Mozambique Economy Profile 2009

Economy - overview

At independence in 1975, Mozambique was one of the world's poorest countries. Socialist mismanagement and a brutal civil war from 1977-92 exacerbated the situation. 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, have led to dramatic improvements in the country's growth rate. Inflation was reduced to single digits during the late 1990s, and although it returned to double digits in 2000-06, in 2007 inflation had slowed to 8%, while GDP growth reached 7.5%. 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, Mozambique remains dependent upon foreign assistance for much of its annual budget, and the majority of the population remains below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force. A substantial trade imbalance persists although the opening of the Mozal aluminum smelter, the country's largest foreign investment project to date, has increased export earnings. At the end of 2007, and after years of negotiations, the government took over Portugal's majority share of the Cahora Bassa Hydroelectricity (HCB) company, a dam that was not transferred to Mozambique at independence because of the ensuing civil war and unpaid debts. More power is needed for additional investment projects in titanium extraction and processing and garment manufacturing that could further close the import/export gap. Mozambique's once substantial foreign debt has been reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives, and is now at a manageable level. In July 2007 the Millennium Challenge Corporation (MCC) signed a Compact with Mozambique; the Compact entered into force in September 2008 and will continue for five years. Compact projects will focus on improving sanitation, roads, agriculture, and the business regulation environment in an effort to spur economic growth in the four northern provinces of the country.

GDP (purchasing power parity)

$18.94 billion (2008 est.)
$17.79 billion (2007 est.)
$16.62 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$9.654 billion (2008 est.)

GDP - real growth rate

6.5% (2008 est.)
7% (2007 est.)
8.5% (2006 est.)

GDP - per capita (PPP)

$900 (2008 est.)
$900 (2007 est.)
$800 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 23.5%
industry: 30.9%
services: 45.6% (2008 est.)

Population below poverty line

70% (2001 est.)

Labor force

9.65 million (2008 est.)

Labor force - by occupation

agriculture: 81%
industry: 6%
services: 13% (1997 est.)

Unemployment rate

21% (1997 est.)

Household income or consumption by percentage share

lowest 10%: 2.1%
highest 10%: 39.2% (2003)

Distribution of family income - Gini index

47.3 (2002)
39.6 (1997)

Investment (gross fixed)

24.9% of GDP (2008 est.)

Budget

revenues: $2.79 trillion
expenditures: $3.268 trillion (2008 est.)

Public debt

21.4% of GDP (2008 est.)
22.2% of GDP (2007 est.)

Inflation rate (consumer prices)

10.3% (2008 est.)
8.2% (2007 est.)

Central bank discount rate

NA% (31 December 2008)
9.95% (31 December 2007)

Commercial bank prime lending rate

NA% (31 December 2008)
19.52% (31 December 2007)

Stock of money

$NA (31 December 2008)
$1.261 billion (31 December 2007)

Stock of quasi money

$NA (31 December 2008)
$1.467 billion (31 December 2007)

Stock of domestic credit

$NA (31 December 2008)
$877.2 million (31 December 2007)

Industries

food, beverages, chemicals (fertilizer, soap, paints), aluminum, petroleum products, textiles, cement, glass, asbestos, tobacco

Industrial production growth rate

9% (2008 est.)

Electricity - production

14.62 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 2.9%
hydro: 97.1%
nuclear: 0%
other: 0% (2001)

Electricity - consumption

9.555 billion kWh (2006 est.)

Electricity - exports

12.83 billion kWh (2006 est.)

Electricity - imports

9.839 billion kWh (2006 est.)

Oil - production

0 bbl/day (2007 est.)

Oil - consumption

14,390 bbl/day (2006 est.)

Oil - imports

13,240 bbl/day (2005)

Oil - exports

0 bbl/day (2005)

Oil - proved reserves

0 bbl (1 January 2006 est.)

Natural gas - production

1.65 billion cu m (2006 est.)

Natural gas - consumption

1.45 billion cu m (2006 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

0 cu m (2007 est.)

Natural gas - proved reserves

127.4 billion cu m (1 January 2008 est.)

Current Account Balance

-$975 million (2008 est.)
-$785.3 million (2007 est.)

Agriculture - products

cotton, cashew nuts, sugarcane, tea, cassava (tapioca), corn, coconuts, sisal, citrus and tropical fruits, potatoes, sunflowers; beef, poultry

Exports

$2.653 billion (2008 est.)
$2.412 billion (2007 est.)

Exports - commodities

aluminum, prawns, cashews, cotton, sugar, citrus, timber; bulk electricity

Exports - partners

South Africa 17.3%, Italy 14.9%, Spain 11.4%, Belgium 11.1%, UK 5.3%, China 4.9%, Zimbabwe 4.6% (2008)

Imports

$3.458 billion (2008 est.)
$2.811 billion (2007 est.)

Imports - commodities

machinery and equipment, vehicles, fuel, chemicals, metal products, foodstuffs, textiles

Imports - partners

South Africa 34.3%, Australia 8.4%, China 6.1%, US 5% (2008)

Reserves of foreign exchange and gold

$1.606 billion (31 December 2008 est.)
$1.445 billion (31 December 2007 est.)

Debt - external

$4.332 billion (31 December 2008 est.)
$4.189 billion (31 December 2007 est.)

Market value of publicly traded shares

$NA

Economic aid - recipient

$1.286 billion (2005)

Currency (code)

MZM

Currency (code)

metical (MZM)

Exchange rates

meticais (MZM) per US dollar - 24.125 (2008 est.), 26.264 (2007), 25.4 (2006), 23,061 (2005), 22,581 (2004)
note: in 2006 Mozambique revalued its currency, with 1000 old meticais equal to 1 new meticais

Fiscal year

calendar year