Analysis by Region - Africa

Analysis by Region - Africa

Phase II of the Lesotho Highlands Water Project (LHWP-II) will be the heartbeat of economic growth over 2023-2029, provided that construction targets are met in accordance with the project schedule. We expect that fixed investment will gain traction in the coming months to catapult GDP growth higher over the next five years, while employment opportunities created by the megaproject should strengthen private sector consumption. However, the support to GDP growth will be tempered by a sizeable widening of the net external trade shortfall. Mindful of these opposing forces, we have increased the 2023 GDP growth forecast from 1.2% to 1.5%.