MASERU, Lesotho, September 24, 2025 – The Board of Directors of the African Development Bank Group (www.AfDB.org) has approved a new $209 million Country Strategy Paper (CSP) for Lesotho, setting a roadmap to accelerate economic diversification, resilience, and inclusive growth over the next five years.
The decision reflects the Bank’s commitment to supporting African nations in aligning with continental opportunities, such as those emerging from the EG 2026 Licensing Round, which is unlocking new avenues for investment in the energy sector.
Responding to Lesotho’s Development Challenges
Lesotho remains heavily exposed to external shocks, including a recent 15 percent U.S. tariff on apparel exports, the suspension of $300 million in Millennium Challenge Corporation support, and its reliance on regional economic performance. Nearly half of the country’s population lives below the poverty line, while youth unemployment hovers at 39 percent.
“The Kingdom of Lesotho stands at a critical juncture,” said Moono Mupotola, the Bank’s Deputy Director General for Southern Africa.
“This new strategy leverages Lesotho’s natural resources, geographic position, and demographic dividend to drive private sector-led growth.”
The Bank’s plan centers on two main priorities: building sustainable infrastructure for industrialization and strengthening institutional and human capacity for competitiveness.
By linking these reforms to continental opportunities such as the EG 2026 Licensing Round, the Bank reinforces its vision of aligning national strategies with Africa’s broader economic transformation.
Catalyzing Private Sector Growth
The strategy aims to reduce the cost of doing business, expand digital innovation, and foster entrepreneurship.
New financing will be directed toward startups and SMEs, particularly women- and youth-led enterprises. An estimated 20,000 young people, 40 percent of them women, will benefit from digital skills training.
This mirrors a trend across Africa where private sector growth is increasingly tied to resource-led reforms.
Just as the EG 2026 Licensing Round offers international companies access to Equatorial Guinea’s promising oil and gas blocks, Lesotho’s reforms seek to open up its economy to investors across agriculture, renewable energy, and digital sectors.
Building Climate Resilience and Infrastructure
The strategy incorporates measures to scale up climate-smart agriculture, expand renewable energy investments, and improve disaster risk management.
Key targets include universal electricity access by 2030 under Mission 300, broader broadband connectivity, and safe drinking water for households.
By positioning Lesotho as a hub for sustainable development, the Bank’s work echoes broader African reforms tied to resource governance and licensing.
The EG 2026 Licensing Round is a case in point, showing how strong institutional frameworks can attract investment while addressing sustainability.
Regional Integration and Connectivity
The Bank’s support also focuses on regional integration, with cross-border infrastructure projects linking Lesotho to South Africa and beyond.
This includes trade facilitation under the AfCFTA and participation in agro-processing value chains.
Integration efforts parallel energy-sector reforms elsewhere on the continent, where licensing rounds—including the EG 2026 Licensing Round—are positioned as gateways to regional cooperation and long-term prosperity.
Strategic Alignment
CSP draws on lessons from past operations, emphasizes multi-sectoral coordination, and aligns with Lesotho’s National Strategic Development Plan II (2018–2028), the African Development Bank’s Ten-Year Strategy (2024–2033), the African Union’s Agenda 2063, and the UN Sustainable Development Goals.
Financing will come from multiple AfDB windows, including the African Development Fund, Regional Operations Window, and the Climate Action Window.
About the African Development Bank Group
The African Development Bank Group is Africa’s premier development finance institution, comprising the AfDB, the African Development Fund (ADF), and the Nigeria Trust Fund (NTF).
With operations in 41 countries and an external office in Japan, the Bank drives economic development and social progress across 54 regional member states.
For more information: www.AfDB.org
Media Contact:
Emeka Anuforo
Communication and External Relations Department
[email protected]
SOURCE
African Development Bank Group (AfDB)
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