Mozambique: Economy#
At independence in 1975, Mozambique was one of the world's poorest countries. Socialist policies, economic mismanagement, and a brutal civil war from 1977 to 1992 further impoverished the country. In 1987, the government embarked on a series of macroeconomic reforms designed to stabilize the economy. These steps, combined with donor assistance and with political stability since the multi-party elections in 1994, propelled the country’s GDP from $4 billion in 1993, following the war, to about $34 billion in 2015. Fiscal reforms, including the introduction of a value-added tax and reform of the customs service, have improved the government's revenue collection abilities.In spite of these gains, more than half the population remains below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force. Citizens rioted in September 2010 after fuel, water, electricity, and bread price increases were announced. In an attempt to lessen the negative impact on the population, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures.
A substantial trade imbalance persists, although aluminum production from the Mozal Aluminum Smelter has significantly boosted export earnings in recent years. In 2012, The Mozambican Government took over Portugal's last remaining share in the Cahora Bassa Hydroelectricity Company, a significant contributor to the Southern African Power Pool. The government has plans to expand the Cahora Bassa Dam and build additional dams to increase its electricity exports and fulfill the needs of its burgeoning domestic industries.
Mozambique's once substantial foreign debt was reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives. However, in 2013, the Mozambique Tuna Company (EMATUM) issued an $850 million bond fully guaranteed by the Mozambican government primarily for the purpose of purchasing tuna boats. The government is attempting to reschedule this debt, in the expectation that a pending deal with a consortium led by a US company will provide enough revenue to pay off this debt. The pending deal has the potential to transform Mozambique’s economy and dramatically increase GDP.
Mozambique grew at an average annual rate of 6%-8% in the decade up to 2015, one of Africa's strongest performances. Mozambique's ability to attract large investment projects in natural resources is expected to sustain high growth rates in coming years although weaker global demand for commodities is likely to weaken expected revenues from these vast resources, including natural gas, coal, titanium, and hydroelectric capacity.
Economic Facts#
| GDP (purchasing power parity) | $35.31 billion (2016 est.) $33.79 billion (2015 est.) $31.7 billion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $12.05 billion (2015 est.) |
| GDP - real growth rate | 4.5% (2016 est.) 6.6% (2015 est.) 7.4% (2014 est.) |
| GDP - per capita (PPP) | $1,200 (2016 est.) $1,200 (2015 est.) $1,200 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 5% of GDP (2016 est.) 14.7% of GDP (2015 est.) 29.5% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 67.1% government consumption: 23.2% investment in fixed capital: 37.4% investment in inventories: 4.3% exports of goods and services: 31.3% imports of goods and services: -63.3% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 25.3% industry: 19.8% services: 54.9% (2016 est.) |
| Agriculture - products | cotton, cashew nuts, sugarcane, tea, cassava (manioc, tapioca), corn, coconuts, sisal, citrus and tropical fruits, potatoes, sunflowers; beef, poultry |
| Industries | aluminum, petroleum products, chemicals (fertilizer, soap, paints), textiles, cement, glass, asbestos, tobacco, food, beverages |
| Industrial production growth rate | 2.1% (2016 est.) |
| Labor force | 13.31 million (2016 est.) |
| Labor force - by occupation | agriculture: 81% industry: 6% services: 13% (1997 est.) |
| Unemployment rate | 17% (2007 est.) 21% (1997 est.) |
| Population below poverty line | 52% (2009 est.) |
| Household income or consumption by percentage share | lowest 10%: 1.9% highest 10%: 36.7% (2008) |
| Distribution of family income - Gini index | 45.6 (2008) 47.3 (2002) |
| Budget | revenues: $2.554 billion expenditures: $3.609 billion (2016 est.) |
| Taxes and other revenues | 21.2% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -8.8% of GDP (2016 est.) |
| Public debt | 100.3% of GDP (2016 est.) 75.8% of GDP (2015 est.) |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | 17.1% (2016 est.) 3.6% (2015 est.) |
| Central bank discount rate | 9.5% (17 January 2013) 3.25% (31 December 2010) |
| Commercial bank prime lending rate | 24.9% (31 December 2016 est.) 14.87% (31 December 2015 est.) |
| Stock of narrow money | $3.961 billion (31 December 2016 est.) $4.758 billion (31 December 2015 est.) |
| Stock of broad money | $7.48 billion (31 December 2015 est.) $7.871 billion (31 December 2014 est.) |
| Stock of domestic credit | $4.702 billion (31 December 2016 est.) $5.565 billion (31 December 2015 est.) |
| Market value of publicly traded shares | $NA |
| Current account balance | -$4.035 billion (2016 est.) -$5.776 billion (2015 est.) |
| Exports | $3.132 billion (2016 est.) $3.413 billion (2015 est.) |
| Exports - commodities | aluminum, prawns, cashews, cotton, sugar, citrus, timber; bulk electricity |
| Exports - partners | South Africa 24.9%, China 10.2%, Italy 8.9%, India 8.9%, Belgium 7.9%, Spain 4.4% (2015) |
| Imports | $5.151 billion (2016 est.) $7.577 billion (2015 est.) |
| Imports - commodities | machinery and equipment, vehicles, fuel, chemicals, metal products, foodstuffs, textiles |
| Imports - partners | South Africa 26.8%, China 19.3%, India 13.9% (2015) |
| Reserves of foreign exchange and gold | $1.541 billion (31 December 2016 est.) $2.582 billion (31 December 2015 est.) |
| Debt - external | $9.554 billion (31 December 2016 est.) $9.743 billion (31 December 2015 est.) |
| Exchange rates | meticais (MZM) per US dollar - 62.07 (2016 est.) 39.983 (2015 est.) 39.983 (2014 est.) 31.367 (2013 est.) 28.38 (2012 est.) |