Lesotho: Lesotho Outlook for 2013-14

The country (Lesotho) is situated in Southern Africa, an enclave of South Africa. It has borders with South Africa for 909km.
Land in Lesotho is mostly highland with plateaus, hills, and mountains. Basotho land covers an area of 30355 km².

The climate is cool to cold, dry winters; hot, wet summers. Mosotho (singular), Basotho (plural) speak Sesotho (southern Sotho), English (official), Zulu, Xhosa.

Outlook for 2013-14

• Political stability has been supported by the smooth transfer of power in June 2012 from the long-serving former prime minister, Pakalitha Mosisili, to Thomas Thabane, the leader of the All Basotho Convention (ABC).
• The ruling coalition made up of the ABC, the Lesotho Congress for Democracy (LCD) and the Basotho National Party (BNP) is the initial of its kind in Lesotho, and there is some uncertainty about how it will fare.
• The likelihood of a additional left-wing or nationalist schedule has increased following the transfer of power, but radical changes are unlikely and a broadly technocratic approach to economic policy is likely to be maintained.
• Real GDP increase is estimate at 5.9% in 2013 as the second phase of the Lesotho Highlands Water Project begins, and at 5.3% in 2014 as mining performs well but manufacturing and agriculture record weak increase.
• Inflation is estimate at 4.7% in 2013 and 5% in 2014, driven by trends in South Africa (the major source of Lesotho\'s imports) and world oil prices.
• The current-account deficit is estimate at 21.2% of GDP in 2013 and 19% of GDP in 2014, owing to continued weak increase in textile exports and strong request for imports of capital goods. Financing difficulties are not expected.

Review

• Following its initial 100 days in power there is still considerable goodwill between the three members of the coalition government, although there has still not been any agreement on a common policy programme.
• The Democratic Congress (DC) has nominated its deputy leader Monyane Moleleki as the leader of the opposition in parliament.
• This suggests that Mr Mosisili, the former prime minister and the DC\'s leader, is finally ready to begin his withdrawal from frontline politics.
• The wage dispute in the textile sector has continued, with workers calling for wages to be additional than doubled, while employers are only willing to offer increases of around 7%.
• Against this backdrop, by raising the sector\'s minimum wage by 9% the government has entirely sided with employers and departed from its campaign pledge to ensure that textile workers receive a \"living wage\".
• The IMF\'s upbeat review of Lesotho\'s performance under its extended credit facility has represented a vote of confidence in the new government.