ECONOMY MOZAMBIQUE : OUTSTANDING PERFORMANCE
Almost five centuries as a Portuguese colony came to a close with Mozambique’s independence in 1975. At its independence, 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, boosted Mozambique’s GDP from $4 billion in 1993 to $31 billion in 2014.
Fiscal reforms, including the introduction of a value-added tax and reform of the customs service, have improved the government’s revenue collection abilities. Mozambique grew at an average annual rate of 6%-8% in the decade up to 2014, one of Africa’s strongest performances.
Foreign Direct Investments (FDI) contributed strongly to the economic over-achievement of Mozambique (as presented in the graph on the right). The African continent grew 5% last year and is currently 1.5 points higher than global economic growth. Mozambique was the fifth highest African country in terms of number of projects with foreign direct investments in 2014.
8% GROWTH ANNUALLY IN THE NEXT DECADE
The recent discovery of huge reserves of minerals resources, such as oil, gas and coal, combined with ongoing reforms and subsequent improvement of the business climate in Mozambique, provide good opportunities for the transformation of Mozambican into a Middle income economy in the years to come
Mozambique’s ability to attract large investment projects in natural resources is expected to extend high growth rates in coming years. The current increase of foreign direct investment (FDI) inflows, mostly for the extractive industry and its related industries, agriculture & agro-processing and infrastructure will drive the country’s economic growth to over 8% annually in the next decade.
GEOGRAPHY & OTHER FEATURES
Mozambique has about 26 million inhabitants. The largest concentration of inhabitants is found in its capital Maputo where some 1.8 million people live. Two other cities have more than half a million inhabitants, being Beira and Matola.
Maputo has retained its position as the most active city in the country for inward investment in terms of project numbers between 2009 and 2014, accounting for 24.68% of all inward FDI in the country during the period. Despite the capital’s ranking first on FDI project attraction, the city ranked fifth overall in the number of jobs created. Beira – Mozambique’s second largest city – recorded the greatest number of new jobs in the period, 185.55% more than Maputo.
Mozambique holds a strategic location in Southern Africa. It has a 2,700 kms long cost line. In addition it is often regarded as a main gateway to Southern Africa through its three international ports and various international airports. Together these provide access to more than five landlocked countries in the region, having over 250 million inhabitants.