Lesotho is one of the poorest countriesin Southern Africa, and has one of the highest incomeinequality in the world. Home to about 2 million people,Lesotho is surrounded by South Africa, the second largestand most industrialized economy in Africa. Lesotho generatesincome mainly by exporting textiles, water, and diamonds,and is a member of the Southern African Customs Union(SACU), the Southern African Development Community (SADC),and the Common Monetary Area (CMA). The national currency,the loti, is pegged to the South African rand.Lesotho's main trading partners are South Africa andthe United States. The CPF will seek to mitigate foursubstantial risks to the implementation of the WBG program:(a) political and governance; (b) macroeconomic; (c) climatechange and climate- induced disasters; and (d) operatingrisks (capacity and fiduciary). The lessons from the CountryAssistance Strategy Completion and Learning Report (CPS CLR)will play an important role in addressing these risks. TheCPF will give high importance to quality and risks at entryfor new operations, and continue strong monitoring andsupervision. These mitigation factors are essential forachieving sustainable results.
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