Event

On 30 August, Lesotho’s Prime Minister Thabane was forced to flee to South Africa after soldiers surrounded his residence and police headquarters. The political unrest stems from a power struggle between Thabane, who enjoys the loyalty of the police, and Deputy Prime Minister Metsing, who is supported by the army. The apparent coup took place only one day after PM Thabane sought to replace a top military commander. Army officials deny ousting the PM and say they moved against police that were suspected to arm a political faction.

Impact on country risk

Lesotho suffered several coups after its independence in 1966. The Prime Minister’s three-party coalition was fragile and close to collapsing after he suspended the parliament in June this year. The SADC (South African Development Community) has hosted talks in Pretoria in order to try to find a peaceful settlement. After PM Thabane left the country, Deputy PM Metsing assumed government control and is expected to form a new coalition government rather quickly. Given Lesotho’s deep economic dependence on South Africa, contracts with South Africa are not expected to be cancelled under a new government, yet others might. The SADC is not likely to intervene militarily; only should violent protests erupt or in case South Africa’s water supply (coming from Lesotho) is threatened. Should the political crisis drag on and affect regional economic ties, Credendo Group will be incited to downgrade Lesotho’s political risk classifications.

Analyst: Louise Van Cauwenbergh, l.vancauwenbergh@credendogroup.com