Name: Senzakahle Mazibuko

Student no: 26627477

Task: Economics 288
Lecturer: Dr Calumet Links
Unemployment in Lesotho

Unemployment poses a socio challenge, in Lesotho, a small and landlocked country nestled
amidst the mountains and bordered by South Africa. Lesotho’s unemployment rate stood at
18.04% in 2022 surpassing the average of 14.5% observed across sub–Saharan Africa (The
World Bank, 2023). The impact of unemployment reverberates through the well-being and
livelihoods of its people among individuals, women and those residing in rural areas.
Furthermore, it hinders the country’s growth and overall development. Consequently, gaining
insight into the causes and potential remedies for unemployment, in Lesotho assumes
significance.

Major causes of unemployment in Lesotho

Lesotho’s economy is heavily reliant on agriculture, which accounts for 15% of its GDP and
employs 60% of the workforce (The World Bank, 2023). However, the country faces
challenges such as droughts and floods that often disrupt activities. Most farming practices in
Lesotho are focused on subsistence with limited value addition. The industrial sector, the
textile and clothing industry is susceptible to trade fluctuations and price changes. On the
hand the services sector, which contributes 60% to Lesotho’s GDP heavily depends on
revenues from SACU (Southern African Customs Union), (The World Bank, 2023).
Unfortunately, Lesotho encounters difficulties, in diversifying its economy maintaining
competitiveness and generating employment opportunities.

Lesotho has a population of 2.3 million individuals. It experiences a high population growth
rate of 1.3% annually (The World Bank, 2023). The population is young, with around 40%
under the age of fifteen. Consequently, this leads to a dependence ratio and a significant
influx of workers into the job market each year. Unfortunately, due, to growth and
insufficient job opportunities the labour market struggles to accommodate this expanding
workforce.

Lesotho has made strides in improving access, to education achieving an enrolment rate of
82% for education and 40% for secondary education in 2020 (Statista, 2020. However, there
are concerns regarding the quality and relevance of education as indicated by performance
and high dropout rates. According to the World Bank (2023) 35% of grade 6 students
demonstrated proficiency in reading and mathematics in 2017. Additionally, the current
education system does not align with the skills required by the job market in vocational fields
resulting to further unemployment.
Lesotho’s labour market is also impacted by factors related to institutions including
regulations, on labour, systems for protection and issues of governance. According to the
Doing Business report by the World Bank Lesotho is ranked 122nd out of 190 countries in
terms of the ease of conducting business in 2020 (The World Bank, 2023). One of the
difficulties faced by employers is the inflexibility of labour regulations, such as wages, rules
regarding hiring and firing severance payments and mechanisms for resolving disputes. These
regulations result in increased costs and risks associated with hiring employees and
discourage the creation of employment opportunities.

On the hand workers encounter systems for social protection that include benefits for
unemployment, pensions, health insurance and safety nets. These systems are fragmented,
underfunded and not effectively targeted. Consequently, many workers are at risk of poverty
and vulnerability in situations such as unemployment or unexpected shocks. Additionally
concerns related to governance like instability, corruption issues continue to create
unemployment.

Workable solutions to the unemployment.

The government ought to adopt policies that promote growth and foster the diversification of
industries. These policies should aim to create a business environment reduce trade barriers
attract investment support small businesses develop infrastructure ensure responsible use of
natural resources encourage innovation and strengthen regional integration (Damane and
Sekantsi, 2018:956). By implementing these measures, we can generate employment
opportunities, across sectors. Decrease our reliance on external disruptions.

Furthermore, it is crucial for the government to invest in the development of capital by

enhancing the quality and relevance of education and training. This entails allocating
resources towards education improving teacher standards, refining curricula and assessments
expanding childhood development programs promoting lifelong learning opportunities and
aligning educational initiatives with the demands of the labour market (Mwaikusa, 2022). By
taking these steps into account we will equip our workforce with the skills for success in
today’s evolving economy and society.
Conclusion

Unemployment, in Lesotho is a persistent challenge that demands attention and concerted

efforts from all stakeholders. Unemployment arises due to a combination of factors including
demographic, educational and institutional aspects. Its detrimental effects are felt by
segments of society young people, women and those living in rural areas. Moreover, it
impedes the country’s growth and overall development. Consequently, it is crucial to
implement solutions that tackle both the demand and supply sides of the labour market.
Bibliography

Damane, M. and Sekantsi, L.P. (2018). The Sources of Unemployment in Lesotho. Modern

Economy, 09(05), pp.937–965. Available: https://doi.org/10.4236/me.2018.95060.

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