Lesotho: Trade Profile
Though it is an landlocked country, foreign trade plays key role in Lesotho’s economy, representing 132% of GDP in 2021 (World Bank). The southern African nation is a member of the SACU (Southern African Customs Union) Free Trade Area and enjoys privileged access to markets in the EU (through the Economic Partnership Agreement and the SADC-EFTA Free Trade Agreement), the United States (African Growth Opportunity Act), Latin America (Mercosur), as well as Canada, Japan and the Scandinavian countries. The country's trade policy is designed to liberalise the economy and reach more export markets. However, long and complicated red tape and the large number of documents required can limit or even discourage exchanges. Lesotho mainly exports textiles (43.4% of total exports), diamonds (34.8%), wool (6.3%), electrical machinery, cotton, flour and footwear; and its main imports include mineral fuels (15.41% of total imports), electrical machinery, fabrics, vehicles, machinery, food, cereal flours, cotton and medicines (International Trade Centre, 2021).
Lesotho's main customers are South Africa (33.4% of total exports), Belgium (32.7%), the United States (29.5%) and Germany (1%). Its main suppliers are South Africa (71.1% of total imports), China (8.5%), Taiwan (5.5%), Italy (3.8%) and India (3.3%) (International Trade Centre, 2020, latest data available).
Lesotho's trade balance is structurally in deficit, a trend that is expected to continue. According to WTO data, in 2021 Lesotho collected USD 1.064 billion from exports of goods but spent USD 2.051 billion in imports. The country imported services worth USD 407 million, while it exported USD 19 million. The trade deficit reached USD 753 million in 2021 (World Bank). Trade volumes rebounded from the decline caused by the global health crisis. However, Lesotho's exports of textiles and diamonds suffer from weak external demand.
| Foreign Trade Indicators | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Imports of Goods (million USD) | 2,107 | 2,185 | 2,016 | 1,811 | 2,051 |
| Exports of Goods (million USD) | 1,028 | 1,221 | 1,063 | 888 | 1,064 |
| Imports of Services (million USD) | 319 | 433 | 402 | 341 | 407 |
| Exports of Services (million USD) | 31 | 30 | 27 | 10 | 19 |
| Imports of Goods and Services (Annual % Change) | 0 | 1 | -1 | -1 | n/a |
| Exports of Goods and Services (Annual % Change) | 2 | 6 | -13 | -18 | n/a |
| Trade Balance (million USD) | -799 | -710 | -719 | -713 | -753 |
| Foreign Trade (in % of GDP) | 144 | 143 | 135 | 128 | 132 |
| Imports of Goods and Services (in % of GDP) | 98 | 94 | 91 | 88 | 89 |
| Exports of Goods and Services (in % of GDP) | 46 | 49 | 45 | 40 | 43 |
Source: WTO – World Trade Organisation ; World Bank - Latest available data.
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Source: United Nations Statistics Division, Latest Available Data
Member of Southern African Customs Union (SACU)
Member of Southern African Customs Union (SACU)
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Latest Update: September 2023
