Inflation in Lesotho rose slightly in 2012 to 6.7% and went down to 5% in 2013. Inflationary pressures continued to build up during the second quarter of 2014, with consumer inflation reaching a peak of 6.7 per cent in May 2014 and moderating slightly to 6.5 per cent in June. It was initially forecast to average 4.9% in 2014, but has been revised to 6.6% over the medium term.
The banking system in Lesotho comprises of 3 commercial banks (Standard-Lesotho Bank, NEDBANK and First National Bank), the Central Bank and some financial institutions. Commercial banks provide credit to businesses at competitive rates. Government and development institutions such as LNDC have signed partial credit guarantee scheme with banks to facilitate ease of access to finance.
The May 2014 Fitch Ratings report has affirmed Lesotho's long-term foreign and local currency Issuer Default Ratings (IDRs) at 'BB-' and 'BB' respectively. The outlooks on the long-term IDRs are stable. The Country Ceiling was affirmed at 'A-' and the short-term foreign currency IDR at 'B'.
Lesotho’s GDP per capita growth has been estimated to increase from 2.3% in 2013 with an average projection of 3.2% in the next two years. Lesotho’s GDP per capita growth has been growing consistent over time except for the periods when it was hit by the global economic and euro crises.
Lesotho’s GDP growth rate has been increasing consistently from 2002 until 2009 when the impact of the economic crisis began to be felt. The growth rate picked up in 2010 but experienced a further decline in 2011 when the effects of the euro crisis hit hard on world economies. The outlook for Lesotho in 2014 and 2015 remains moderately positive with average growth of 4.4% expected; though there are risks over global demand for diamonds and the renewal of the United States’ African Growth and Opportunity Act which runs out in 2015.
The economy of Lesotho is divided into 3; primary, secondary and tertiary sector. The primary sector comprises of agriculture and mining and quarrying sectors. Activity in the agriculture sector is mainly at the subsistence level and efforts to commercialize the sub sector have been intensified. The mining and quarrying sector, (which is mainly sandstone and diamonds) has shown potential for growth since 2005 and has been increasing significantly until 2011.
The Loti, denoted by LSL, is the official currency of the Kingdom of Lesotho. The Loti (plural “maloti)”, is divided into 100 lisente (singular “sente”). The LSL is pegged to the South African Rand on a 1:1 basis and both currencies are considered legal tender within Lesotho. Coins in circulation include 5, 10, 20, 50, 100, 200 and 500 lisente. Banknotes in circulation include 10, 20, 50, 100 and 200 maloti. The import and export of the local currency is unrestricted.
The Lesotho National Development Corporation (LNDC) is the main parastatal of the Government of Lesotho charged with the implementation of the country’s industrial development policies.
“The mandate of the Corporation is to initiate, promote and facilitate the development of manufacturing and processing industries, mining and commerce in a manner calculated to raise the level of income and employment in Lesotho.” more...