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Mozambique’s economy recorded average growth rates above 7% of GDP over the period 2000-2016, supported by foreign investment, the rapid growth of the mining sector and the increase in coal and hydrocarbon reserves. However, the economy has slowed down, impacted by a sovereign debt crisis, the passage of tropical cyclones and more recently the Covid-19 pandemic and the war in Ukraine. For the first time in thirty years, GDP contracted by -1.2% in 2020 (IMF). Driven by the full lifting of COVID-related restrictions, a strong vaccination campaign and the start of liquefied natural gas (LNG) production at the Coral South offshore site, GDP growth increased by 3.7% in 2022, from 2.3% in 2021 (IMF). It is expected to further accelerate to 4.9% in 2023 and 8.2% in 2024, supported by offshore gas production and rising mining output (IMF). Among the downside risks are a deterioration of the security situation in the gas-rich Cabo Delgado province, leading to further delays to large gas projects, and the occurrence of natural disasters.
In 2022, despite a challenging global environment, Mozambique’s economy continued to recover from the pandemic-induced recession, boosted by large LNG investments. Solid revenue performance and spending restraint helped improve public finances. Budget deficit decreased from -3.7% GDP in 2021 to -3.4% GDP in 2022 (IMF). According to IMF estimates, fiscal deficit will deteriorate to -4.3% GDP in 2023 before decreasing to -3.4% GDP in 2024 and starting a medium-term consolidation. Public debt decreased from 106.4% GDP in 2021 to 102.4% GDP in 2022, but it is expected to slightly rise to 102.6% GDP in 2023 before reducing to 99.8% in 2024 (IMF). Progress has been made in debt restructuring but Mozambique remains over-indebted. Driven by global fuel and food prices and tropical storms that impacted domestic food supply, inflation soared from 5.7% in 2021 to 11.3% in 2022 (IMF). Tight monetary stance is expected to bring inflation below the central bank’s target of less than 10% in 2023 (8.6%) and 2024 (8.2%) (IMF). In May 2022, the IMF approved a three-year arrangement under the Extended Credit Facility, for about USD 456 million. This program aims to support the economic recovery, reduce public debt and financing vulnerabilities, and foster higher and more inclusive growth through structural reforms. The authorities are committed to an ambitious reform program focusing on establishing a sovereign wealth fund to transparently manage LNG wealth, mobilizing additional tax revenue, and strengthening public financial management and governance (IMF). Among the main challenges identified by the IMF are adverse climate events, a fragile security situation, governance weaknesses and debt vulnerabilities.
Unemployment rate was estimated at 3.9% in 2021 according to the World Bank (modeled ILO estimate). However, according to the African Development Bank, the unemployment rate was 25% in 2018, and among young people it reached 30%. Social inequalities are increasing and a large part of the population lives in poverty (over 63% according to AFDB), especially in rural areas. The northern province of Cabo Delgado, where more than 800,000 people have been displaced due to terrorism, has been particularly affected by increased food insecurity (IMF).
Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
---|---|---|---|---|---|
GDP (billions USD) | 14.16 | 15.78 | 17.94 | 19.91 | 22.23 |
GDP (Constant Prices, Annual % Change) | -1.2 | 2.3 | 4.1 | 5.0 | 8.2 |
GDP per Capita (USD) | 454 | 492 | 544 | 587 | 638 |
General Government Gross Debt (in % of GDP) | 120.0 | 107.2 | 76.1 | 102.8 | 103.1 |
Inflation Rate (%) | 3.1 | 5.7 | 9.8 | 7.4 | 6.5 |
Current Account (billions USD) | -3.87 | -3.60 | -6.46 | -2.66 | -7.69 |
Current Account (in % of GDP) | -27.3 | -22.8 | -36.0 | -13.3 | -34.6 |
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Mozambique is rich in natural resources and produces a large variety of agricultural products. It benefits from huge offshore gas fields discovered in 2010, which could turn the country into one of the main LNG producers in sub-Saharan Africa. It also has significant coal reserves and hydroelectric potential, and possesses the world’s largest reserves of tantalite. It is the 14th largest producer of cassava and a major producer of oilseeds (FAO, 2021). Although agriculture employs 70% of the country's active population, it represents only 27.5% of GDP (World Bank, 2021). Most agricultural production comes from family farms, but the sector is particularly vulnerable to natural disasters such as droughts and floods. The main crops in the country are corn, cassava, beans, rice and a variety of vegetables and oilseeds.
Mozambique’s natural resources include recently discovered gas and coal, high-quality iron ore, gold, bauxite, graphite, marble and the rare mineral tantalite. The manufacturing sector is still weak, and is dominated by the production of the Mozal aluminium smelter. Overall, the industrial sector contributes to 21.9% of the country's GDP and employs 9% of the active population.
The service sector represents 40.1% of GDP, and accounts for more than one fifth of total employment (21%). Tourism is the main industry, although it is still performing well below its potential. In addition to expanding financial services, the tertiary sector has a growing number of micro-scale retail businesses.
Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
---|---|---|---|
Employment By Sector (in % of Total Employment) | 70.2 | 8.6 | 21.2 |
Value Added (in % of GDP) | 27.5 | 21.9 | 40.1 |
Value Added (Annual % Change) | 3.4 | -0.4 | 2.9 |
Source: World Bank - Latest available data.
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Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
---|---|---|---|---|---|
Mozambique Metical (MZN) - Average Annual Exchange Rate For 1 MUR | 1.77 | 1.84 | 1.78 | 1.76 | 1.77 |
Source: World Bank - Latest available data.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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Mozambique is open to foreign trade, which represents more than 100% of the country's GDP (World Bank, 2021). It is a member of the WTO, and of the South African Development Community (SADC), and has signed trade agreements with Malawi and Zimbabwe. In February 2018, Mozambique joined the EU–SADC EPA that was signed in June 2016 by Botswana, Lesotho, Namibia, South Africa and Swaziland. The country also signed the African Continental Free Trade Agreement. The government seeks to reform its trade regulations to improve its business climate and encourage exports. Customs duties remain high and there are numerous non-tariff barriers in the country (such as slow customs clearance procedures). The country primarily exports coal (21.1% of total exports), aluminium (13.4%), electrical energy (8.9%), titanium (6.6%), coke (6.5%), bars of aluminium (5.8%), petroleum gas (5.7%), dried vegetables (3%) and tobacco. Mozambique imports hydrocarbons (12.2% of total imports), rice (4.4%), fluorides (3.6%), palm oil (3.4%), wheat (2.9%), motor vehicles (2.6%), electrical energy (2.5%) and medicines (2.5%) (Comtrade, 2021).
Mozambique's main customers are South Africa (16.7% of total exports), India, the Netherlands, China, India, the United Kingdom and Zimbabwe. Its main suppliers are South Africa (26.1% of total imports), China, India, the United Arab Emirates, Singapore and Portugal (Comtrade, 2021). Mozambique could become one of the largest exporters of natural gas in the world by 2024 (the country is home to the third largest reserve in Africa) thanks to the discovery of new reserves. The planned construction of natural gas power plants as well as the construction of a new dam should allow the country to increase its exports of electricity to neighboring countries. Export infrastructure (railways, deep water ports, liquefied natural gas plants) is also under construction, and will support exports of natural gas and coal to Asia. However, the Islamist insurgency in Cabo Delgado, a key region for gas production, is delaying LNG projects.
Mozambique's trade balance is negative and is expected to remain negative until exports of coal and gas to Asia develop. Trade deficit increased recently due the capital goods imports related to reconstruction and liquefied natural gas projects. In 2021, merchandise imports increased to USD 8.6 billion (from USD 6.5 billion in 2020), while exports increased to USD 5.6 billion (from USD 3.6 billion in 2020). Imports of services increased to USD 2.5 billion (from USD 2.4 billion in 2020), while exports remained stable at only USD 761 million (WTO). The trade deficit in goods amounted to USD -2.25 billion, and it reached USD -3.99 billion including services (World Bank).
Foreign Trade Indicators | 2017 | 2018 | 2019 | 2020 | 2021 |
---|---|---|---|---|---|
Imports of Goods (million USD) | 5,745 | 6,944 | 7,428 | 6,471 | 8,621 |
Exports of Goods (million USD) | 4,725 | 5,012 | 4,669 | 3,589 | 5,579 |
Imports of Services (million USD) | 2,963 | 4,322 | 2,780 | 2,384 | 2,478 |
Exports of Services (million USD) | 658 | 779 | 931 | 764 | 761 |
Imports of Goods and Services (Annual % Change) | -12.9 | 43.4 | -1.5 | -22.4 | 2.8 |
Exports of Goods and Services (Annual % Change) | 3.9 | 47.9 | -9.5 | -27.0 | 7.5 |
Imports of Goods and Services (in % of GDP) | 61.1 | 82.3 | 79.7 | 66.3 | 68.8 |
Exports of Goods and Services (in % of GDP) | 38.6 | 44.9 | 32.3 | 29.6 | 31.4 |
Trade Balance (million USD) | -498 | -972 | -2,084 | -2,294 | -2,252 |
Trade Balance (Including Service) (million USD) | -2,671 | -4,487 | -3,903 | -4,260 | -3,987 |
Foreign Trade (in % of GDP) | 99.7 | 127.2 | 112.0 | 95.9 | 100.2 |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
Main Customers (% of Exports) |
2022 |
---|---|
India | 21.1% |
South Africa | 13.6% |
United Kingdom | 11.9% |
South Korea | 6.1% |
China | 5.2% |
See More Countries | 42.2% |
Main Suppliers (% of Imports) |
2022 |
---|---|
South Korea | 32.0% |
South Africa | 15.6% |
United Arab Emirates | 10.0% |
China | 7.2% |
India | 5.7% |
See More Countries | 29.4% |
Source: Comtrade, Latest Available Data
Source: Comtrade, Latest Available Data
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0.9 bn USD of services exported in 2019 | |
---|---|
64.57% | |
27.10% | |
Personal travelPersonal travel | 27.10% |
2.92% | |
2.68% | |
2.50% | |
0.24% |
2.8 bn USD of services imported in 2019 | |
---|---|
42.78% | |
22.31% | |
12.15% | |
9.67% | |
5.84% | |
3.37% | |
Personal travelPersonal travel | 2.63% |
Business travelBusiness travel | 0.74% |
2.48% | |
1.36% | |
0.04% |
Source: United Nations Statistics Division, Latest Available Data
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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Latest Update: September 2023