(3 minutes read)
· Pandemic has had a major impact on the economy of Lesotho. But the country is looking forward to come out o the blues of the pandemic and is looking towards doubling the government revenue
· The revenue authorities have been empowered to fully implement its tax modernization project
· Lesotho is one of the smallest countries in Africa lying in the southern side of the continent
· Surrounded by South Africa, the miniscule country is having only 2.1 million people and is banking on improved revenue collection for growth
Pandemic has had a major impact on the economy of Lesotho. But the country is looking forward to coming out o the blues of the pandemic and is looking towards doubling the government revenue. The revenue authorities have been empowered to fully implement its tax modernization project. Lesotho is one of the smallest countries in Africa lying in the southern side of the continent. Surrounded by South Africa, the miniscule country has only 2.1 million people and is banking on improved revenue collection for growth.
Thabo Khasipe, Commissioner General of the Lesotho Revenue Authority said that it was quite feasible to double the revenue collections. Authorities are planning to block all the holes to reduce leakages. The country is in the process of strengthening and modernizing in the legislative framework to eliminate pilferages.
Covid-19 had a heavy impact on the economy. The economy was estimated to have contracted by 5.2% in 2020 from modest growth of 0.6% in 2019. This reflects low external demand, adversely impacted the mining and manufacturing industries. Estimates of growth in the mining industry (textiles and clothing, construction) and services were revised downwards by 34.5, 29.3 and 9.9, and 4.2 percentage points in 2020, respectively.
Lesotho’s economy is dependent on South Africa. It imports goods mostly from South Africa, mainly foodstuffs, constituting about 80% of its total imports. The decline in imports from South Africa contributed to food shortages in Lesotho, fueling inflationary pressures. Lesotho’s economic recovery is closely linked to the pickup of the South African economy. The economy is poised to grow by 4.1% in 2021 and 4.4% in 2022, owing to mining and construction associated with the second phase of Lesotho Highlands Water Project.
