By Ayomide Otitoju
The African Development Bank (AfDB) has approved a new $209 million Country Strategy Paper (CSP) for Lesotho, outlining a five-year roadmap to boost economic diversification, resilience, and inclusive growth.
The strategy comes at a critical time as Lesotho faces mounting challenges, including the fallout from a recent 15 percent U.S. tariff on apparel exports, the loss of a $300 million Millennium Challenge Corporation compact, and persistent dependence on regional economic performance. Nearly half of the population lives in poverty, while youth unemployment hovers around 39 percent.
“Lesotho stands at a critical juncture,” said Moono Mupotola, AfDB’s Deputy Director General for Southern Africa and Country Manager for Lesotho. “This comprehensive strategy leverages the country’s abundant water resources, strategic location, and demographic dividend to unlock new pathways for inclusive growth and economic diversification.”
The CSP focuses on two priorities: building sustainable infrastructure to drive industrialization and strengthening institutional and human capacity to boost competitiveness. Initiatives include expanding electricity access through the Mission 300 program, cutting broadband costs to foster a start-up ecosystem, and improving access to safe drinking water.
The Bank will also support investments in agricultural and water infrastructure, modernize tax collection systems, and provide training programs for civil servants. In addition, the strategy aims to promote digital innovation and entrepreneurship, with skills development programs targeting 20,000 young people—40 percent of them women.
Recognizing the country’s vulnerability to climate shocks, the CSP incorporates climate-smart agriculture, disaster risk management, and investments in renewable energy. These measures are expected to safeguard livelihoods while addressing social challenges such as child stunting, which affects over one-third of children under five.
Regionally, the Bank will back cross-border infrastructure links to South Africa, support Lesotho’s participation in the African Continental Free Trade Area (AfCFTA), and strengthen integration into regional value chains, particularly agro-processing.
The AfDB said the new strategy is designed to reduce economic isolation, expand business opportunities, and create sustainable jobs, positioning Lesotho for stronger and more inclusive growth.
