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ambasciata_pretoria

Lesotho

 

Lesotho

LESOTHO    



INSTITUTIONAL FRAMEWORK AND POPULATION

Surface area: 30,355 sq.km.
Capital: Maseru
Other principal cities: 10 discticts: Berea, Butha-Buthe, Leribe, Mafeteng, Maseru, Mohales Hoek, Mokhotlong, Qacha's Nek, Quthing, Thaba-Tseka.
Official name: Kingdom of Lesotho
Form of Government: Constitutional Parliamentary Monarchy
Head of State: King Letsie III
Head of Government: Pakalitha Mosisili
Minister for Foreign Affairs: Mohlabi Tsekoa    
Legislative system:   Bicameral (non-elective Senate and National Assembly). The latest elections were held in May 2002, the LCD obtained 77 seats, the BNP 21, the LPC 5, the NIP 5 and the BCP 3. The previous elections were held in 1998.  
Legal system:   Based on Common Law and Roman Germanic Law. Has not accepted the compulsory ICJ jurisdiction.  
Suffrage: Universal, beginning at 18 years of age.      



Population and social indicators 

Population: 2,207,954 inhabitants (2002 estimate).
Growth rate: 1.33% (2002 estimate).
Life expectancy at birth: 47 years
Ethnic groups: Sotho 99.7%,
Europeans and Asians 0.3%.
Religions: Christian 80%, local practices 20%.
Languages: Sesotho and English
Main political parties: Basotho Congress Party or BCP [Tseliso MAKHAKHE]; Basotho National Party or BNP [Maj. Gen. Justine Metsing LEKHANYA]; Lesotho Congress for Democracy or LCD [Phebe MOTEBANO, chairwoman; Pakalitha MOSISILI, leader] - the governing party; Lesotho People's Congress or LPC [Kelebone MAOPE]; United Democratic Party or UDP [Charles MOFELI]; Marematlou Freedom Party or MFP and Setlamo Alliance [Vincent MALEBO]; Progressive National Party or PNP [Chief Peete Nkoebe PEETE]; Sefate Democratic Party or SDP [Bofihla NKUEBE].  



HISTORICAL BACKGROUND

Lesotho’s origins as a country date back to the 19th century when King Moshoeshoe I united the Basotho tribes, which were scattered throughout central and southern Africa as a result of the inter-African wars triggered by the Zulu uprising. As the Basothos began to lose power with the emergence of the Boers, Moshoeshoe I asked the British to place his kingdom under the protection of the Crown. Basotholand was under the administration of Cape Colony up until 1884, when the British government assumed direct control over the protectorate through a High Commissioner, which availed itself of a traditional government with a king and local chiefs. Basotholand became independent as Lesotho in 1966.

The Basotho National Party (BNP) won the first universal suffrage elections and its leader, Chief Leabua Jonathan, became its first Head of Government. Relations were tense between the Prime Minister and the King from the very beginning as Moshoeshoe II sought to extend the reach of his power beyond the limits set by the constitution. Chief Jonathan suspended the constitution in 1970 and annulled the general elections planned for the same year — the country’s first after gaining independence. He was convinced that the BNP would have lost to the Bosotho Congress Party (BCP). The National Assembly was abolished and the leaders of the opposition exiled, including the King, although only for a limited period of time.

Elections called in 1985 were boycotted by both parties of the opposition with the BCP, which even went as far as to support the armed resistance of the Lesotho Liberation Army. Chief Jonathan was ousted in a coup led by General Metsing Lekhanya in January 1986. The General then put together a five-member military junta that began to rule the country. The National Assembly was dissolved, legislative and executive powers were placed in the hands of the King, all domestic political activity was banned and the constitution was suspended. 

After this relations between the General and the King deteriorated rapidly, to the point where the King was exiled in 1990 and replaced by his eldest son, who succeeded him with the name of Letsie III. In April of 1991 General Lekhanya was overthrown by Colonel Phisoana Ramaema. The ban against political activities was revoked in May and the rules for new elections were laid out in a constitution broadly based on that of 1966. Many of Losotho’s political figures returned following the 1992 declaration of amnesty, including former King Moshoeshoe II. The BCP took all 65 seats in the elections of 1993, declared free and impartial by observers, and Ntsu Mokhehle became Prime Minister.
 
Mokhehle invited the BNP and other opposition parties to appoint members of the newly established Senate, confirming that Letsie III would, from that point on, be a constitutional monarch.      

The BCP government ran into difficulties, however, starting in early 1994, and had to struggle to maintain its authority over the army and the police, whose discontent was being fuelled by the opposition. In August of 1994, King Letsie III fired the government, which, as a result of internal and international pressure, was reinstated the following September. Within the framework of an agreement fostered at international level, the BCP had to agree to dialogue with the opposition and restore King Moshoeshoe II to Letsie III’s place in January of 1995. Letsie was once again made king in 1996 following his father’s death in a road accident. Later the BCP gradually began losing ground as a result of the struggle between the conservatives aligned with Mokhehle and a second more radical movement led by a series of young activists.

When Mokhehle’s mandate as party leader came to an end his rivals attempted to replace him with his deputy Qhobela. The Prime Minister left the BCP in June of 1997, taking with him the majority of members of Parliament and all the members of the Council of Ministers in order to form a new party — the Lesotho Congress for Democracy (LCD). The LCD won the elections of 1998 and Pakhalita Mosisili succeeded Mokhehle as Prime Minister. The 1998 elections — defined by international observers as open, fair and acceptable according to international standards — were an overwhelming victory for the Lesotho Congress for Democracy (LCD), which obtained 79 out of 80 seats.

The opposition, however, did not accept the results at the polls, deeming the vote “corrupt and manipulated”, and a violent protest erupted. The mediation of South African President Mbeki helped the two sides to reach an agreement on the naming of a commission of inquiry made up of experts from South Africa, Botswana and Zimbabwe, and chaired by South African Judge Langa. Mutiny by the troops and the unrest that broke out in the towns when the commission did not annul the elections, even though serious irregularities were discovered, led the Prime Minister to request direct military intervention from the SADC in order to prevent a coup.

South Africa and Botswana sent peacekeeping forces into the country in September 1998 to restore order, and negotiations were launched between the government and the rebels. It was subsequently agreed that new elections would be held (subsequently set for 8 April 2000) and the Interim Political Authority (IPA) was charged with preparing them jointly with the legislative and executive institutions. In early August 1999 the enlarged SADC troika, made up of South Africa, Botswana, Zimbabwe and Mozambique, convinced the two sides to agree to an electoral system that combined elements of the majority system currently in force with the proportional adjustments desired by the opposition parties. This agreement, along with the gradual withdrawal of foreign armed forces, made it possible for Lesotho to return to political normality.  



DOMESTIC POLITICS 

The optimism that accompanied the signing of the Memorandum of Understanding between the government and the IPA in December 1999, which officially recognised a new electoral system, did not obtain the desired results.

The process that should have led to legislative elections by June 2000 began to run aground when, in February, the LCD presented the Parliament with a constitutional amendment bill on the basis of which the new electoral structure (election of 50 of the 130 members of Parliament on the proportional system) would have to be submitted to referendum.

In the face of accusations by the opposition parties (BNP and BCP), and the IPA itself, of having adopted a strategy by which to deliberately postpone the electoral process, and fearing social disorder, violent protest and its main party’s loss of legitimacy, the government publicly declared that the elections would be held in March of 2001. However, as a result of delays in getting eligible voters registered and despite much criticism of the Independent Electoral Commission, the elections were postponed to March 2002.  

The Head of the BNP, Metsing Lekhanya, declared that his party would not have accepted postponement of the elections to 2002 and threatened political action, which were resolved in an unheeded request for pressure on the government by the SADC and the Commonwealth. In the meantime, following its January congress the party of the Prime Minister (LDC) broke up. On that occasion a new national executive committee was elected. The Prime Minister, instead of condemning his opponent and declaring a split, underlined the need for unity in the party in view of the upcoming elections. Both groups came out in favour of unity, but refused to come to terms. The matter finished in the courts with a series of judgements to the benefit of both parties.   Finally, in March 2002 King Letsie III announced that the elections would be held on the following 25 May according to the combined majority (election of 80 parliament members) and proportional (40 parliament members) system.

The LDC easily won the elections, obtaining 77 out of 80 seats in the majority jurisdictions. The LDC having obtained over 55% of the seats, the remaining 40 were distributed among the 15 other parties. The BNP, while it had not won in any majority jurisdiction, obtained the second best outcome in terms of total votes (22%) but, despite this success, rejected those results in a gesture that seemed planned well in advance of the elections and in the absence of international observers to confirm the accusations.

A situation was thus created in which no party can operate alone as official opposition to the LDC, since the law requires that the leader of the opposition be supported by at least 25% of the deputies. Prime Minister Mosisili reformulated the government in June, bringing in, among others, respected economist and former World Bank Vice President Timothy Tahane as Minister for Finance, Development and Planning. Leaving his position to Tahane, Tom Thabane was appointed Minister of Home Affairs, in a decision that was interpreted as a desire to attribute greater importance to domestic problems. The choice of replacing members of the various parties with technocrats in order to gain greater credibility in the view if international donors, displeased many politicians, arousing fears of defection from dissatisfied parties.  
Although the situation seemed to have calmed down following the May 2002 withdrawal of the troops of the South African Defence Force from along the Lesotho borders, the situation remains worrying. Throughout 2003 and in the early months of 2004 an increase was recorded in the country’s crime rate, in particular in the capital Maseru.    



ECONOMIC PICTURE  

1. Economic trends

Lesotho, whose past growth has been very encouraging and among the best examples of performance in Africa, has in recent years fallen back into not particularly satisfactory GDP growth levels, and forecasts for the coming years are not very rosy. The country is small and mountainous, with no seafront, and its only important natural resource is water (Lesotho is an important water and, potentially, energy reserve for South Africa). The economy is still heavily dependent on South Africa and is based on subsistence agriculture, animal breeding and the incomes of miners employed in South Africa. Customs revenues make up the majority of State revenues, while the funds of international donor countries are the single most important source of foreign money.
The support of international donors is becoming increasingly indispensable as a result of long-term drought and a marked worsening of the HIV/AIDS epidemic.

The United Nations launched an appeal in July 2003 for the collection of emergency non-food aid on behalf of Lesotho and the other five countries of the region — Malawi, Mozambique, Swaziland, Zambia and Zimbabwe. The government declared a state of emergency in February 2004 in light of the scarcity of food resources owing for the most part to failed cereal crops.   The government recently approved programmes for diversifying Lesotho’s economy, which is still mainly a rural one.

Measurable improvements have been seen in the energy and water supply sectors (mainly in exports), associated with the Lesotho Highlands Water Project (LHWP), whose second phase began in March 2004. Diversification of the country’s economic base hinges on the development of processing plants for agricultural products and their exportation, as well as on growth in the sector of eco-tourism (Lesotho’s natural parks and reserves are a great tourist attraction). Trends in the cost of living in South Africa (the origin of 90% of the country’s imports) decisively influence Lesotho’s inflation rate. Depreciation of the local currency (loti) in 2001 pushed prices up, but the drop in inflation in South Africa favoured the containment of inflationary pressures on Lesotho.

The country, nevertheless, showed a marked increase in consumer prices following the introduction of VAT in 2003, during which year the average inflation rate reached 8%.   The government has continued to reduce public spending, which went from 37% of GDP in 2000-01 to 34% in 2002. The national budget is in the black (2.2% of GDP in 2002). The economic come-back of the U.S. (the main market for the country’s textile exports) and of South Africa, Lesotho’s second largest export market, will have a positive impact on the country.

According to estimates by the Economist Intelligence Unit, Lesotho’s growth prospects have improved considerably, with a 2002 year-end increase in GDP of approximately 4%, and in growth in 2003 of 3.6%. Substantial balance of payments improvements were recorded in 2002. The country’s main exports (textiles) showed marked improvement as a result of the U.S.A.’s reduction of customs tariffs on textiles and apparel from southern Africa and in the wake of the country’s inclusion under the AGOA (African Growth and Opportunity Act).

The rand’s depreciation against the U.S. dollar has also impacted positively, causing a reduction in the value of imports and attracting foreign investments to this market sector (approximately USD 120m). After reaching a peak of USD 219m in 1998, the current account deficit was gradually reduced, levelling off in 2003 at USD 80m. The International Monetary Fund estimated that the deficit would drop to 11.8% in the 2003–2004 two-year period. Lesotho could draw positive developments from various factors such as the completion of the Lesotho Highlands Water Project, the entrance into effect of the SADC trade protocol and the implementation of the government-launched privatisation programme.  


2.  Economic and trade relations with main partners

As has already been mentioned, Lesotho’s economy depends almost completely on its powerful neighbour South Africa, of which it constitutes a small enclave. Over 80% of imports come from South Africa and approximately 40% of exports are directed there. In the medium term the exploitation of important water resources should become the country’s main font of income.

Under way also is the Lesotho Highlands Water Project (LHWP), a gigantic project of dams and pipelines for the production of hydroelectric energy and the channelling of water to South Africa and other countries of the region. The project’s total cost has been estimated at approximately USD 8bn and it is to be competed by 2027; it is being financed by South Africa with the support of the World Bank (which is the main creditor), the UNDP and the European Union. The Italian firm Impregilo leads an international consortium — Highlands Water Venture — for the construction of the Katse and Mohale dams and connecting tunnel.

Since a number of cases of corruption were uncovered in association with the LHWP and, the government has launched a judiciary procedure against various foreign firms. In February 2004 the French firm Schneider Electric SA pleaded guilty to accusations of corruption and was fined 10 million Rand.  


3. Relations with International Financial Institutions


The positive outcome of the general elections of May 2002 confirming the Lesotho Congress for Democracy’s leadership of the government undoubtedly strengthened the country’s faith in the economy and guaranteed the private sector and international donors continuity in support programmes already signed previously. The International Monetary Fund, which continues to maintain good relations with the country, recently recognised the government’s progress in macroeconomic stabilisation and structural reforms. In fact, economic forecasts seem not to deviate much from the three-year economic plan approved by the same body in March of 2001.

The goals of the PRGF (Poverty Reduction and Growth Facility), which foresees funding of approximately USD 32m (SDR 24.5), are economic stability, improvement of social services and poverty reduction. To date, within the framework of this programme, Lesotho has received USD 14m (approx. SDR 10.5m), 5 million of which in the first year and another 9 million in 2002. In September 2002 the IMF issued a very positive report on the country’s macroeconomic situation, which has respected the criteria imposed by the PRGF, despite accompanying the serious humanitarian crisis resulting from the drought that has struck all of sub-Saharan Africa.

Lesotho is part of the SADC and the Southern African Customs Union (SACU), whose members include South Africa, Botswana Namibia and Swaziland, and which without a doubt constitutes the main market (53%), followed by North America (45.6%) and the European Union (1%). Almost 90% of Lesotho’s imports come from SACU countries. Lesotho is part of the World Bank and of the International Development Association (IDA) of 1968; since 1972 it is part of the International Finance Corporation (IFC) and has been, since 1988, one of the founding members of the Multilateral Investment Guarantee Agency (MIGA).

The World Bank supports the poverty reduction and market integration strategies thus far undertaken by the government of Maseru. To date the World Bank has supplied the country with assistance in the sectors of agriculture, infrastructure, health, nutrition, education and irrigation, making an overall commitment of USD 30m.  


4.  Debt Status

Lesotho is one of the “IDA-only non HIPC” (eligible for eventual partial debt cancellation measures in accordance with Law no. 209/2000). After a substantial reduction in the two-year period 1999–2000 (going from USD 731.7m at the end of 1999 to USD 595.5m at the end of 2001), the trend in Lesotho’s foreign debt has been reversed, and at the end of 2002 it stood at approximately USD 900m, increasing further to USD 610m in 2003. The debt service continues to be sustainable: the IMF estimates its reduction to below 10% within the two-year period 2003–2004. As a result of a rapid depreciation of the local currency, it is estimated that the incidence of foreign debt on GDP will go from 63% (2000–2001) to 73% of GDP (2002–2003).    



BILATERAL RELATIONS  

1. Political relations

Relations between Italy and Lesotho are not quantitatively intense but they are excellent from the qualitative point of view. In addition to being in agreement on major international issues, Lesotho has often supported Italian candidates and maintains an Embassy in Rome, an Honorary Consulate General in Venice and an Honorary Consulate in Nuoro; a recent request was made for the opening of another Honorary Consulate in Carrara with jurisdiction over the regions of Tuscany, Lombardy, Piedmont, Valle d’Aosta and The Marches. Minister for Foreign Affairs Thabane was in Palermo in December 2000 attending the United Nations Conference for the signing of the UN Convention Against Transnational Organised Crime and returned to Italy in December 2001 for a conference on investments in the SADC area organised by the Ministry for Foreign Affairs and the Foreign Trade Institute. With regard to Security Council reform, Lesotho adheres to the African position of assigning at least two permanent seats to Africa.    


2. Economic, financial and commercial relations

The commercial trade between Italy and Lesotho is maintained on very modest levels and shows a steady positive balance for Italy. Compared with exports of EUR 1,100,686 in 2000, our country imported goods valued at EUR 53,998 for an overall foreign trade balance of EUR 1,154,686. In 2001 Italy imported EUR 337,372 worth of goods from Lesotho and exported goods valued at 1,100,686, for an overall foreign trade balance of EUR 438,000.

In the initial ten months of 2002, foreign trade between the two countries — equal to EUR 1,409,207 — concerned Italian exports exclusively. Italy exports machinery and non-electrical apparatus, synthetic fabrics, mining equipment, bolts, screws and chemical–pharmaceutical products, and imports flowers and live plants, fresh and frozen fish, wheat flour and pasta, meat extracts, food oils and fats, textile products, sewn objects and synthetics.

The Italian firm Impregilo is head of an international consortium building a system of dams for the LHWP (Lesotho Highlands Water Project), which will serve to collect the mountain water to then supply water and hydroelectric energy. There are no bilateral understandings on the application of multilateral Paris Club agreements.  SACE currently ranks Lesotho in the sixth risk category, and in class B. Its attitude toward such countries departs from the assumption that it is necessary to verify — based on the political and/or economic–financial situation of each individual country — the advisability of setting specific restrictions for certain kinds of operations. On these bases, with reference to Lesotho, in the short-term only bank-guaranteed, private sector enterprises are insurable, while for the medium and long terms assessment is limited to operations guaranteed by third countries.

Current commitments to Lesotho amount to EUR 24.45m and are entirely MLT (à moyen et long terme). The operations currently under way concern three projects guaranteed in 1998, two of which are guaranteed for “credit risk” (EUR 13.3m). To date repayments (EUR 3.4m) have been made regularly and without delay.     3. Italian community, and Lesotho Community in Italy, and migration issues There are currently approximately 30 Italian nationals working in Lesotho, almost all of whom are employed by the firm Impregilo and working on the Lesotho Highlands Water Project. Emigration toward Italy is practically non-existent, as Lesotho nationals seek to emigrate either to South Africa or across the ocean to the former colonial power, Great Britain, or else toward Ireland, a country with which traditionally strong bonds exist.  


4. Development cooperation

Emergency food aid valued at approximately one million Italian lire was donated in 2000; the same was true for 2001;

 


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