“The industry and services are projected to contract by an estimated 36.9% and 4.4 % respectively. Furthermore, the disruption of supply chains in South Africa and the consequent decline in global demand for manufacturing (textiles) and diamond exports will further dent Lesotho’s export earnings during the coming year.
“Trade is particularly important for Lesotho with intra SADC exports accounting for 27.8 % of total exports of goods in 2018/2019 and 71.3 % of total imports of goods during the same period. Thus, any disruption to trade routes chokes our economy from many fronts and magnifies our challenges,” Mr Sofonea said.
He added: “Under very peculiar conditions precipitated by the COVID-19 pandemic which has wreaked havoc across the world since being declared a pandemic in November 2019, our economies continue to be devastated by the direct and indirect impact of the pandemic.
“This has further deepened the challenges carried forward from the fiscal year 2019/2020 including the adverse impact of the unsettled global trading environment induced by the USA-China trade tensions, the slowing growth in the economies of our key trading partners, including South Africa, and the adverse climate conditions that have left our agricultural sector reeling.”
The Minister noted that real growth in GDP in Lesotho had been subdued during the three years prior to the pandemic with the economy contracting by 2.5% and 2.6% in 2017/2018 and 2018/2019 respectively, while 2019/2020 preliminary estimates projected a further contraction of 3.2 %.