African Development Bank outlines $209 million strategy for Lesotho with private sector focus

The African Development Bank has launched a $209 million Country Strategy Paper for Lesotho covering 2025-2030, introducing non-sovereign operations for the first time. The strategy prioritises sustainable infrastructure and institutional capacity, aiming to unlock private investment in tourism and other sectors amid fiscal pressures.

The African Development Bank Group has launched its Country Strategy Paper for Lesotho covering 2025-2030, featuring an indicative operations programme valued at $209 million, according to an official announcement. The strategy introduces non-sovereign operations for the first time in the Bank's engagement with Lesotho, signalling a push to unlock private investment across sectors including tourism.

The strategy focuses on two priority areas: developing sustainable infrastructure to support industrialisation across energy, ICT, and water, and strengthening institutional capacity to improve public-sector efficiency and private-sector competitiveness. Since beginning lending operations in 1974, the Bank has approved 68 loans and grants totalling $448 million, all previously sovereign operations.

Lesotho's economy faces vulnerabilities to external shocks, including potential slowdowns in Southern African Customs Union revenues and rising global energy prices, according to Central Bank Governor Emmanuel Maluke Letete. Government officials noted recent fiscal surpluses from SACU receipts and water royalties as evidence of reform progress.

This development matters for Southern Africa's development finance landscape, as multilateral lenders increasingly blend sovereign and non-sovereign instruments to catalyse private capital. Lesotho's natural endowments, including water resources, diamonds, and renewable energy potential, are positioned as platforms for employment growth.

The tourism sector, anchored by the Afriski Mountain Resort, is identified as a private investment opportunity. For the infrastructure and tourism industries, the strategy signals project pipelines in energy, water, ICT, and hospitality sectors. Stakeholders including private investors, contractors, and development partners stand to benefit from expanded non-sovereign financing mechanisms. The strategy was developed through consultations with government, civil society, and local communities.