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Lesotho

11

Projects Includes planned, ongoing and closed projects

US$ 232.98 million

Total Project Cost

US$ 92.44 million

Total IFAD financing

339,720

Households impacted


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The Context

Lesotho is a small land-locked country, completely surrounded by South Africa. It has a population of about 2 million and is classified as a low-income country.  

Since 1980, the Government has made considerable progress in developing Lesotho’s economy. Recent economic growth has been attributed to expansion of garment manufacture and mining, and to revenue generated by exporting water to South Africa. But these economic gains have not translated into improved well-being for the people. 

Income inequality and poverty rates remain high, especially in rural areas. The unemployment rate is 28 per cent, and about 30 per cent of rural people live in extreme poverty. Underemployment is widespread, especially in rural areas. 

About 70 to 80 per cent of the country’s population lives in rural areas, and more than three quarters of these people are engaged in agriculture – mostly traditional low-input, low-output rainfed cereal production and extensive animal grazing. An estimated 57 per cent of the population lives below the poverty line, according to a 2010/2011 household budget survey. Poverty has fallen in urban areas and climbed in rural areas. 

Lesotho cannot produce enough food to feed its growing population. The agriculture sector accounts for about 17 per cent of GDP. It is the primary source of income, or an important supplementary source, for more than half the population in rural areas. Only about 10 per cent of the country’s total land area is classified as arable.

In the past, remittances from mine workers were a major source of rural livelihoods, providing cash to purchase agricultural inputs or invest in household assets and housing. However, remittances have declined steadily over the past decade.

Despite the overall economic growth, opportunities to earn income remain limited. They are generally confined to urban areas and wage employment in the industrial sector. The rural economy and agricultural development will therefore continue to play a major role in Lesotho’s development strategy for the foreseeable future.

The Strategy

In Lesotho, IFAD loans support the efforts of smallholder farmers to ensure food security for their families, raise their incomes and improve overall nutrition. 

Increased productivity is a key to achieving these aims and reducing poverty in rural areas. IFAD programmes and projects encourage rural people's participation in planning and developing income-generating activities, including microenterprises.

Our strategy in the country has focused on three main opportunities for reducing rural poverty:

  • diversifying and intensifying agriculture and livestock production;
  • rehabilitating and reclaiming degraded lands, including rangelands;
  • developing rural financial services to support improved agricultural production and create income-generating activities.

Country Facts

An estimated 57 per cent of the population lives below the poverty line, according to a 2010/2011 household survey. Poverty has fallen in urban areas and grown in rural areas.

The agriculture sector accounts for about 17 per cent of GDP. It is the primary source of income, or an important supplementary source, for more than half of the rural population 

Since 1995, IFAD has supported nine programmes in the country for a total of US$78.9 million, benefiting more than 179,000 poor rural households.


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Country documents

Lesotho COSOP 2020-2025

Type: Country Strategic Opportunities Programme
Region: East and Southern Africa

Lesotho Country Strategy Note, December 2018

Type: Country strategy note (CSN)
Region: East and Southern Africa

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Related news

Lesotho and IFAD join to improve the livelihoods of the most vulnerable small-scale farmers

September 2020 - NEWS
160,000 poor rural households in Lesotho will benefit from new financing for a project that will boost food security and nutrition, mitigate the impact of climate change and strengthen livelihoods for greater income. 

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Related stories

Spinning yarns – Investing in wool and mohair in Lesotho

November 2019 - STORY
Wool and mohair form the bedrock of Lesotho’s rural economy. Producers range from smallholder farmers with small flocks, to breeders of large flocks of superior gene-quality animals. With over 1.2 million sheep and 845,000 goats there is a lot of potential to develop the industry. 

Recipes for Change: Sechu Sa Nku (Mutton Stew)

June 2016 - STORY
Climate change – including rising temperatures, and a greater frequency of droughts and extreme rain events – is negatively affecting local communities living in rural parts of Lesotho. Lesotho ranks 158 out of 186 in the United Nations Development Programme UNDP Human Development Index. Poverty is concentrated in the rural parts of the country, being greatest in the mountain areas.

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Related publications

ASAP Lesotho factsheet

May 2015
Lesotho ranks 158 out of 186 in the UNDP Human Development Index. Poverty is rife, and it is concentrated in the rural areas of the country, with the greatest incidence in the mountain areas. Lesotho's rural economy is dominated by livestock production. Lesotho's chief export is directly related to this livestock, that of wool and mohair production. Lesotho is the second largest global producer of mohair, and this counts towards a large percentage of the country 's Gross Domestic Product (GDP).
Only high quality wool and mohair can be exported, and this is dependent on the quality and health of the livestock. The main factor in raising high quality livestock is maintaining healthy rangelands.

Enabling poor rural people to overcome poverty in Lesotho

May 2008

The main objectives of IFAD’s operations in the country are to improve food security and family nutrition. Since 1980, IFAD has supported agricultural development by investing a total of US$64.3 million in seven programmes and projects to reduce poverty in the country’s rural areas.
Normally, Lesotho is not in a position to grow enough food to feed its growing population. 

Offsetting the effects on poor households of declining agricultural production, IFAD investments support the efforts of small-scale farmers to ensure food security for their families and improve their incomes. Increased productivity is a key to achieving these aims and to reducing poverty in rural areas. IFAD finances programmes and projects that encourage poor people’s participation in the planning and development of income-generating activities, including microenterprises.

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Related videos

A day in the life of a vegetable farmer in Lesotho

September 2019 - VIDEO
Thabo Lefatle owns and runs a small vegetable farm in Lesotho’s Mafeteng district, south of the capital Maseru. He is one of 55,000 smallholder farmers in Lesotho who applied for and won public grants.

Lesotho's award-winning chef talks climate change and supporting small farmers

March 2016 - VIDEO
In the high rocky peaks of the African mountain kingdom Lesotho, a female chef has been creating a buzz in international culinary circles by combining ancient traditional recipes from Mosotho elders with fresh local products sourced from smallholder farmers around the remote town of Thaba Tseka.