Tuesday, June 11, 2013

Money In Lesotho

Sunday Snow

From outside our door!



Hello Dear Readers,


We both hope this post finds you well as you finally move into summer. Hopefully most of you are staying out of the way of the tornados we’ve been hearing about!


We are both doing well as we continue our day to day lives and incorporating all of our wrap-up activities as well. We got our first snow last Sunday. We tried to keep warm by starting a fire in our now, sort-of-working stove and baking. It was 40 degrees in our house when we woke up this morning, but, at least no snow!


So, I’ve been meaning to write this post on money in Lesotho for quite some time so, here goes:
GDP for Lesotho is about $3.9 billion and the per capita purchasing power is $2,000/year. Lesotho is ranked 190 in the world along with The Gambia, below Micronesia, Cambodia, Mauritania and Tajikistan and just above Chad, Senegal, Kenya, North Korea and Bangladesh. The economic growth rate has been decreasing over the last few years and as of 2012 is at 4.3%.


As most of you know by now, Lesotho is actually completely encompassed by the largest economy in Africa – the country of South Africa. This, of course, has its trade-offs, these are beyond the scope of this blog. That said, a lot of money for individuals comes into Lesotho because of remittance from relatives living in other countries, primarily, South Africa. Nationally, many of you who have done some reading about Lesotho also know that it has water and diamond resources that the country exports. There is also a limited manufacturing sector, largely run by Chinese entrepreneurs and encouraged by the US market created by AGOA, this sector is largely contained in Maseru and another industrial town, Maputsoe. Of course, money also comes into the country in the form of international aid. Normal people make their money by working at jobs, though technically, with an ~50% unemployment rate this is somewhat uncommon. Typical jobs are; within the government, specialty jobs within the Ministries and whatnot included – such as health workers, nurses and whatnot (the typical nurse makes about R7000 a month), there are also policemen and soldiers (about R4,500 a month), and teachers (about R3,000 a month). There are also international NGO jobs, service jobs – such as the guys that fill up gas tanks, or are checkers at the Chinese or Indian -run supermarkets. There are also a lot of micro-enterprise entrepreneurs – women that sell fruit on the street, or even the quintessential “African street food,” small saloons(salons) that do hairbraiding and such, small shebeens where women make and sell sorghum or maize homebrew, women who sew traditional “seshoeshoe” dresses, and even people who’s sole business is selling the ubiquitous prepaid airtime often with “snacks” re-bagged Cheeto-like things. Naturally, there are other ways that people make money but those are the most common. Most of the rest is subsistence agriculture, this often includes selling raw wool to South African companies who export it to England for the manufacturing of the wool “Basotho” blanket, who then sells them back to South Africa for import into Lesotho.


As in many African countries, wealth is “secured” and represented in livestock, with cows holding the highest value ranking, and then going down to sheep and goats. These are also the animals that “men” are responsible for. Not representing wealth, so much as being staples in the household diet are pigs and chickens who are “women’s’” animals. The fields of maize, sorghum, beans and sometimes wheat, are plowed and planted by men and usually weeded by women, and harvested (I think) by everyone. Women are typically responsible for the household garden of mainly greens, beets, carrots and sometimes tomatoes. Even of the staple crops, there is rarely enough to last the household between harvests, let alone sell or export. This is largely due to poor quality soil, the unreliable weather patterns and unavailability of quality agricultural inputs or successful implementation of practices that don’t depend on them. As a result, even though Lesotho used to be a net exporter of agricultural products, it is now a net importer – mostly from South Africa, where large commercial farms are mirror images of those found in The States.


The official currency of Lesotho is the Loti or Maloti(pl) it is pegged one to one with the South African Rand (as is the currency of Swaziland). A person can spend Rand anywhere in Lesotho, but they will not take Maloti in South Africa. The value of the Rand has decreased a bit in the last two years, when we first arrived the exchange rate was about R7 for $1, now it is about R9 for $1.

Here is a sample photo of the notes... tried to take one of our money - but we didn't have any! The pictures on all of the notes are Kings Moshoeshoe and the one in the front is the current King Letsi III

So, as Peace Corps Volunteers, our stipend is about R2,200 a month, or just under $250. The idea of the Peace Corps stipend is for our income to be on par with that of our neighbors, as it is, to be truly on par with our neighbors would make most Peace Corps services an unbearable adjustment for us Americans even for the most dedicated and hardy among us (social security in Leosotho allows for those over 70 to collect R300 a month, this often supports a grandmother and several of her orphaned grandchildren). So, in remote villages, PCVs tend to be at the higher end of the income spectrum, while in towns and most certainly among any other expat, much, much lower.

Due to the common international perception, created by missionaries, the media, tourists, etc…, that skin color is a clear indicator of wealth, and the fact that most of us PCVs gear up for our 2 years in Peace Corps by buying lots of nice, new Africa gear, most Basotho don’t actually believe that we, as volunteers are not rolling in secret hoards of million dollar bills. This belief by almost every person in the country is one of the things we, as PCVs, often struggle with, every day, during our entire service. I remember one day, about a year and a half into my service and I was floored because on my walk to my morning meeting; I was asked for money,  to pay for someone else’s taxi ride and money again, within my fifteen minute walk, and at least one of these was my neighbor. I had really been hoping that after awhile people would have gotten the hang of the fact that I am not a free-for-all ATM. We get used to that though, ask most PCVs and they will usually have a few stock retorts to these requests, we do get used to it – but usually only after immense frustration. It isn’t always just money though, one day about six months in, within 5 minutes I was asked for my hat, my scarf, my skirt and my shoes! I asked my friends if I should just take off all of my clothes right then and there and give them away.


That said, I will give Lesotho its due, in my travels to other countries the skin color tax is usually much higher. Here we don’t always have to double check with locals what the price of the taxi should be, and most people don’t increase the price of their goods just for us.


To conclude, I will leave you with a few items to compare costs with, so you get an idea of the cost of living. It is usually fairly comparable, with some things being a bit cheaper (rent and local produce, when available) and some things being much more expensive (technology). I will take this opportunity to add that living on $250 a month has made us really realize how much more expensive it is to get nutritious calories – carbohydrates are the cheapest, and even we, are limited by our budget as to how much protein we can consume –we eat an embarrassing number of eggs as a result.


Rent in camptowns R300-R1000

12.5kg of maize meal (for making papa) M100

1 L of petrol R9.50

500ml of milk R6.50

19.5 kg propane R350 (for us lasts about 3.5 months for cooking only)

A loaf of bread R8.5

Washing (about 2 loads) R50

A pair of jeans at the local equivalent of Kmart R100

I phone 5 R10,000

7 minutes of talking on the phone R10

Public taxi to Maseru from our town R140

1 kg of oatmeal R26

Tray of 30 eggs R35

Roll of toilet paper (the better kind, still 1 ply) R4.50

Pizza R60

A bunch of “moroho” chard, mustard greens, 1 cup of shelled green peas R5

A cabbage R8

An apple R3

1 kg of Peanut Butter R45

1kg of beef hamburger R65

1 kg of lentils R10

1 quart of Maluti beer (like Bud lite) R11

5L of wine R120

Going to wash

One of my favorite things to do to deconstruct the perception of life in America being all  milk and honey, where money grows on trees with no work necessary (like in the movies), is to tell people that just for rent when we return, will cost fully half of my income, sometimes I talk about the cost of my education, or that to dry a load of clothes costs about $3 or almost R30 and your neighbors will look at you like a crazy person if you just hang it on your fence outside to dry…. At that point most people say that they would be happy to go there and visit, just to see this crazy-expensive place, and then I tell them that a plane ticket is about R25,000 to R30,000!

Me and 'M'e Matumelo

All our best and wishes for prosperity from Lesotho,

Carol and Shane

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