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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. For the first time in thirty years, GDP contracted by -1.2% in 2020 (IMF). Supported by robust growth in agriculture and mining as well as recovery in services as Covid-related restrictions were eased, economic growth resumed modestly in 2021, reaching 2.5%. It is expected to pick up to 5.3% in 2022 and further accelerate to 12.6% in 2023, boosted by the start of liquefied natural gas (LNG) production at the Coral South offshore site (IMF). However, a deterioration of the security situation in the gas-rich Cabo Delgado province, a resumption of the epidemic and the occurrence of natural disasters are downside risks.
As Mozambique was still pursuing its reconstruction efforts after the passage two cyclones, the economy contracted sharply due to the Covid-19 pandemic. The government put in place emergency measures such as increasing health spending, strengthening social protection to the most vulnerable, and supporting micro, small, and medium-sized businesses (IMF), and benefited from emergency funding from the IMF. This prompt and effective response helped the economy to recover in 2021. However, public deficit widened due to increased expenditures linked to the security and humanitarian situation in the north of the country, Covid-related spending and a reform of public sector remuneration (IMF). It amounted to an estimated -6.2% GDP in 2021, and is projected to decrease to -4.5% GDP in 2022 (Coface). Primary fiscal balance is expected to be reached in 2026, after LNG revenues increase (IMF). Public debt, which was already very high, further increased to 133.6% GDP in 2021 (IMF). It is expected to slowly decrease to 127.6% GDP in 2022 and 115.3% GDP in 2023 (IMF), remaining at worrying levels. Progress has been made in debt restructuring but Mozambique remains over-indebted. Inflation increased from an estimated 3.1% in 2020 to 6.2% in 2021, due to seasonal factors, supply-chain constraints and international food and fuel price increases (IMF). Tight monetary stance has helped keep inflation within the central bank’s target of less than 10%. According to IMF estimates, inflation is expected to reach 6.4% in 2022 before declining to 5.5% in 2023. Although foreign exchange and metical reserves have stabilized, the large current account deficit exposes the country to external shocks. The government’s priorities are fiscal consolidation and debt reduction. The 2022 budget includes spending cuts, and the authorities hope to improve tax revenue. A project to create a sovereign wealth fund fuelled by hydrocarbon revenues could help improve the management of the country's resources. The country is holding talks with the IMF for an extended credit facility to help ease its financing burden.
Unemployment rate was estimated at 3.4% in 2020 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 | 2023 | 2024 |
---|---|---|---|---|---|
GDP (billions USD) | 14.16 | 15.78 | 17.87 | 19.62 | 21.76 |
GDP (Constant Prices, Annual % Change) | -1.2 | 2.3 | 3.7 | 4.9 | 8.2 |
GDP per Capita (USD) | 454 | 492 | 542 | 579 | 624 |
General Government Gross Debt (in % of GDP) | 120.0 | 106.4 | 102.4 | 102.6 | 99.8 |
Inflation Rate (%) | 3.1 | 5.7 | 11.3 | 8.6 | 8.2 |
Current Account (billions USD) | -3.87 | -3.62 | -8.20 | -7.78 | -8.45 |
Current Account (in % of GDP) | -27.3 | -22.9 | -45.9 | -39.6 | -38.8 |
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 13th largest producer of cassava and the 18th producer of oilseeds (FAO, 2020). Although agriculture employs 70% of the country's active population, it represents only 25.6% of GDP (World Bank, 2020). 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 21.8% of the country's GDP and employs 9% of the active population.
The service sector represents 41.5% of GDP, and accounts for more than one fifth of total employment (21% of GDP). 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.
The COVID-19 pandemic caused significant disruptions, impacting mainly the services, transport, agriculture, manufacturing and communications sectors (IMF).
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
See the country risk analysis provided by Coface.
Mozambique is open to foreign trade, which represents more than 116% of the country's GDP (World Bank, 2019). 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 natural resources (aluminium, coke and coal, electrical energy, hydrocarbons, titanium, gemstones), tobacco and sugar. Mozambique imports hydrocarbons, metal products (aluminium), electrical energy, vehicles, boats, foodstuffs (rice, wheat, and fish), cements and medications.
Mozambique's main customers are South Africa, India, the United Kingdom, China, Italy and the Netherlands. Its main suppliers are South Africa, China, India, the United Arab Emirates, Singapore and Portugal (Comtrade). 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, will delay LNG projects.
Mozambique's trade balance is negative and is expected to remain negative until exports of coal and gas to Asia develop. It increased recently due the capital goods imports related to reconstruction and liquefied natural gas projects. In 2020, merchandise imports decreased to USD 6.47 billion, while exports slowed down to USD 3.59 billion. Imports of services reduced to USD 2.38 billion, while exports only reached USD 764 million (WTO). The trade deficit in goods amounted to USD -2.29 billion, and it reached USD -4.03 billion including services (World Bank). In 2022, a rebound in coal and aluminium exports is expected, and the start of LNG production at the Coral South offshore site should strengthen exports from June 2022 (Coface). Capital goods imports are expected to increase but the suspension of LNG projects could impact imports.
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) |
2021 |
---|---|
South Africa | 16.7% |
India | 15.7% |
Netherlands | 11.0% |
China | 9.6% |
United Kingdom | 7.3% |
See More Countries | 39.7% |
Main Suppliers (% of Imports) |
2021 |
---|---|
South Africa | 26.1% |
China | 11.0% |
India | 8.6% |
United Arab Emirates | 8.3% |
Singapore | 6.2% |
See More Countries | 39.8% |
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
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.
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Latest Update: March 2023