II.  LEADING TRADE PROSPECTS FOR U.S. BUSINESS

Construction Equipment:  The Highlands Water Project continues to
require large-scale construction equipment.  Phase 1A included
need for U.S.-built tunnel boring machines (TBMs); additional
tunnel boring technology may be required for Phase 1B.  Other
public sector construction projects include roads rehabilitation
and maintenance;  basic equipment almost certainly will be
available locally, but specialized equipment needs may arise.

Health Care Equipment:  The Lesotho Government is rehabilitating
and upgrading a number of rural hospitals, with African
Development Bank support.  These projects may require basic
health care equipment in addition to consulting engineering
services.

Renewable Energy Technology:  The Lesotho Government has
expressed interest in a joint effort with the U.S. Department of
Energy and the U.S. renewable energy industry for a pilot program
involving rural applications of renewable energy technologies.
Small-scale residential and industrial applications are targeted.

Engineering and Consulting Cervices:  The LHWP involves
substantial engineering requirements;  most are contracted out,
with a minority being met in-house.  Phase 1B engineering
consulting contracts to be let over the next 12 months include a
water transfer tunnel, a new dam, and a diversion weir.

Wheat and Wheat Flour:  Lesotho produces approximately 50 percent
of its annual cereal consumption requirements and imports the
remainder.  Although the 1991-93 drought led to substantial grant
aid support in meeting food needs, a return to normal crop
patterns and a healthy government surplus means that needs will
be met largely on commercial import terms.  Lesotho is eligible
under the U.S. Department of Agriculture's Export Enhancement
Program for wheat.