Abstract
1. Gender inequalities in opportunities and outcomes persist in Lesotho and the growth potential from closing the gender gaps is sizable. Gender-based legal restrictions, as well as barriers in access to education, healthcare, financial services, assets, the labor market, and formalsector employment prevent women from fully and equally participating in the economy. This in turn lowers aggregate productivity and hampers the efficient allocation of talent and resources, thereby weighing down on economic growth. Eliminating gender inequality is thus macro-critical — it can boost productivity and help countries fulfill their growth potential, while enhancing economic stability and resilience.2 A 2015 study suggests that closing the gender gap of Lesotho with the ASEAN-5 countries could boost economic growth by 0.5 percentage point, which is comparable to cutting income inequality, and greater than the impact of improving infrastructure. To quantify, we selected a subgroup of ASEAN-5 countries with a strong track record of growth as the benchmark and decomposed the differences in average real GDP per capita growth between Lesotho and these fast-growing countries to determine the role that different factors play in explaining Lesotho’s growth shortfall (Figure 1).3
The Impact of Covid-19 on Gender Inequality1
1. Gender inequalities in opportunities and outcomes persist in Lesotho and the growth potential from closing the gender gaps is sizable. Gender-based legal restrictions, as well as barriers in access to education, healthcare, financial services, assets, the labor market, and formalsector employment prevent women from fully and equally participating in the economy. This in turn lowers aggregate productivity and hampers the efficient allocation of talent and resources, thereby weighing down on economic growth. Eliminating gender inequality is thus macro-critical — it can boost productivity and help countries fulfill their growth potential, while enhancing economic stability and resilience.2 A 2015 study suggests that closing the gender gap of Lesotho with the ASEAN-5 countries could boost economic growth by 0.5 percentage point, which is comparable to cutting income inequality, and greater than the impact of improving infrastructure. To quantify, we selected a subgroup of ASEAN-5 countries with a strong track record of growth as the benchmark and decomposed the differences in average real GDP per capita growth between Lesotho and these fast-growing countries to determine the role that different factors play in explaining Lesotho’s growth shortfall (Figure 1).3
Growth Differential with ASEAN5 Countries
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: IMF, World Economic Outlook; PRS Group; World Bank, World Development Indicators database; and staff estimates.Note: A bar with a negative value denotes what share of the growth shortfall in Lesotho is explained by a particular variable. For example, annual economic growth of Lesotho could be higher by approximately 0.5 percentage point if gender inequality was reduced to the level observed in ASEAN5 countries.Growth Differential with ASEAN5 Countries
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: IMF, World Economic Outlook; PRS Group; World Bank, World Development Indicators database; and staff estimates.Note: A bar with a negative value denotes what share of the growth shortfall in Lesotho is explained by a particular variable. For example, annual economic growth of Lesotho could be higher by approximately 0.5 percentage point if gender inequality was reduced to the level observed in ASEAN5 countries.Growth Differential with ASEAN5 Countries
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: IMF, World Economic Outlook; PRS Group; World Bank, World Development Indicators database; and staff estimates.Note: A bar with a negative value denotes what share of the growth shortfall in Lesotho is explained by a particular variable. For example, annual economic growth of Lesotho could be higher by approximately 0.5 percentage point if gender inequality was reduced to the level observed in ASEAN5 countries.2. The COVID-19 pandemic is disproportionately impacting women of all ages in Lesotho. Key drivers include occupational gender segregation in affected sectors, heavier unpaid care work burdens, increased gender-based violence (GBV), and possibly permanent loss of human capital.4 To ensure a timely, equitable, and sustainable post-pandemic recovery, both the underlying macro-critical structural gender inequalities, as well as the COVID-related gender-specific setbacks, should be addressed in policies and practice.
3. While female labor force participation has risen in recent years, it is typically concentrated in low-skilled jobs and those sectors badly impacted by the pandemic (a “she-cession”).5 Historically, a large number of Basotho men migrated to South Africa to work in the mining sector, which had a direct positive effect on the female-to-male labor force participation ratio. Yet, in the past two decades, while the South African mining industry retrenched Basotho workers, the textile and apparel industries in Lesotho took off, which further improved job opportunities for female job seekers (Figure 2). As a result, female labor force participation significantly improved, but the gender gap is still wider than in other members of the Southern African Customs Union. At the same time, while Basotho men migrate to South Africa to work in the mining sector, women have tended to migrate for work in the domestic help sector. In general, women are more likely to be employed in low-skilled jobs and dominate the labor- and service-intensive industries such as manufacturing, domestic services, wholesale and retail trade, and education—all of which have been among the sectors hardest hit by the pandemic. (Figure 3).
Labor Market
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Note: SACU and LMIC medians exclude Lesotho, and are based on latest available data for each country.Sources: Central Bank of Lesotho, Bureau of Statistics, World Development Indicators, and IMF staffLabor Market
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Note: SACU and LMIC medians exclude Lesotho, and are based on latest available data for each country.Sources: Central Bank of Lesotho, Bureau of Statistics, World Development Indicators, and IMF staffLabor Market
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Note: SACU and LMIC medians exclude Lesotho, and are based on latest available data for each country.Sources: Central Bank of Lesotho, Bureau of Statistics, World Development Indicators, and IMF staff
Employment and Growth Rates by Sector
(Female-to-male ratio; % revision)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Household Budget Survey 2017/18, and IMF staff calculations.Employment and Growth Rates by Sector
(Female-to-male ratio; % revision)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Household Budget Survey 2017/18, and IMF staff calculations.Employment and Growth Rates by Sector
(Female-to-male ratio; % revision)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Household Budget Survey 2017/18, and IMF staff calculations.4. Findings suggest an encouraging trend of narrowing gender disparity in public sector employment, but this may be due to women’s self-selection into more female-friendly environments. The small relative gender wage parity within each grade (Figure 4.A.), along with more accommodative compensation and benefit policy, including a 90-day paid maternity leave (including weekends), may have encouraged highly-educated women to seek employment as public servants. As a result, women prevail in most lower salary grades (Figure 4.B.). However, the prevalence gradually dilutes into senior positions, and a glass ceiling is forming at the highest levels.
Female Participation in Public Sector Employment
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Female Participation in Public Sector Employment
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Female Participation in Public Sector Employment
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
5. COVID-19 has also severely impacted the informal economy, which has a disproportionately large concentration of female workers. Women account for over half of informal workers and employees in health, tourism, and small businesses. Informal vendors who depend on cross-border trade and migrant domestic and industrial workers have also been negatively affected by the South African border closures, while workers in services and manufacturing have suffered losses of income due to the lockdowns and firm and factory closures. In the textiles industry, COVID-19 has disrupted supply chains and made employment, in normal times characterized by low wages and benefits, even more precarious.
6. Female access to education is impressive compared to regional peers, but the pandemic is likely to reinforce the remaining gender-specific barriers to school enrollment. Although women outperform men in terms of literacy and educational attainment, even before the pandemic they had a greater likelihood of dropping out of school primarily for family reasons. Besides costs, marriage and pregnancy are two of the top reasons for the high drop-out rates from secondary schools, particularly in the rural areas (Figure 5). COVID-related school closures are likely to compound this trend as schoolgirls are expected to attend to household chores and care for ailing family members or younger siblings, which may force them to permanently drop out. Socioeconomic inequalities may further exacerbate educational opportunities since schoolchildren from poorer households are unable to access education through digital platforms.
Reasons for Secondary School Dropouts in Rural Area
(Percent of total dropouts)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Household and Budget Survey 2017/18, and IMF staff calculations.Reasons for Secondary School Dropouts in Rural Area
(Percent of total dropouts)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Household and Budget Survey 2017/18, and IMF staff calculations.Reasons for Secondary School Dropouts in Rural Area
(Percent of total dropouts)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Household and Budget Survey 2017/18, and IMF staff calculations.7. Providing better healthcare and support for women can help further boost female labor force participation. Lesotho has a slightly larger female population than male, and it has reduced the gender disparity in sex ratio at birth and healthy life expectancy, so that the global gender gap in these two dimensions has been closed (Figure 6). However, according to the latest data, the maternal mortality rate remains high compared to regional peers with 544 deaths per 100,000 live births, relative to 391 for the East and Southern Africa region. The adolescent birth rate is 94 per 1,000 girls, the fertility rate is 3.1 children per woman, only 60.9 percent of women make their own informed reproductive health decisions, and women’s healthy life expectancy at birth is 48 years, compared to 45 for men.6 Additionally, health statistics show that in 2018, two of the top three causes of female adult admissions to hospitals were incomplete and threatened abortions, totaling 42.6 percent of female inpatients.7 These alarming health outcomes can have a significant impact on the quality of the labor force and on female labor force participation.
Global Gender Gap, 2020
(Scores, 0 – 1 = parity)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: World Economic Forum, Global Gender Gap Report 2020.Global Gender Gap, 2020
(Scores, 0 – 1 = parity)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: World Economic Forum, Global Gender Gap Report 2020.Global Gender Gap, 2020
(Scores, 0 – 1 = parity)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: World Economic Forum, Global Gender Gap Report 2020.8. Disproportionately high HIV prevalence continues to threaten female labor force participation and it may also complicate the COVID-19 response. HIV prevalence rate among women remains notably higher than that among men, and it has been increasing in recent years (Figure 7). This is partly due to GBV, particularly child marriage. The civil law and customary law coexist under the dual legal system, and provide a legal loophole for child marriage.8 The negative impacts of child marriage cascade to lower education and health outcomes for girls, with significant setbacks to economic growth: eliminating child marriage would increase long-term annual per capita real GDP growth in emerging and developing countries by 1.05 percentage points (Mitra and others 2020). Also, key legislation on protecting females from GBV, the Domestic Violence Bill, had been under consideration in Parliament since 2000, hampering women’s ability to take precautions against HIV infection. The bill is currently under consideration by the National Assembly. The estimated economic cost of violence against women and girls in Lesotho was as high as 5.5 percent of GDP in 2017 (Commonwealth Secretariat 2020). The pandemic has likely only made matters worse, as civil society organizations and the Child and Gender Protection Unit suggest that the incidence of domestic violence has escalated since the COVID-19 outbreak (UNDP 2020).
HIV Prevalence Rate
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Demographic and Health Survery.HIV Prevalence Rate
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Demographic and Health Survery.HIV Prevalence Rate
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Demographic and Health Survery.9. The authorities have been working on lifting gender-based legal restrictions, but much more remains to be done to eliminate structural gender inequalities. De jure gender equality has been achieved in property and inheritance, freedom of movement, and pensions (Figure 8, World Bank 2021). The Land Act of 2010 allows equal access to land by men and women (Figure 9), which could potentially improve female access to collateral, and therefore, access to finance. This provides an opportunity for female business owners, who make up the majority of the micro- and small-enterprise owners, to shift to formal financing and expand their businesses. According to some indicators, Lesotho is ahead of regional peers in terms of women’s financial inclusion, with the lowest gap in account ownership, 33 percent for women versus 34 for men.9 Yet, large gaps in women’s access to credit remain, as firms led by women are four times more likely than those led by men to have their loan application rejected.10 Moreover, there is a gap in credit history reporting to the Lesotho Credit Bureau: in the second quarter of 2018, below 12 percent of total credit records were relating to women.11 Due to customary law and traditional gender norms, women still face discriminatory obstacles in access to finance.
Women, Business, and the Law, 2021
(Higher score = more equality)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Women, Business and the Law, 2021.Women, Business, and the Law, 2021
(Higher score = more equality)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Women, Business and the Law, 2021.Women, Business, and the Law, 2021
(Higher score = more equality)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Women, Business and the Law, 2021.
Registered Land Leases
(Number of leases, thousands)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Land Administration Authority.Registered Land Leases
(Number of leases, thousands)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Land Administration Authority.Registered Land Leases
(Number of leases, thousands)
Citation: IMF Staff Country Reports 2022, 162; 10.5089/9798400212918.002.A005
Sources: Lesotho Land Administration Authority.10. Further reforms can improve legal equality in terms of women’s decisions to work, women’s pay, and constraints related to marriage and business ownership. Lesotho lags regional and income-group peers in terms of the laws affecting women’s work after having children. To improve on this dimension of gender equality, the authorities may consider legislating for paid parental leave of at least 14 weeks and having the government administer 100 percent of maternity leave benefits. Finally, since elements in the customary law are still discriminatory against women and girls, the dual legal system continues to present a challenge for women’s rights, for example, by creating loopholes that permit child marriages and complicating women’s equal rights to inheritance, which is not permitted under customary law. The authorities may consider aligning these legislations and implementing the existing gender equality legal frameworks, as prescribed in Lesotho’s National Strategic Development Plan II (NSDP II).12
11. More policies to ameliorate the disproportionate impact of the pandemic on women are needed. Such measures will help ensure a more equitable recovery and unlock the growth potential from reducing gender inequality. According to the UNDP COVID-19 Global Gender Response Tracker, out of eight policies instituted by the authorities to combat the effects of the pandemic, only one has attempted to view implications through a gender lens.13 Specifically, the government has pledged to launch a grant scheme of LSL50 million for micro-, small and medium-sized enterprises (MSMEs) with less than 50 employees, providing up to LSL20,000 matching grant to companies in the tourism sector, including hotels, restaurants, transport, and food sectors. The measure indirectly addresses women's economic security, as women make up about 76 percent of workers in the accommodation and food services. Other implemented measures that implicitly support women’s livelihoods include one-off three-month salary subsidies of LSL800 to 40,000 workers in the textiles industry and payments of LSL500 for registered informal-sector vendors.
12. Due to the disproportionate impact of COVID-19 on women, the authorities should consider bringing a gender lens to pandemic mitigation measures. The authorities can also reinforce efforts to mainstream gender issues by operationalizing de jure rights and regulations and implementing social and gender responsive budgeting in Public Financial Management Reform, as suggested in the NSDP II.14
References
Commonwealth Secretariat. 2020. “The Economic Cost of Violence against Women and Girls: A Study of Lesotho.” London, UK.
Mitra, P., E. Pondi Endengle, M. Pant, and L. Almeida. 2020. “Does Child Marriage Matter for Growth?” IMF Working Paper No. 20/27.
United Nations Development Program (UNDP). 2020. “Socio-Economic Impact of COVID-19 on Gender Equality and Women’s Empowerment.” Lesotho Policy Brief (November).
World Bank. 2021. Women, Business, and the Law. World Bank, Washington, DC.
Prepared by Romina Kazandjian and Zhangrui Wang.
IMF, How to Operationalize Gender Issues in Country Work, IMF Policy Paper (2018).
ASEAN-5 includes Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. For details of the model, see IMF, 2015, “Inequality and Economic Outcomes in Sub-Saharan Africa,” Sub-Saharan Africa Regional Economic Outlook (October).
UNDP-Lesotho, Socio-economic Assessment of the COVID-19 on Gender Equality and Women’s Empowerment in Lesotho, Draft Report (2020).
Ibid.
UNFPA, World Population Dashboard and Demographic Dividend Dashboard, Lesotho, 2017.
Lesotho Bureau of Statistics, Health Statistics Report 2017–2018.
The marriage age is 18 in the Child Welfare and Protection Act, and 16 in the Marriage Act, while there is no age limit in the customary law.
Global Findex Database. 2017. Women’s Digital Financial Inclusion in Africa.
World Bank. 2016. Enterprise Survey.
Credit Bureau Compuscan Second Quarter 2018.
The Government of Lesotho, National Strategic Development Plan II (NSDP II), 2018/19 to 2022/23, p.162.
UNDP COVID-19 Global Gender Response Tracker, accessed on March 30, 2021.
The Government of Lesotho, National Strategic Development Plan II (NSDP II), 2018/19 to 2022/23, p.143.
