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Economy Of Mozambique | The Recovary of Mozambique Economic Growth | Petroleum |
Agriculture
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adminafrica on 31 March, 2008 11:42:00
 
The legacy of war
In 1990, following centuries of manipulative colonial rule, decades of guerrilla
civil warfare and years of centrally-planned economic policies, the economy of
Mozambique was in an understandably dreadful state. The country was reckoned the
very poorest in the world.
Reform and rebuild
By the time peace was declared in 1992, the Frelimo government had abandoned its
Marxist policies and was implementing a sequence of reforms: market-based
economic policies and a commitment to maintaining macroeconomic stability
through fiscal and monetary discipline.
From 1990, the Mozambican economy has been among the fastest-growing in the
world, with an average annual GDP growth of about 8%. The cyclone and
devastating floods of early 2000 reduced the economic growth for that year to
2.1%, but the country bounced back in some style - GDP growth approximated 14%
in 2001.
Unfortunately the country's meteoric growth comes off an extremely small base.
In 1997 Mozambique's per capita GNP was still the lowest in the world at US$90,
and much of the country's health and education infrastructure had yet to be
rebuilt from almost nothing. But sound economic management, massive
international debt relief and great investment in human capital have been quite
successful in alleviating poverty in the country.
Huge potential
Endowed with rich and extensive natural resources, Mozambique's present day
economy is one of huge potential. The country's economy is based largely on
agriculture, which employs roughly 80% of the country's population in mostly
subsistence operations.
Agriculture makes up around 25% of GDP, with fast-growing industry (mainly food
and beverages, chemical manufacturing, and aluminium and petroleum production)
contributing 35% and services almost 40%. Imports still slightly overshadow
exports, but the gap is closing. The country's tourism sector is growing, but
still performing well below its potential.
The government has taken steps to make Mozambique as attractive as possible to
foreign direct investment, upon which it is heavily dependent. South Africa is
Mozambique's main trading partner and source of FDI, but Belgium, Spain and
Portugal also figure among the country's most important partners.