Economy of Lesotho

Lesotho's economy is based on diamonds exported all over the world and water sold to South Africa, manufacturing, agriculture, livestock, and to some extent the earnings of laborers employed in South Africa. Lesotho also exports wool, mohair, clothing, and footwear. One of Levi's jeans manufacturing facilities is located there. Also in Lesotho is one of Russell Athletic plants[citation needed]. Lesotho is geographically surrounded by South Africa and economically integrated with it as well. The majority of households subsist on farming or migrant labor, primarily miners who remain in South Africa for 3 to 9 months. The western lowlands form the main agricultural zone. Almost 50% of the population earns some income through crop cultivation or animal husbandry, with over half the country's income coming from the agricultural sector.[citation needed]
The Afriski resort in the Maluti Mountains of Lesotho.

Water and diamonds are Lesotho's significant natural resources.[citation needed] Water is utilized through the 21-year, multi-billion-dollar Lesotho Highlands Water Project (LHWP), under the authority of the Lesotho Highlands Development Authority. The project commenced 1986.[12] The LHWP is designed to capture, store, and transfer water from the Orange River system to South Africa's Free State and greater Johannesburg area, which features a large concentration of South African industry, population, and agriculture. Completion of the first phase of the project has made Lesotho almost completely self-sufficient in the production of electricity and generated approximately $40 million (R300 million or 300 million Maloti) [13] annually from the sale of electricity and water to South Africa. The World Bank, African Development Bank, European Investment Bank, and many other bilateral donors financed the project. Lesotho has taken advantage of the African Growth and Opportunity Act (AGOA) to become the largest exporter of garments to the US from sub-Saharan Africa. Exports totaled over $320 million in 2002. Employment reached over 50,000, marking the first time that manufacturing sector workers outnumbered government employees.

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