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Modelling The Lesotho Economy: A Social Accounting Matrix Approach

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  • Bahta, Yonas Tesfamariam

Abstract

Using a 2000 Social Accounting Matrix (SAM) for Lesotho, this paper investigates the key features of the Lesotho economy and the role played by the agricultural sector. A novel feature of the SAM is the elaborate disaggregation of the agricultural sector into finer subcategories. The fundamental importance of agriculture development emerges clearly from a descriptive review and from SAM multiplier analysis. It is dominant with respect to income generation and value of production. It contributes 23 percent of gross domestic product and 12 percent of the total value of production. It employs 26 percent of labour and 24 percent of capital. The construction sector has the highest open SAM output multiplier (1,588) and SAM output multiplier (1.767). The household multipliers indicate that in the rural and urban areas, agriculture and mining respectively generate most household income. Agriculture has the highest employment coefficient. Agriculture and mining sectors also have the largest employment multipliers in Lesotho.

Suggested Citation

  • Bahta, Yonas Tesfamariam, 2013. "Modelling The Lesotho Economy: A Social Accounting Matrix Approach," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 1(1), pages 1-14, July.
    • Handle: RePEc:ags:ijfaec:156142
    DOI: 10.22004/ag.econ.156142
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    1. Channing Arndt & Henning Tarp Jensen & Finn Tarp, 2000. "Structural Characteristics of the Economy of Mozambique: A SAM-based Analysis," Review of Development Economics, Wiley Blackwell, vol. 4(3), pages 292-306, October.
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    Cited by:

    1. Bahta, Yonas Tesfamariam & Groenewald, Johannes Andries, 2015. "The Potential Impact Of A Southern African Common External Tariffs Regime On The Economy Of Lesotho," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(2), pages 1-15, April.

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