Small in population and size, the Kingdom of Lesotho takes up a unique position on the African continent. Landlocked by the region’s largest economy, South Africa, the country has few exploitable natural resources and a limited agricultural potential. Poverty is multi-faceted and deeply entrenched in Lesotho, which belongs to the world's Least Developed Countries with a third of its population barely surviving under half of the poverty line. Positive development trends have been reserved but the rapidly spreading prevalence of HIV/AIDS. Around 31% of the population aged 15-49 is believed to live with the disease that is threatening the lives, livelihoods, social fabric and future of people in Lesotho.

Aid programmes

Lesotho's poverty reduction strategy is based on a well-defined development framework, emphasising the pursuit of economic growth and improving the living conditions of the poor, in particular with regard to education, health and environment, in addition to public sector reforms including the establishment of effective and sustainable local government institutions and improved public services.

The National Indicative allocation (NIP) for the 11th EDF envelope is of €142 million. The NIP will focus on the three focal sectors of Water, Energy and Governance. The selection is justified by their critical role in economic development and raising living standards and by their strong complementarities.

EU assistance to the Government of Lesotho supports poverty reduction through economic growth and better provision of basic services.. The EU’s co-operation strategy with Lesotho under the 10th EDF, presented in the Country Strategy Paper for Lesotho (2008-2013) , focuses on infrastructure, in particular water and sanitation as well as human development, predominantly through Support Programme to Orphans and Vulnerable Children contributing to fight HIV/AIDS and tuberculosis, which is crucial for the country's development. This is complemented by general budget support that is monitored against the achievement of targets specific to maintenance of stability-oriented macroeconomic policy, progress in implementation of the National Strategic Development Policy, improved public financial management and public sector reform. Furthermore, the EUsupports Government actions to consolidate the ongoing decentralization reforms, to improve justice sector and governance and strengthen non-state actors as well as support to private sector.

The original multi-annual indicative programme for Lesotho under the 10th EDF amounts to €136 million to address these priorities. The current allocation is €161.8 million, after taking into account adjustments resulting from the Mid Term and ad-hoc reviews.