, Taiwan 33.9%, China 11.2%, Germany 9.2% (2004)

QUALITATIVE TRADE PROFILE

Lesotho 's economy is intertwined with that of South Africa. A large number of Basotho work in South Africa and most of government revenues derive from customs duties from the Southern Africa Customs. However through tax reform, a decline in the number of overseas miners and the construction of a waterpower facility this has slowly changed. A nascent manufacturing sector has begun to take shape based on milling, canning, leather, jute and apparel-assembly activities. Nevertheless the economy is still primarily based on subsistence agriculture, especially livestock, although drought has decreased agricultural activity.

As a member of the Southern Africa Customs Union (SACU) Lesotho's trade policy is regionally determined. Its tariff bindings cover all of its tariff lines. Average applied tariff rates stood at 8% in 2002, with the average for agricultural goods being 8.8% and non-agricultural goods being 7.9 %. A key issue for SACU is the structure of the external tariff which is determined by South Africa and often reflects South Africa's policy priorities and industrial structure. Approximately 45% of tariff lines are duty free on an MFN basis and non-ad valorem rates apply to approximately 5% of tariff lines. In accordance with the revised provisions of the 2002 SACU Agreement, the joint SACU Tariff Board will, in future, determine duty rates, including anti-dumping and countervailing duties. Lesotho does not yet set its own standards and in many cases uses South African standards, while health and sanitary regulations are based mainly on international practices.

At the national level Lesotho's trade and trade-related policies are mainly the responsibility of the Ministry of Trade and Industry, Co-operatives and Marketing. However, other Ministries and agencies are also heavily involved in trade‑related policy making, including the Ministries of Development Planning, Foreign Affairs, Finance, and Agriculture, and the Central Bank. To facilitate regular consultations, the Ministry of Trae has set up a number of forums where all government ministries are represented, including the National WTO Network Forum, which brings together all ministries and departments, as well as the private sector and academic circles, to consider and outline policy on WTO-related matters.

The wider economic community has recently become more widely involved in trade policy making in Lesotho. As part of the Government's poverty reduction strategy, and under the Integrated Framework for Trade-Related Technical Assistance (IF), a National Steering Committee (NSC) was established comprising the Principal Secretaries of the Ministry of Trade, Industry and Marketing, Development Planning, Finance, and Foreign Affairs, and senior representatives of the Lesotho Chamber of Commerce and Industry, the Lesotho Council of NGOs, the Lesotho Manufacturers' Association, Lesotho Association of Exporters, Association of Lesotho Employers, National University of Lesotho, and the United Nations Development Programme. Under the NSC, an IF Task Force has been established, also led by the Ministry of Trade with the participation of Foreign Affairs, Finance, Planning, National University of Lesotho, the Lesotho National Development Corporation (LNDC), Central Bank, and Chamber of Commerce, as well as the UNDP. Under the Task Force, a Trade Sector Working Group for Lesotho's Poverty Reduction Strategy Paper (PRSP) has been established to address pro-poor trade policies and strategies for the PRSP process.

TRADE AGREEMENTS Bilateral

Lesotho is not a signatory to any bilateral preferential trade agreements. However, Lesotho is a beneficiary under the United States' African Growth and Opportunity Act (AGOA) and the European Unions' "Everything but Arms" initiative. Additionally, Lesotho is a beneficiary of the GSP schemes of most other developed markets.

Regional

Lesotho is a member of the SACU, SADC, and the African Union. Through SACU it is currently in the process of negotiating bilaterals with the United States, MERCUSOR and EFTA. Lesotho is currently negotiating an Economic Partnership Agreement with the EU through the SADC configuration.

Multilateral

Lesotho is a member of the WTO and extends at least MFN treatment to all its trading partners. It has GATS commitments in nine service sectors. It is recognized as a least-developed country in the WTO and is a member of the Informal Group of LDCs and of the African and Commonwealth groups in WTO.

NEED PRIORITIES  

Lesotho has identified needs in non-agricultural market access negotiations, trade in services, agriculture, trade and environment, TBT, customs valuation, and TRIPS.

Source: Commonwealth Yearbook 2005, World Fact Book, WTO Secretariat.