Lesotho presents a spectrum of investment opportunities across pivotal sectors, underpinned by its strategic geographical positioning, abundant natural resources, and conducive policy framework. This section offers a comprehensive overview of these primary sectors, delineating their structural composition, competitive advantages, regulatory and institutional frameworks, available incentives, and principal investment prospects. Each sectoral profile furnishes prospective investors with pertinent information essential for comprehending the prevailing landscape and identifying tenable ventures.
Overview
Agriculture remains central to Lesotho’s economy and livelihoods. In 2024/25 it contributed an estimated 8% (BOS 2004) of GDP while supporting roughly 80% of households through subsistence farming. Employment data indicate that about 29 % of national jobs are in agriculture when including informal activity. Food processing (milling, dairy, meat, beverages, and horticultural packing) is expanding and offers a viable pathway for rural industrialisation and export earnings.
Sector Structure and Key Facts
- Land: ~75% of total land is agricultural (largely rangelands), while arable land is ~8.8% of total area.
- Production and trade: Key crops are maize, wheat, sorghum, potatoes, beans and vegetables; livestock includes cattle, sheep and goats. In 2024 Lesotho imported ~236,000 tons of grain (maize/wheat), highlighting supply gaps.
- Irrigation: Technical potential is ~112,500 hectares; adoption remains limited among smallholders.
- Employment: ~29% of total employment is in agriculture; the majority of rural households depend on farming incomes and own-consumption.
- Sub‑sectors: Early‑season horticulture (apples, cherries, mushrooms), aquaculture (trout in Katse/Mohale), poultry value chains, and agro‑processing (dairy, abattoirs, packhouses).
Competitive Analysis
Lesotho’s highland agro‑climate supports early‑season horticulture that reaches South African markets before competing producers, enabling price premia. Labour costs are lower than in South Africa and Botswana. Duty‑free access via SACU and AfCFTA, coupled with preferences into the US (AGOA) and EU (EPA), enhances market access. Abundant water resources underpin climate‑smart irrigation and aquaculture compared to water‑stressed regional peers.
Institutional and Legal Framework
- Ministry of Agriculture, Food Security and Nutrition – policy, extension, regulation.
- LNDC – investment facilitation and estates
- Alignment with NSDP II and related agriculture strategies.
Incentives and Support Schemes
| Incentive Type | Details |
| Reduced Corporate Income Tax | Preferential corporate tax rates for commercial farming at 10%: RSL |
| Customs and VAT Relief | Duty exemptions on selected capital equipment and VAT relief/refunds for qualifying agro‑processing exports (RSL guidance applies). |
| LNDC Support | Factory shells, serviced sites, aftercare and facilitation for agro‑processing and cold‑chain investments: LNDC |
| Finance and Grants | Development‑partner programmes (e.g., EU, World Bank, EIF/UNDP, SADP II) supporting horticulture, packhouses, standards and market access. |
| Trade Preferences | Duty‑free/regional access via SACU/SADC/AfCFTA; preferential access to US (GSP & AGOA), UK (EPA), EU (EPA). |
Key Investment Opportunities
Commercial horticulture for early‑season exports; trout aquaculture and processing; integrated poultry (hatcheries to cold‑chain); dairy processing; packhouses and certification (GlobalG.A.P.); irrigation infrastructure and input supply.
Other Investor Information:
Labour is abundant but productivity and skills need upgrading; logistics and cold chain are improving from a low base; climate variability presents yield risks, so climate‑smart practices and water‑efficient technologies are recommended.
Compliance and Participation Strategies
Partner with cooperatives and LNDC to unlock incentives and sites; integrate production with storage, packhouses and logistics; design projects around irrigation efficiency and climate resilience; align labelling/origin to leverage SACU/AfCFTA and AGOA/EPA benefits.
Key Takeaways:
- Core livelihood sector with under‑exploited commercial niches.
- Early‑season horticulture, aquaculture and agro‑processing are high‑potential.
- Market access and water endowment are key comparative advantages.
- Infrastructure, standards, and skills are the main execution risks.
Checklist for Foreign Investors:
- Secure land access/leases
- Confirm RSL/LNDC incentives
- Build JV/coop partnerships
- Plan irrigation/cold‑chain
- Implement standards/certification