Lesotho's fragile economy will continue to weaken as long as it is solely based on volatile textile manufacturing, whose strength comes from imports.

Being the main consumer of Lesotho's textile products, the United States of America has reduced its import capacity, thus causing the country's economic slowdown and high unemployment rates for factory workers.

The Minister of Finance and Development Planning, Dr Timothy Thahane stated that over 10 billion was pledged by government during the 2008/2009 financial year to develop agriculture to become the backbone of the country's economy.

He indicated that they are in the process of restructuring the corporate market to determine right ways of selling crops in as far as curbing global economic crisis is concerned.

Addressing members of the press on Monday, Dr Thahane said Lesotho’s economic growth continues to be affected by the Global Economic slowdown and Financial Credit Squeeze emanating from the United States (US) Mortgage Sub-Prime lending's economic growth and employment prospects, oil and food price increases.

He said that living costs increase parallel to fuel prices because of the US Sub-Prime Mortgage Financial Sector, which has crippled bio-fuels hence the problem of food prices.

The minister however indicated that government's poverty alleviation strategies are on the right track since negotiations with international organisations to help boost the budget to improve prices are bearing fruitful results.

Also present at the occasion was the Governor of the Central Bank of Lesotho, Dr Moeketsi Senaoana who showed that fuel price increases affect the global economy and things to live on such as transport, fertilisers and food will hike.

He stated that interest rates are high thus causing money lending sources to become expensive and not able to collect debts and that investors are hindered to pursue businesses since they cannot afford to pay loans.

Dr Senaoana also expressed concern over the current electricity load shedding, which he said crippled the economy since it has caused production to decrease, noting that stock market prices depend on fuel speculators who push prices in accordance with demand and supply.

He noted that Lesotho is among the 18 African countries that will receive benefits from the World Bank, which is working on mechanisms to help countries in dire need.

Source: LENA 21/07/2008