AF-092 Zsfiotho
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£SE0cl ran SWYUGAYIONAL 08WRLOPPay FOR AD USE ONLY WAMU,,e. W C. 89119 I BATCH 75 ISLIOSUAPHC INPUT SN IET 1.suJJCT Dw~elomnt and economics rno o-, "CA1TONt anistarm-Lepotho I., VaT.c ANS ISlTITLE A frmework for U.S. assistance in southern Africa; country IeaotKo resource paper: & AUTN@OFA RosepT.H. 4.0DCUMN T DATE 1 w U I OPPAGES 6" A' M UNSEN 1977 115P. A LT330.968.R797 7. NEFERENCE CA@ANIZATIO NAME AND AODREWS ATX I.SUPPLE.MY1TARY1NOT ES ( mj PdUbdu M Aaf 1 I. ANSTNACT Sponsored by the Office of Eastern and Southern African Affairs, under contract with A.I.D., this paper includes social, geographic, economic, and pdfitica' intormation to provide back ground on the issues and opportunities for economic assistance to the countries of Southern Africa through and following the periods of transition in Zimbabwe and Namibia. This report is a profile of Lesotho and Includes a gerral background discussion of the physical features, culture, education, politics, and major issues confronting the government of Lesotho. The economic overview includes the gross domestic product, balance of payments, government economic plan, development problems, development prospects and alternatives. *The sector analyses include agriculture, mining, transportation, water resources, health, education, --population, manufacturing, and tourism. Lesotho is made up of people from one ethnic group, the Basotho people. It is an impoverished nation considered to be among the twenty-five poorest. The land is inhospitable and the majority of the population lives in the lowland areas in densely populateJ settlements. Many seek work in the South African mines; the remaining population subsists on agriculture and food relief. The income remittances from migrant labor equalled the value of the output of the domestic economy in 1975. The agricultural resource base is limited and deteriorating. Only thirteen percent of the land area is capable of supporting crop cultivation and it ;s racked by severe erosion. Lesotho does not have natural resources to provide the capital required to develop the other employment generating sectors of the economy. Lesotho is dependent on the South African economy for its survival. W5.CONTROL NUM811ER II. PRICE Or DOCUMENT PN.-AF-092 L DZSCPtPTORS I. PROJECT NUMR, F'-rnmic analysis Social implications 14.iONTRACT 1 -Uue 1orein aid Southern Africa AM/afr-C-1142 "r ZSfiOthO I. TYPE OP DOCUMENT AID . - .4.. # z ldir'.- 14.1, 6,T LT JAAC R ' Ci .I.D. Reference center Roo5 1656 IS This paper was prepar'ed to prouide background Infor. maton on the asues and opportunities for economic asistnce £o t. e countries of Southern Africa thru and fol&owlng the periods of transition In Zimbabwe and Namibia. It Includes Social. )" phc. Economic. o.j Poll" information. @Wusry 1977 Prepard by: Traneltion In Soutora Africa-- 4s,'Ywm MieAMe TreAiLESOTHO Fame Ofe alSvitmu, AMWc &W9Ma. WAS D Referonco Cont@X Room 1656 NS A FRAHIWMK FOR U.S. ASSISTANCE INSOUTHER AFRICA COUriY RESOURCE PAPER LESOTUO Submitted By THE OFFICE Of EASTERN AND SOUTHERN AFRICA AFFAIRS BUREAU FOR AFRICA AGENCY FOR INTERNATIONAL DEVELOPMENT February 1977 Prepared under Contract AID/afr-C-1142, Work Order 34 By: Tim Rose aerican Technical Assistance Corporation tMLean, Va. TABLE OF CONTMrrS page Introduction I I. GENERAL BACKGOUND A. Physical Features - 1 B. Culture 1- 7 C. Education - S D. Politics I- 8. E. Major issues Confronting Goverwmt of Lesotho I- 8 II. ECONOMIC OVERVIEW A. GDP 1l- 2 B. Balance of Payments 11-20 C. Government Economic Plan 11-27 D. Development Problem 11-32 E. Development Prospects and Alternatives 11-33 III. FOREIGN DONOR ASSISTANCE III- 1 IV. SECTOR ANALYSES Agriculture IV- 1 Mining IV-16 Transportation IV-18 Water Resources IV-22 Health 1V-23 Education IV-29 Population IV-38 Manufacturing IV-40 Tourism IV-41 BIBLIOGRAPHY LEOSTO List of Tables and Figures SECTION I - GENEAL ACKGROUND TABLE I - 1 Rainfall Observations I - 2 FIGURE I -I Map of Lesotho I - 3 TABLE I - 2 Population Table "I .4 FIGURE I - 2 Population Distribution I -. TABLE I - 3 Distribution of the Projected Population by abe group, 1975 1980 1 - 6 TABLE I - 4 School Enrollment I - 9 TABLE I - 5 Total Number of School Graduates by Degree and Level ( 1966) 1 - 10 TABLE I - 6 School Enrollment for 1973 by group I - 11 SE.'nTION - ECONOCIC OVERVIEW TABL= II - 1 Gross Domestic Product/Gross National Product at Market Prices II - 3 TABLE I - 2 Per Capita GDP and GNP in Rand and Dollar Equivalent II - 4 FIGURE II - 1 Relationship betveen gross National Product, Gross Domestic Product and value added by Subsistence Sector I1 - 5 TABLE 11 - 3 National Income Distribution II - 7 TABLE 11 4 Percentage of Gross ;)omestic Product by Industrial Origin 11 8 TABLE II - 4 Gross Domestic Product by Industrial Origin II - 9 TABLE I1 - 6 Average Arnual Cash Earnings in Selected Occupational Groups, 1970/,'1-1974/75 Il 12 TABLE 11 - 7 Annual Retail Price Indices, 1965-74 11 - 13 TABLE 11 - 8 Retail Price Indices (All Urban Households) II - 14 FIGURE II - 2 Annual Retail Prices, 1965-74 II - 15 TABLE 11 - 9 Recorded Imports and Exports by Comodity, 1970-74 1I - 17 FIGURE II -3 Value of Recorded Merchandise Trade, 1970-74 II - 18 TABLE II - 10 Balance of Payments Current Account I1 - 19 TABLE 1I - 11 Suiary of Government Operations 1970/71-1975/76 II - 22 TABLE 11 - 12 Lesotho: Revenues 1I - 24 TABLE 11 - 13 Functional Classification of Government Expenditure I - 25 TABLE 1I - 14 Economic Classification of Governmet Expenditure II - 26 TABU 11 - 15 Comparison of Planned and Actual Governmet Development by Sector First Plan Period II - 29 Table II - 16 Projected Increases in Sectoral Contributions to GDP ( At Factor Cost) Ietveen 1974/75 and 1979/80 11 - 31 SICOI III FOREIGN DONOR ASSITANCE TABLE III - 1 Official Development Assistance III - 4 TABLE III - 2 UN Assisted Country Projects III 5 TABLE III - 3 Estimated Amoun:s of Foreign Resources for the Country Programming Period III 10 TABLE III - 4 Estimated Government and UNDP Inputs In Financial Terms for the Period 1977-1980 III - 11 SECTION 1V SECTOR ANALYSES TABLE IV - 1 Exports of Wool and Mohair, 1970-74 IV - 2 TABLE IV - 2 Livestock Population and Chages in Stock IV- 3 TABLE IV - 3 Area, Planted, Producers' Price, Production, Value, and Yield of Major Crops 1969-73 IV 6 TABLE IV - 4 Land-Use Categories IV 8 TABLE IV - 7 Health Services Delivery System IV - 23 TABLE IV - 8 Hospitalization IV - 24 TABLE IV - 9 Non-Formal Education for Rural Development IV -. 33 TABLE IV - 10 Summry of Courses at the Four FTCe IV - 34 INTRODUCTION Lesotho is made up of a people from a single ethnic group; the Basotho people. national Fros the 19th century until independence the Basotho monarchy maintained under integrity (which was threatened by Boer encroachment on the Basotho lands) a British Protectorate status. of the Lesotho is an impoverished nation conqidered to be among the "inner six" terrain United Natiorus twenty-five poorest nations. Because of the mountainous in of Lesotho the majority of the population resides in the lovland areas densely and the few other populated settlements. The inhospitable land, the overcrowding Ltsotho that natural resources has so constricted the opportunity structure of Africa. The many Basotho seek work outside the country in the mines of South agriculture supple- remaining population eeks out their existence in subsistence often is character mnted in many instances by PL-480 food relief. Lesotho most (and a) drought ized as "among the poorest states of Africa and the world... (Weisfelder, stricken, badly eroded, mountain, and highland plateau country." 1973.) I GENERAL BACKGROUND * Physical Features * Demography * Culture " Education * Politics 1. GENERAL BACKGROUND A. Physical Features The landlocked Kingdom of Lesotho covers an area of 30,350 square kilometers. Surrounded by the Republic of South Africa and ringed with high mountains which form a natural border on the south and east, Lesotho is a mountainous country with 13 percent (393,000 hectares) of the total land area considered suitable for crops. The remaining 87 percent of the land is mainly suitable for livestock grazing except in the higher reaches during the winter months. With improved technology, irrigation and access roads, the amount of arable acreage could be increased. About half of the cultivated areas and mountain pastures are affected in varying degrees by erosion. An estimated 1 percent or more of the nation's topsoil is washed away each y,'ar. Most of the presently arable land is concen trated in the lowlands region. The other 'egions are the Senqu River Valley River region, the foothills (region), and the mountains (region). The Senqu Valley also supports some agricultural cultivatiov. The lowlands region which contains the largest proportion of cropped land rings to the northern section of the country. It lies in an altitude range of 5,000 The 7,000 feet and has a rainfall range of approximately 600 to 900 mm per annum. in lowlands experience occasional drought, with the last prolonged one recorded altitude 1972. The lowlands have warm summers and dry cold winters. The data on Table I-1, and climate conditions for Lesotho is found on Figure 1-1, Altitude; and Rainfall. with an esti- The population of the Kingdom of Lesotho is 1.2 million (de Jure) 1-2). The mated 175,000 absent residing in the Republic of South Africa (See Table fro2 the Popula- population is concentrated in the lowlands region as we can see arable tion Distribution Map (See Figure 1-2). The population densit7 for the an annual lowland region averages 280 persons per square kilometer.