Theme: Building Strategies for Inclusive Growth
Total Budget and Revenue Sources
Total projected government revenue: M26.5 billion, reflecting a 9% increase from the previous year.
Total government expenditure: M33.6 billion, marking a 10% rise from the 2024/25 budget.
In the fiscal year 2024/2025, the economy showed resilience by achieving a growth rate of 2.5%. This growth is attributable to the construction sector which expanded by 22.5%; the services sector which registered 3.7% growth and animal farming that maintained growth at 3.5%.
However, there was a poor performance in some sectors. The mining sector contracted by 5%, manufacturing declined by 2.3% with the textiles, clothing and footwear sub-sector particularly affected showing an 8.2% decline collectively. Crop production also contracted by 5.1%.
The 3.4% growth has been projected for the performance of the 2025/2026 Budget.
As of January 2025, total government debt was sitting at M23.1 billion, with M19.3 billion in external debt (83%) and M3.8 billion in domestic debt (17%).
Revenue breakdown:
SACU receipts: M9.2 billion
Domestic taxes: M10.9 billion
Non-tax revenue: M6.4 billion
Proposed levies
2.5% levy will be charged on alcoholic products
5% levy will be added to the tobacco products
Oil levy to be increased by 10 lisente
Motor Vehicle Assurance (MVA) to be adjusted upwards by 5 lisente.
Government Plans and Proposed Projects
Water Supply & Treaty Review
Lesotho Highlands Water Treaty Review: The government will engage South Africa to renegotiate the treaty for better sustainability and improved benefits.
Water supply expansion projects:
Lesotho Lowlands Water Development Project II & III: Infrastructure work in Leribe, Mafeteng, Mohale’s Hoek, and Butha-Buthe, covering over 400,000 people.
Metolong conveyance system: Completion of water supply to 16 villages, benefiting 63,209 people.
Katse area water projects: Serving villages with 3,278 people.
Infrastructure projects
Moshoeshoe I International Airport Renovations: Phase one will be completed in 2025/26, improving passenger and cargo transport.
Katse to Thaba Tseka Road project: Construction begins in the upcoming year.
New bus terminals: To be constructed in Leribe, Berea, Mafeteng, Quthing, Thaba-Tseka, and Mohale’s Hoek.
Upgrade works at Setsoto Stadium to capacitate 22 000 people. This is to be undertaken for a two year period.
Construction of Lesotho Standards Institution (LSI) to be undertaken in the next financial year.
Energy Sector
M1.5 billion allocation to expand access to electricity and boost renewable energy.
Rural electrification programme: 18,766 households to be connected.
Expansion of solar and wind power projects in Thaba-Tseka (50MW solar) and Mohale’s Hoek (60MW wind).
Judiciary
High Court facility to be opened in Mohale’s Hoek this coming financial year.
There will be a construction of Local Courts throughout the country to improve access to justice.
Job Creation and Youth Unemployment Initiatives
Unemployment rate among youth: 39% overall, with women at 40.8%.
Private sector-driven growth: Expansion of formal employment and support for entrepreneurship.
National Volunteer Corp Programme: Practical work experience for graduates, expanding from 60 to 100 participants.
Enterprise and Business Support
M400 million allocated to the Inclusive Growth Fund (IGF) to provide access to credit, support start-ups, and foster inclusive business growth.
A portion of IGF funds will be reserved for women- and youth-led businesses.
Partnerships with commercial banks to ensure long-term sustainability of the fund.
VAT registration threshold to be increased from M850 000 to M2 million in order to support small businesses
Disability and child grants
There will be a M50 increase
Old age pension
Not adjustment will be made.
Salaries and wages
2% adjustment for civil servants across the board
Ministries budget allocation
M1.3 billion for Agriculture
M207.2 million for Tourism
M423.8 million for Trade
M81.6 million for Labour and Employment
M3.1 billion for Health
M3.3 billion for Education
M1.5 billion for Gender, Youth and Social Development
M3.2 billion for Public Works and Transport
M2.2 billion for Water sector
M1.5 billion for Energy
M381.1 million for Information and Communication Technology (ICT) sector
M717. 7 million for the Army
M176.6 million for Parliamentary Affairs
M328 million for Lesotho Electricity Company (LEC) bail-out
M69.2 million for the Directorate on Corruption and Economic Offences (DCEO)