TELECOMS MARKET

Lesotho has a rudimentary system consisting of a modest number of landlines, a small microwave radio relay system, and a small radiotelephone communication system; mobile-cellular telephone system is expanding. Two main companies are competing to attract the most customers, particularly in the mobile sector. The Lesotho Communications Authority (LCA) is the regulatory agency.

BUSINESS ENVIRONMENT

Small, mountainous, and completely landlocked by South Africa, Lesotho depends on a narrow economic base of textile manufacturing, agriculture, remittances, and regional customs revenue. About three-fourths of the people live in rural areas and engage in animal herding and subsistence agriculture, although Lesotho produces less than 20% of the nation’s demand for food. Agriculture is vulnerable to weather and climate variability.

Lesotho relies on South Africa for much of its economic activity; Lesotho imports 90% of the goods it consumes from South Africa, including most agricultural inputs. Households depend heavily on remittances from family members working in South Africa in mines, on farms, and as domestic workers, though mining employment has declined substantially since the 1990s. Lesotho is a member of the Southern Africa Customs Union (SACU), and revenues from SACU accounted for roughly 44% of total government revenue in 2014. Lesotho also gains royalties from the South African Government for water transferred to South Africa from a dam and reservoir system in Lesotho. However, the government continues to strengthen its tax system to reduce dependency on customs duties and other transfers.

The government maintains a large presence in the economy – government consumption accounted for 27% of GDP in 2016. The government remains Lesotho’s largest employer. Lesotho managed steady GDP growth at an average of 4.5% from 2010 to 2014 but poverty remains widespread around 57% of the total population.

RELEVANT INTERNET EXCHANGE POINTS

• LIXP – Lesotho Internet Exchange point