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Southern Africa is particularly susceptible to climate variability and drought and is increasingly being threatened by desertification processes, degradation of land and water resources and loss of biodiversity. Although rainfed farming is a high-risk enterprise, it is also a way of life and people are committed to making the best of the scarce resources at their disposal. However, droughts tend to reduce production to below the already marginal levels, thus threatening subsistence farming. These conditions occur where the local economy is least diversified and where almost everyone depends either directly or indirectly on agriculture. Frequent exposure to drought causes agricultural production to be out of equilibrium with the seasonal conditions, representing an inability on the part of most smallholders to adjust land use to climate variability. Thus, managing for drought is about managing for the risks associated with agriculture; managing for climate variability must become the norm rather than the exception. Farmers must either increase agricultural productivity or develop alternative sources of income if their livelihoods are to be sustained. The situation analysis presented in this paper aims to provide readers with an understanding of the people and their environment in the Limpopo River Basin in southern Africa, covering parts of Botswana, Mozambique, South Africa and Zimbabwe. It examines the biophysical, socio-economic and institutional characteristics of the basin and captures details of past programmes and practices. It concludes with a section on lessons learned and proposes options and strategies for sustainable development, with a focus on drought impact mitigation.