Lesotho National Budget 2018/2019 – What does it mean for the job market?

By Nvulane Nhlapo (@NvulaneNhlapo)

Photo by Olu Eletu on Unsplash
Photo by Olu Eletu on Unsplash

The Lesotho National Budget 2018/19 budget speech was themed “Pursuing job creation and restoring fiscal stability and sustainability through the consolidation of peace and stability.”

As much as we’d like to stick our heads in the sand and pretend everything in our world is sunshine and rainbows, and has nothing at all to do with our sluggish job market and job gaps, there comes a point in time when you can’t ignore the obvious.

Something odd, something weird, IS happening.

As hinted from the budget speech, Lesotho’s enrolment statistics suggests that there are about 300,000 primary and high school dropouts. Admittedly, they missed a chance to acquire life skills needed for survival and employment.

Equally important is the fact that those who had a chance to fully equip themselves through education still have no place in the job market. Even worse, up until higher education.

Here’s what the Lesotho National Budget could mean for the job market in the upcoming financial year.


Emphasis on the private sector development

The key takeaway is the approach by the government, supported by their partners and various ministries, to focus on developing areas in the private sector that have strong economic potential for competitiveness in large markets at home or abroad and that create jobs for the majority of the labour force.

The creation of jobs in the private sector will be through a thoughtful mix of macroeconomic and structural policies. This emphasis by the government on their approach means that the private sector development efforts have not typically been owned, driven and managed by the centre of government. Besides, the government has not explicitly accounted for political economy constraints in such efforts.

We previously wrote of an increasing emphasis on private sector development on our 2018 Job Market Prediction in Lesotho. Again, these are positive trends, even if there is little consensus on which policies and interventions are most likely to achieve these objectives.


Priority sectors for job creation

Through a process of consultation, Government has identified four sectors as priorities for accelerated employment generation and investment. These sectors are; commercial agriculture (meat, hides, wool and mohair, deciduous fruits and other high value cash products), manufacturing, tourism and creative arts and technology.

Interestingly, focus on commercial agriculture draws back to our 2018 Job Market Predictions. These priority sectors have a potential to drive for a more inclusive growth and will span wide demographics of youth.


Support for small businesses and entrepreneurs

For those running small businesses, the Lesotho National Budget 2018/2019 highlights efforts by the government to support local purchase of products produced by Basotho as well as providing training for small entrepreneurs. The production scale of various Lesotho products will lead to a more positive hiring sentiment.

Basotho are already in production of a diverse list of products, but many of these operate at sub-commercial scale. For example, foods, medicines, and creams produced from Lesotho’s endemic plants are produced in small quantities that do not generate much employment or profit.


The Lesotho Youth Employment Grant

The government has launched the Lesotho Youth Employment grant which is a program that offers a comprehensive solution in helping young entrepreneurs in the country to access financial assistance.

The grant will support the high potential, innovative and impactful start-up ideas and empower the existing youth and women-run enterprises to expand and access new markets or develop new products and services beyond their current limited capacities.


5 Ministries with the highest budget allocations

  • Education and Training M2.6bn; 14% of total expenditure
  • Health M2.5bn; 13.5% of total expenditure
  • Finance M1.7bn; 9.4% of total expenditure
  • Public Works and Transport M1.1bn; 6% of total expenditure
  • Water Affairs M935m; 5% of total expenditure



Focused efforts to develop sectors in a market-led way are more likely to create jobs and foster competitiveness in the global economy. Dani Rodrik has written that ‘long-term sustainable development can only be achieved with strong institutions, allowing markets to function correctly.

Consequently, it is not simple enough to do things right. It is equally important to do the right things – the things that genuinely increase Lesotho’s chances of transforming its economy.