Lesotho comprises a tiny landlocked country that occupies 30,588km2
which is inhabited by an almost
homogeneous ethnic group. The country is divided into 4 ecological zones: the lowlands (17%), the
foothills (15%), the mountains (59%), and the Senqu River Valley (9%). Because of the country=s
topography, economic activities are largely confined to the lowlands, the foothills, and the Senqu River
Valley, leaving the mountain region only suitable for grazing and, in recent years, for water and hydropower
development. The country is not only resource-poor but is facing dangerous levels of environmental
degradation, severe soil erosion, and progressive desertification. Lesotho also experiences very harsh
climatic conditions that limit agricultural activities in a sector that supports the majority of the population.
The 1996 census put the population of Lesotho at 1,959,700 people. After dropping from 2.6% in the
period 1976-86 to 2% in the period 1986-96, the country=s population growth rate is still considered too
high for available resources. The country is still highly dependent on migrant workers= remittances from
the Republic of South Africa (RSA), on regional customs union earnings, and on development cooperation
resources.
Despite significant progress in the country=s macro-economic performance over the past few years,
Lesotho still faces an uphill battle against poverty. Unemployment is still estimated at 30-35%, while 50%
of the households are still classified as poor and 25% ultra-poor. There has also been a gradual decline in
factor incomes from abroad in recent years as the employment of migrant workers in the RSA declines,
mainly due to employment problems in the latter.
Since 83% of the households in Lesotho live in rural areas and 70% derive all or part of their livelihood
from agriculture, the contribution of the latter sector is of critical importance in the determination of socioeconomic
conditions in the country. However, Lesotho=s limited natural resource base, together with a
mountainous topography, limited arable land, unreliable climate, and severe soil erosion, are constraining
the agricultural sector to generate adequate levels of employment and incomes to support the country=s
rapidly increasing population. This pervasive constraint, together with constraints facing domestic
employment creation in other economic sectors, places severe limitations on efforts towards the realization
of national objectives.