The Kingdom of Lesotho is a landlocked country and the only one in the world which is completely surrounded by another (South Africa). Apart from a number of European countries, Lesotho is one of the few other constitutional monarchies in the world. The current Head of State is King Letsie III.
Lesotho is confronted by many challenges such as food security, HIV/AIDS, inequality, unemployment and climate change, as well as the capacity and resource constraints of the country's public administration. Poverty remains widespread and affects over 50% of the population, with around 30% living below the poverty line, while food insecurity is worsened by high food prices. Meanwhile subsistence agriculture has been badly affected by large scale soil erosion, where climate change [44 KB] is a significant contributing factor. Unfortunately, HIV/AIDS continues to be prevalent in Lesotho, which now has the world's second highest prevalence rate among adults (after Swaziland) and, as a consequence, very high numbers of Orphans and other Vulnerable Children (Human Development Report 2014 ).
The May 2012 general elections led to Lesotho's first ever coalition government, this being also one of the first coalitions in Africa. Following a breakdown in relations between the coalition parties in mid 2014 and the resulting instability, the regional SADC body has been engaged in facilitation efforts to help Lesotho restore overall stability in the country.
Political, trade and economic relations between the EU and Lesotho are conducted within the framework of the ACP-EU Partnership Agreement (Cotonou Agreement). Following the entry into force of the Lisbon Treaty, political and policy dialogue between the EU and Lesotho now covers an increasingly broad range of thematic issues in the political, governance, development cooperation and trade domains.
The EU Delegation is the only EU diplomatic representation in Lesotho and represents a broad spectrum of EU interests in the country.
The economy of Lesotho depends heavily on both the remittances of its migrant workers and its share of the receipts from the Southern African Customs Union (SACU). Lesotho has few exploitable natural resources, with the important exception of water, which is 'exported' in very significant volumes to sustain the Gauteng Province of South Africa. Exports to the EU consist almost exclusively of raw diamonds (between €100-160 million/year) along with some textiles (EU-Lesotho trade in goods ). The official currency is the Loti which is at par with the South African Rand.
EU-Lesotho cooperation under the 11th EDF is coherent with the 'Agenda for Change' and supports the implementation of Lesotho's own 'National Strategic Development Plan' (NSDP). In this context, EU development cooperation contributes towards the reduction and eventual eradication of poverty. There is an indicative EU funding allocation of €142 million for the 11th EDF National Indicative Programme, 2014-2020, which focuses on support to three priority sectors: water, energy and governance. The EU support seeks to:
Previous EU funding under the 10th EDF, 2008-2013, amounted to €139 million (Country Strategy Paper and National Indicative Programme 2008-2013 ).
The EU Delegation in Lesotho ensures close cooperation with other donors, including EU Member States, the European Investment Bank (EIB) and other development banks. Complementary support, especially for interventions with a regional dimension, may be considered under the 11th EDF regional programme, a number of funding facilities (EU-Africa Infrastructure Trust Fund; ACP-EU Energy Facility; ACP-EU Water Facility; etc.), and the Development Cooperation Instrument (DCI) budget lines.