Nonetheless, Lesotho's vulnerability to drought means that over half the country's food must be imported from South Africa. Wool, mohair and hides are important exports. There are known reserves of ores and minerals, including diamonds, uranium, lead and iron ore, but little exploitation has taken place. Light manufacturing, meanwhile, has grown steadily with food and drinks, and textiles as the main products.
Tourism is now the country's principal source of foreign exchange.
The already fragile Lesotho economy was further undermined in September 1998 when large parts of the country's commercial capacity was destroyed in civil disorder. On the positive side, the first phase of the Lesotho Highlands Water Project to deliver water to South Africa and provide 60 per cent of Lesotho's electricity supply began in 1997. The new Katse Dam has improved Lesotho's economic position by increasing its power-generating capacity and in the form of fees from South Africa. South Africa is Lesotho's major trading partner and the Southern African Customs Union provides over 95 per cent of the country's imports. Lightweight suit, shirt and tie should be worn for business meetings.