This report aims to provide an overviewof selected likely development impact of HumanImmunodeficiency Virus (HIV) and Acquired Immune DeficiencySyndrome (AIDS) for Lesotho. The purpose is to engage in adialogue with the Government, relevant stakeholders and thedonor community on the appropriate actions to pursue insupport of the Government's recently developed strategyon the epidemic. This report is to assist policy makers inLesotho in their effort to incorporate HIV/AIDS into theplanning process on a regular basis. As such, it is directedat officials at the ministries of finance and developmentplanning. It employs conventional demographic and economicmodels to analyze selected development impacts of HIV/AIDSon the economy, thereby providing an illustration of howthese impacts can be incorporated in the regular planningprocesses (including annual budgeting) in the finance anddevelopment ministries of the Government. It points out theneed for monitoring the progression of the epidemic throughfurther research and improvements in existing instruments.The report identifies three areas where the HIV/AIDS impactis severe and need further appropriate studies: a)household; b) public sector; and c) integration of HIV/AIDSinto planning models and decision making.