Research and consulting in Lesotho
IOA has conducted extensive research and consulting to better understand Lesotho, a country often overlooked because of its small size and landlocked status. IOA’s consultants have found that the country has few natural resources and struggles to achieve political stability. The mountainous country’s primary export, water from its highland areas that is channelled to South Africa, has proved to be in potential jeopardy if toxic run-off from mining operations, if not managed.
Agriculture and livestock provide the livelihoods for the largely rural population. According to IOA analysts, high rates of poverty are offset to some degree by remittances sent home from workers abroad. The local population cannot sustain a lucrative domestic market for investors, and tourism has not yet been developed to its fullest potential.
Key opportunities in Lesotho:
- South African municipalities are dependent on Lesotho’s water, and the water delivery system is being expanded
- Lesotho’s famous mohair and livestock products continue to be in demand, enduring as the core of a local textile industry
- The service sector contributes half of Lesotho’s economic activity and is primed for growth as tourism increases
Key concerns/risks in Lesotho:
- The country’s small market size and limited natural resources are fundamental challenges to building a sustainable economy
- Government is Lesotho’s largest employer, which is made even more problematic by government corruption and political instability
- Global warming has increased the incident and severity of drought, particularly impacting grazing lands