Economy

Mozambique

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 although it returned to double digits in 2000-03. 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 workforce. 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. Additional investment projects in titanium extraction and processing and garment manufacturing should 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.

GDP:

purchasing power parity - $21.23 billion (2003 est.)

GDP - real growth rate:

7% (2003 est.)

GDP - per capita:

purchasing power parity - $1,200 (2003 est.)

GDP - composition by sector:

agriculture: 20.1%
industry: 27.3%
services: 52.7% (2003 est.)

Investment (gross fixed):

47.8% of GDP (2003)

Population below poverty line:

70% (2001 est.)

Household income or consumption by percentage share:

lowest 10%: 2.5%
highest 10%: 31.7% (1997)

Distribution of family income - Gini index:

39.6 (1996-97)

Inflation rate (consumer prices):

14% (2003 est.)

Labor force:

9.2 million (2000 est.)

Labor force - by occupation:

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

Unemployment rate:

21% (1997 est.)

Budget:

revenues: $1.089 billion
expenditures: $1.269 billion, including capital expenditures of $479.4 million (2003 est.)

Agriculture - products:

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

Industries:

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

Industrial production growth rate:

3.4% (2000)

Electricity - production:

7.193 billion kWh (2001)

Electricity - production by source:

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

Electricity - consumption:

1.39 billion kWh (2001)

Electricity - exports:

5.8 billion kWh (2001)

Electricity - imports:

500 million kWh (2001)

Oil - production:

0 bbl/day (2001 est.)

Oil - consumption:

8,500 bbl/day (2001 est.)

Oil - exports:

NA (2001)

Oil - imports:

NA (2001)

Oil - proved reserves:

0 bbl (1 January 2002)

Natural gas - production:

60 million cu m (2001 est.)

Natural gas - consumption:

60 million cu m (2001 est.)

Natural gas - exports:

0 cu m (2001 est.)

Natural gas - imports:

0 cu m (2001 est.)

Natural gas - proved reserves:

63.71 billion cu m (1 January 2002)

Current account balance:

$-566 million (2003)

Exports:

$795 million f.o.b. (2003 est.)

Exports - commodities:

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

Exports - partners:

Belgium 26.5%, South Africa 14.6%, Italy 9.8%, Spain 9.6%, Germany 8.5%, Zimbabwe 4.8% (2003 est.)

Imports:

$1.142 billion f.o.b. (2003 est.)

Imports - commodities:

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

Imports - partners:

South Africa 26.7%, Australia 9.3%, US 3.9% (2003 est.)

Reserves of foreign exchange & gold:

$990 million (2003)

Debt - external:

$966 million (2002 est.)

Economic aid - recipient:

$632.8 million (2001)

Currency:

metical (MZM)

Currency code:

MZM

Exchange rates:

meticais per US dollar - 23,782.3 (2003), 23,678 (2002), 20,703.6 (2001), 15,447.1 (2000), 13,028.6 (1999)
note: effective October 2000, the exchange rate is determined as the weighted average of buying and selling exchange rates of all transactions of commercial banks and stock exchanges with the public

Fiscal year:

calendar year