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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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 and the war in Ukraine. For the first time in thirty years, GDP contracted by -1.2% in 2020 (IMF). Driven by the full lifting of COVID-related restrictions, a strong vaccination campaign and the start of liquefied natural gas (LNG) production at the Coral South offshore site, GDP growth increased by 3.7% in 2022, from 2.3% in 2021 (IMF). It is expected to further accelerate to 4.9% in 2023 and 8.2% in 2024, supported by offshore gas production and rising mining output (IMF). Among the downside risks are a deterioration of the security situation in the gas-rich Cabo Delgado province, leading to further delays to large gas projects, and the occurrence of natural disasters.

In 2022, despite a challenging global environment, Mozambique’s economy continued to recover from the pandemic-induced recession, boosted by large LNG investments. Solid revenue performance and spending restraint helped improve public finances. Budget deficit decreased from -3.7% GDP in 2021 to -3.4% GDP in 2022 (IMF). According to IMF estimates, fiscal deficit will deteriorate to -4.3% GDP in 2023 before decreasing to -3.4% GDP in 2024 and starting a medium-term consolidation. Public debt decreased from 106.4% GDP in 2021 to 102.4% GDP in 2022, but it is expected to slightly rise to 102.6% GDP in 2023 before reducing to 99.8% in 2024 (IMF). Progress has been made in debt restructuring but Mozambique remains over-indebted. Driven by global fuel and food prices and tropical storms that impacted domestic food supply, inflation soared from 5.7% in 2021 to 11.3% in 2022 (IMF). Tight monetary stance is expected to bring inflation below the central bank’s target of less than 10% in 2023 (8.6%) and 2024 (8.2%) (IMF). In May 2022, the IMF approved a three-year arrangement under the Extended Credit Facility, for about USD 456 million. This program aims to support the economic recovery, reduce public debt and financing vulnerabilities, and foster higher and more inclusive growth through structural reforms. The authorities are committed to an ambitious reform program focusing on establishing a sovereign wealth fund to transparently manage LNG wealth, mobilizing additional tax revenue, and strengthening public financial management and governance (IMF). Among the main challenges identified by the IMF are adverse climate events, a fragile security situation, governance weaknesses and debt vulnerabilities.

Unemployment rate was estimated at 3.9% in 2021 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 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 19.1621.9423.9625.7227.18
GDP (Constant Prices, Annual % Change) 4.27.05.05.04.0
GDP per Capita (USD) 581647687718738
General Government Gross Debt (in % of GDP) 95.589.792.490.287.5
Inflation Rate (%) n/a7.46.56.35.7
Current Account (billions USD) -6.30-3.51-9.41-11.13-12.26
Current Account (in % of GDP) -32.9-16.0-39.3-43.3-45.1

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

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 14th largest producer of cassava and a major producer of oilseeds (FAO, 2021). Although agriculture employs 70% of the country's active population, it represents only 27.5% of GDP (World Bank, 2021). 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 21.9% of the country's GDP and employs 9% of the active population.

The service sector represents 40.1% of GDP, and accounts for more than one fifth of total employment (21%). 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.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 70.3 9.3 20.5
Value Added (in % of GDP) 27.5 21.9 40.1
Value Added (Annual % Change) 4.4 3.9 4.4

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Mozambique Metical (MZN) - Average Annual Exchange Rate For 1 USD 63.0663.5860.3362.6069.51

Source: World Bank - Latest available data.

 

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Foreign Trade

Mozambique is open to foreign trade, which represents more than 100% of the country's GDP (World Bank, 2021). 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 coal (21.1% of total exports), aluminium (13.4%), electrical energy (8.9%), titanium (6.6%), coke (6.5%), bars of aluminium (5.8%), petroleum gas (5.7%), dried vegetables (3%) and tobacco. Mozambique imports hydrocarbons (12.2% of total imports), rice (4.4%), fluorides (3.6%), palm oil (3.4%), wheat (2.9%), motor vehicles (2.6%), electrical energy (2.5%) and medicines (2.5%) (Comtrade, 2021).

Mozambique's main customers are South Africa (16.7% of total exports), India, the Netherlands, China, India, the United Kingdom and Zimbabwe. Its main suppliers are South Africa (26.1% of total imports), China, India, the United Arab Emirates, Singapore and Portugal (Comtrade, 2021). 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, is delaying LNG projects.

Mozambique's trade balance is negative and is expected to remain negative until exports of coal and gas to Asia develop. Trade deficit increased recently due the capital goods imports related to reconstruction and liquefied natural gas projects. In 2021, merchandise imports increased to USD 8.6 billion (from USD 6.5 billion in 2020), while exports increased to USD 5.6 billion (from USD 3.6 billion in 2020). Imports of services increased to USD 2.5 billion (from USD 2.4 billion in 2020), while exports remained stable at only USD 761 million (WTO). The trade deficit in goods amounted to USD -2.25 billion, and it reached USD -3.99 billion including services (World Bank).

 
Foreign Trade Values 20182019202020212022
Imports of Goods (million USD) 6,9447,4286,4718,61814,665
Exports of Goods (million USD) 5,0124,6693,5885,5838,281
Imports of Services (million USD) 4,3102,7622,7782,5572,575
Exports of Services (million USD) 7799317818221,128

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20182019202020212022
Foreign Trade (in % of GDP) 127.2112.095.1100.2n/a
Trade Balance (million USD) -1,301-2,084-2,294-2,252-5,056
Trade Balance (Including Service) (million USD) -4,831-3,914-4,291-3,987-6,503
Imports of Goods and Services (Annual % Change) 43.4-1.5-22.42.8n/a
Exports of Goods and Services (Annual % Change) 47.9-9.5-27.07.5n/a
Imports of Goods and Services (in % of GDP) 82.379.765.768.8n/a
Exports of Goods and Services (in % of GDP) 44.932.329.331.4n/a

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20232024 (e)2025 (e)2026 (e)2027 (e)
Volume of exports of goods and services (Annual % change) -2.14.23.21.126.9
Volume of imports of goods and services (Annual % change) -18.147.511.35.3-3.2

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Member of Southern African Development Community (SADC)

Member of African Union

Member of Cotonou Agreement

Member of African Growth and Opportunity Act beneficiary country

 

Main Partner Countries

Main Customers
(% of Exports)
2022
India 21.1%
South Africa 13.6%
United Kingdom 11.9%
South Korea 6.1%
China 5.2%
See More Countries 42.2%
Main Suppliers
(% of Imports)
2022
South Korea 32.0%
South Africa 15.6%
United Arab Emirates 10.0%
China 7.2%
India 5.7%
See More Countries 29.4%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Filipe Jacinto NYUSI (since 15 January 2015; re-elected 15 October 2019)
Prime Minister: Adriano Afonso MALEIANE (since 3 March 2022)
Next Election Dates
Presidential: 2024
Assembly: 2024
Main Political Parties
The two main political parties in the country are the Mozambique Liberation Front (Frente de Libertação de Moçambique - FRELIMO), the sole legal political party until 1991 and the current leading party, which tends to be more popular in urban areas and in the north and south of the country; and the opposition party RANAMO, which is stronger in the central and coastal provinces of Manica, Sofala, Zambezia and Nampula. In total, there are also 50 smaller parties active at regional or national level. The Democratic Movement of Mozambique (MDM) is the third party represented in the Assembly of the Republic.
Executive Power
The Constitution of Mozambique gives a strong power to the President of the Republic, as he functions as the head of state, head of government, commander-in-chief of the armed forces, and as a symbol of national unity. The President is directly elected for a five-year term.
The Prime Minister is appointed by the President. His functions include convening and chairing the Council of Ministers (cabinet), advising the President, assisting the President in governing the country, and coordinating the functions of the other Ministers.
Legislative Power
Mozambique has a unicameral system: the Assembly of the Republic (Assembleia da República) has 250 members, elected for a five-year term by proportional representation.
 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Mozambique, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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