The performance of Lesotho’s economy in 2012 was modest, as drought reduced agricultural production by an estimated 70%. GDP nonetheless grew by 3.8%, mainly driven by the expanding mining sector and the building industry. In the medium term, growth is expected to be only marginally higher. Given the important contribution of exports to the country’s growth and gross international reserves, the uncertain global economic environment as well as uncertainties surrounding the African Growth and Opportunity Act (AGOA) trade preferences beyond 2015 will remain critical challenges.