Mozambique's economy opportunities

Future challenges

The International Monetary Fund (IMF) expects GDP growth to average 7.8 per cent/year between 2011 and 2015, underpinned by new large projects and spill-offs from associated services and construction sectors, as well as increased agriculture output. But broader activity outside capital-intensive export sectors remains below potential. While labour-intensive manufacturing and commercialisation of agriculture (including agro-processing) have yet to take-off, which can raise the country’s productive base.

Mozambique has successfully concluded first-generation reforms that provided macro-stability and strengthened its resilience to exogenous shocks. The World Bank commended: “Mozambique has emerged from decades of conflicts to become one of Africa’s best-performing economies. The country has enjoyed a remarkable recovery - the highest growth rate among African oil-importers.

Nonetheless, concreted efforts are needed to achieve ‘quality growth’ and catch up with Asian economies by implementing micro-reforms. Chief among these are simplifying product and services market regulations, raising human capital and technical capacities, as well as fostering a more conducive business climate.

Developing a skill-based economy, greater diversification and most importantly, closing the  ‘infrastructure gap’ is critical to improve national competitiveness. The Africa Infrastructure Country Diagnostics (AICD) estimates that Mozambique needs to spend $1.7bn a year on public infrastructure over the next decade to catch up with other developing nations.

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