… This figure cements Lesotho as the second-slowest-growing economy in Sub-Saharan Africa
New World Bank projections indicate that Lesotho’s economic growth slowed to an estimated 1.3 percent in 2025 from 2.9 percent in 2024 and is expected to weaken further to just 0.7 percent in 2026, before a marginal recovery to 1.1 percent in 2027.
In 2026, Lesotho is forecast to outperform only one country in Sub-Saharan Africa (SSA), Equatorial Guinea, which is projected to grow by 0.4 percent.
This places Lesotho as the second-slowest-growing economy in the region this year.
The slowdown comes at a time when the World Bank says the global economy is proving more resilient than anticipated despite historic trade tensions and policy uncertainty.
In its latest Global Economic Prospects report published this week, World Bank projected global growth at 2.6 percent in 2026, rising slightly to 2.7 percent in 2027, largely driven by stronger performance in advanced economies, particularly the United States.
“The resilience reflects better-than-expected growth, especially in the United States, which accounts for about two-thirds of the upward revision to the forecast in 2026,” the World Bank said in a statement on Tuesday.
“Even so, if these forecasts hold, the 2020s are on track to be the weakest decade for global growth since the 1960s,” it added.
It further warned that this sluggish pace is widening the gap in living standards across the world. The report found that at the end of 2025, nearly all advanced economies enjoyed per capita incomes exceeding their 2019 levels, but about one in four developing economies had lower per capita incomes.
Lesotho risks falling deeper into this category unless drastic action is taken.
The country’s outlook stands in stark contrast to the broader Sub-Saharan African picture.
“Growth in SSA is projected to firm to 4.3 percent in 2026 and 4.7 percent in 2027, supported by stronger investment and exports. The pickup, however, is predicated on the external environment not deteriorating further and on substantial improvements in security in several countries in fragile and conflict-affected situations (FCS),” the World Bank said.
It added: “Yet, this projected growth remains below the region’s long-term average and is insufficient to make substantial progress in reducing extreme poverty.”
It further mentioned that the sharp scaling back of official development assistance (ODA) since 2024 has further constrained fiscal space and will undermine the resilience of SSA economies to adverse shocks.
Within the region, performance has diverged starkly, exposing Lesotho’s failures. South Africa, Lesotho’s largest trading partner, recorded growth of 1.3 percent in 2025, helped by more reliable electricity supply, improved business confidence and a bumper agricultural season.
Nigeria’s economy expanded by 4.2 percent, driven by growth in services such as finance and information and communication technology. Ethiopia, although slowing, still grew by a robust 7.2 percent.
While the direct exposure of most SSA economies to global trade fragmentation remains limited, the World Bank said there were notable exceptions such as Côte D’Ivoire, Kenya, Lesotho, Madagascar, Mauritius, and South Africa, which are heavily reliant on the United States markets for their goods and commodity exports.
“The baseline projections assume that current levels of bilateral tariffs remain in place throughout the forecast horizon. However, the expiration of the United States’ African Growth and Opportunity Act in late 2025, which ended preferential access to the U.S. market for eligible African countries, is expected to have a significant impact on some economies unless extended,” it said.
Per capita income in SSA is projected to grow by an average of 2 percent annually in 2026-27, a slightly faster pace than envisioned in June but still insufficient to create enough jobs to keep pace with labour force growth.
Real per capita income growth is also likely to remain uneven across the region, with lack of progress particularly in countries plagued by violent conflict.
With an estimated 270 million youths in 2025, SSA faces the world’s largest rise in working-age population, yet the creation of productive jobs remains limited, yet another area where Lesotho is failing its people miserably.
“Risks to the growth outlook remain tilted to the downside. Growth could be weaker than projected if trade barriers and related uncertainty increase further, reform implementation slows, violent conflict persists or worsens, weather shocks intensify, ODA declines more rapidly, global growth weakens more than currently projected, commodity prices decline further, or global financial conditions deteriorate,” the World Bank said.
On the upside, activity in SSA could be bolstered by duty-free access to China, stronger-than-expected global growth, continued progress in regional integration, and firmer commodity prices.
Summary
- “The resilience reflects better-than-expected growth, especially in the United States, which accounts for about two-thirds of the upward revision to the forecast in 2026,” the World Bank said in a statement on Tuesday.
- The pickup, however, is predicated on the external environment not deteriorating further and on substantial improvements in security in several countries in fragile and conflict-affected situations (FCS),” the World Bank said.
- Per capita income in SSA is projected to grow by an average of 2 percent annually in 2026-27, a slightly faster pace than envisioned in June but still insufficient to create enough jobs to keep pace with labour force growth.
Authored by our expert team of writers and editors, with thorough research.
