Editing Economy of Lesotho (section)

== Economic history ==
Lesotho's early economic history was shaped by its integration into the regional economy of Southern Africa, a heavy reliance on labor migration and productivity in agriculture. In the 19th century, Lesotho was a significant agricultural exporter, supplying grain and mohair to South African mining camps.<ref>{{Cite journal |last=Murray |first=Colin |date=1980 |title=From granary to labour reserve: an economic history of Lesotho |url=https://www.sahistory.org.za/sites/default/files/archive-files/LaNov80.0377.5429.006.004.Nov1980.4.pdf |journal=South African Labour Bulletin |volume=6 |issue=4 |pages=3-20}}</ref> However, by the early 20th century, worsening land shortages and unfavorable climate conditions shifted Lesotho into a net food importer and a labor reserve for South African mines and farms.<ref name=":0">{{Cite journal |last=Aerni-Flessner |first=John |date=2014 |title=Development, Politics, and the Centralization of State Power in Lesotho, 1960-75 |url=https://www.jstor.org/stable/43305214 |journal=The Journal of African History |volume=55 |issue=3 |pages=401–421 |issn=0021-8537}}</ref> Labor migration became a central economic pillar, with tens of thousands of Basotho men seeking employment in South Africa throughout the 20th century. By 1982, over 100,000 Basotho were working in South African industries.<ref>{{Cite journal |last=Cobbe |first=James |date=1983 |title=The Changing Nature of Dependence: Economic Problems in Lesotho |url=https://www.cambridge.org/core/journals/journal-of-modern-african-studies/article/abs/changing-nature-of-dependence-economic-problems-in-lesotho/5F05D00A22F2043F6944B6B9FB6CC3FD |journal=The Journal of Modern African Studies |language=en |volume=21 |issue=2 |pages=293–310 |doi=10.1017/S0022278X00023284 |issn=1469-7777}}</ref>

Lesotho's independence on the 4th of October 1966 marked the beginning of increased international aid flows, with Britain, Sweden, and multilateral donors providing financial assistance.<ref name=":1">{{Cite web |title=Wayback Machine |url=https://citeseerx.ist.psu.edu/document?repid=rep1&type=pdf&doi=edfb76eccb887ed2a80c3d5fb7ab3afd0a164cf7 |archive-url=http://web.archive.org/web/20241113033708/https://citeseerx.ist.psu.edu/document?repid=rep1&type=pdf&doi=edfb76eccb887ed2a80c3d5fb7ab3afd0a164cf7 |archive-date=2024-11-13 |access-date=2025-03-13 |website=citeseerx.ist.psu.edu}}</ref> And early aid efforts were largely directed at agriculture, based on the assumption that Lesotho was a purely agrarian society.<ref>{{Cite web |title=Anti-Politics Machine |url=https://www.upress.umn.edu/9780816624379/anti-politics-machine/ |access-date=2025-03-13 |website=University of Minnesota Press |language=en-US}}</ref> Large-scale rural development projects, including those funded by the World Bank and USAID, repeatedly failed due to, among other reasons, poor planning and a lack of local participation.<ref name=":0" />

Political instability influenced aid patterns. Following a 1970 coup, British and Swedish aid was temporarily suspended but resumed later that year.<ref name=":1" /><ref>{{Cite web |title=Dreams for Lesotho |url=https://undpress.nd.edu/9780268103613/dreams-for-lesotho/ |access-date=2025-03-13 |website=University of Notre Dame |language=en-US}}</ref> Lesotho also leveraged its opposition to apartheid to attract more aid, particularly after the 1976 Soweto Uprising and Transkei border conflicts.<ref name=":1" /> By 1979, development assistance had risen to $64 million.<ref>{{Cite journal |last=Crush |first=Jonathan |last2=Wellings |first2=Paul |date=1983 |title=The Southern African Pleasure Periphery, 1966-83 |url=https://www.jstor.org/stable/160586 |journal=The Journal of Modern African Studies |volume=21 |issue=4 |pages=673–698 |issn=0022-278X}}</ref>

Until the political insecurity in September 1998, Lesotho's economy had grown steadily since 1992. The riots, however, destroyed nearly 80% of commercial [[infrastructure]] in [[Maseru]] and two other major towns in the country, having a disastrous effect on the country's economy. Nonetheless, the country has completed several [[IMF]] [[Structural Adjustment Program]]s, and [[inflation]] declined substantially over the course of the 1990s. Lesotho's [[trade deficit]], however, is quite large, with [[exports]] representing only a small fraction of [[imports]].

The global economic crisis hit the Lesotho economy hard through loss of textile exports and jobs in the sector due largely to the economic slowdown in the United States which is a major export destination, reduced diamond mining and exports, including  weak prices for diamonds;  drop in SACU revenues due to the economic slowdown in the South African economy, and reduction in worker remittances due to weakening of the South African economy and contraction of the mining sector and related job losses in South Africa. In 2009, GDP growth slowed to 0.9 percent.<ref name="World bank Lesotho: Country Brief"/>