At midnight on the evening of 3 October 1966, the former British Protectorate of Basutoland attained its political independence and assumed the new title of Lesotho. From that time, after a period of nearly 100 years of colonial administration, the British Government officially relinquished all its formal, direct, legal and financial control of the country. Although this has not meant, as some have suggested, the complete rejection by Britain of any financial assistance and responsibility to its former dependency, it has nevertheless forced Lesotho to become to an even greater extent than ever before the economic hostage of South Africa. In the context of the present good relations between South Africa and Lesotho, the term ‘hostage’ is perhaps the wrong one to use, conveying as it does fairly strong emotional overtones. But it is clear from even the most cursory examination of the economic situation that Lesotho will become more and more economically dependent upon South Africa—irrespective of the political party in power. As an enclave of South Africa, Lesotho has always been closely integrated economically with the Republic by virtue of its peculiar geographical position.1 This, together with the country's extreme climate and inhospitable terrain, enforces an external dependence which makes nonsense of political desires for complete self-sufficiency.