By Thoboloko Ntšonyane
MASERU
The Minister of Finance and Development Planning, Dr Retšelisitsoe Matlanyane has announced the allocation of M400 million to a new inclusive growth fund aimed at spurring growth.
This transpired during the 2025/2026 budget estimates which she tabled before the joint sitting of the parliament last week.
For this year, the budget policy was presented under the theme ‘Building Strategies for Inclusive Growth’.
She reported that among the 760,230 young Basotho aged 15 to 35, approximately 145,087 were unemployed, representing 39% of youth actively seeking jobs.
The Minister further highlighted that young women faced a higher unemployment rate at 40.8% compared to 37.1% for young men.
Also, Dr Matlanyane noted that 226,857 youth had become discouraged and had given up searching for jobs altogether. These concerning findings have benefits informed by the 2024 Labour Force Survey. To address this issue, she stated that the government had focused on private sector-led growth, targeted youth programmes, and aligning skills with labour market demands.
“The Government has allocated M400 million towards the Inclusive Growth Fund, a business financing vehicle designed to promote entrepreneurship and economic inclusion. The fund will prioritise women- and youth-led enterprises, ensuring they gain access to capital to scale their businesses and create jobs.
“By leveraging commercial bank partnerships, the fund aims to enhance liquidity, reduce credit barriers, and foster long-term business sustainability,” she said.
This initiative aims to bolster some of the key sectors in the economy, the small-micro-medium enterprises (SMMEs) and the small medium enterprises (SMEs) as they are able to create employment opportunities.
She went on to show that the formal sector currently employs about 87 849 people, while the informal sector has taken the lion’s share accounting for 461 873 jobs. “This picture suggests that there is significant room for expanding job creation in formal employment spearheaded by [the] private sector, particularly in growing sectors of the economy.”
While the initiative has been welcomed by some, the government of Lesotho has faced criticism for its failure to implement strategically sustainable community projects that effectively target those who have been out of the education system for extended periods. This population remains in need of tailored economic opportunities that can facilitate their integration into the workforce.
Dr Matlanyane continued: “We must act decisively to bridge the gap between education and employment. We are confronted with the reality that our higher education system produces graduates at a faster rate than our economic absorption capacity as a country and this leads to [a] persistent unemployment crisis.”
Given the size of Lesotho’s job market, which struggles to absorb the growing number of unemployed graduates, the government has been called to focus on inclusive development strategies. Expanding vocational training, fostering entrepreneurship, and creating job opportunities in sectors like agriculture and manufacturing could provide long-term solutions.
Meanwhile, the growth funds in other countries have successfully attracted private investments and accelerated development projects, leading to improved economic resilience and growth.
Minister of Gender, Youth and Social Development, Hon Pitso Lesaoana welcomed this move saying it is poised to empower many youth and women’s led businesses.
The Growth Fund is expected to operate nationwide, targeting both urban and rural areas to ensure economic progress.