Economy of Mozambique

By | April 28, 2022

After the country gained independence, the economy fell into complete decline and to the middle. According to historyaah, 1990s was in a state of stagnation. Now the process of economic recovery is underway, but it has not yet reached the level of 1974, although the growth rate is very high (in 1993-2001, an average of 7.2% per year). Due to a catastrophic flood in 2000, they fell to 2.1%, but in 2001 GDP increased by 13.9% and amounted to $ 4 billion, i.e. $230 per capita. Economically active population (1997) 7.4 million people, unemployment 21%. Inflation 10% (2001). Distribution of GDP by sectors of the economy (2000,%): agriculture – 33, industry – 25, services – 42. Employment by sectors (1997,%): agriculture – 81, industry – 6, services – 13. The recovery of manufacturing industries has begun. industries that were based on the processing of agricultural raw materials, – sugar and flour mills, vegetable oil production. In addition to food industry enterprises, a cement plant, a fertilizer plant, a textile factory, and ceramic workshops have been restored. However, by 2001, production in these traditional Mozambican industries had not reached pre-war levels, with the exception of the sugar industry, where it was surpassed. Of the new branches of the food industry, it should be noted the commissioning of two breweries, factories for cleaning cashew nuts. There are also small enterprises producing glass, paper, car tires, and railway cars. In 2000, the Fiat car assembly plant began operating; it will produce 300 cars a year, i.e. 10% of cars bought in the country. The first steps have been taken in the creation of the metallurgical industry. In 2001, the first phase of an aluminum plant worth $1.3 billion was put into operation. Investors are South African corporations (74%) and Japanese Mitsubishi (26%). Designed for the production of 500 thousand tons of metal per year, it will become one of the largest in the world. The plant operates on South African raw materials, and in the future it will switch to Mozambican bauxite. In 1998, an agreement was signed on the construction also near Maputo of a ferrous metallurgy plant worth $2.5 billion and with a capacity of 4 million tons of steel per year.

This project has agreed to finance a foreign consortium. It would give an impetus to the start of exploitation of the gas field in Panda, because it is envisaged that the plant will operate on gas. Construction was supposed to start in 2000, but there were technical difficulties in finalizing the project. In 2000, it was revised to reduce cost and power: productivity – 2 million tons, and the volume of investments – 1.1 billion US dollars. In 1999 the South African company J.K.I. and Mitsubishi signed an agreement with the government to build a direct reduction plant in Beira. Its cost is 800 million US dollars. The project includes the construction of a sea pier. The plant will also operate on gas from the Teman field, which is licensed by the South African corporation SASOL. In 1994-2000, the annual growth of the manufacturing industry averaged 8.5%. In the beginning. 21st century a faster pace is expected due to the restoration of transport infrastructure and the commissioning of metallurgical plants. The share of the mining industry in GDP in 2001 did not exceed 0.3%. The civil war led to the closure of the few operating mines and mines. Mine in Moatice, which produced 600 thousand tons of tons of coal per year, flooded, and in 2000 production amounted to 16 thousand tons. A project has been developed to restore the mine and related infrastructure. It provides for an increase in production to 3 million tons, which requires a loan of 600 million US dollars. The loan will be repaid at the expense of coal exports.┬áSee ehistorylib for more about Mozambique history.

In 2000, a corresponding agreement was concluded between the government and a foreign consortium, but the project cannot be implemented without the restoration of the railway connecting Moatice with Beira, and the expansion of the capacity of the coal loading terminal in the port of Beira from 0.4 million to 1.2 million tons, for which another $500 million is required. In 2001, the EU agreed to contribute US$72 million to rehabilitate the infrastructure, but creditors for the missing amount have yet to be found. The government has set up a Mozambican-Irish joint venture to mine 5,000 tons of oil. tons per year of very pure graphite (98% carbon) and is negotiating the creation of another joint venture for the extraction of titanium in the province of Nampula (project cost $ 150 million). Mining of a small amount of tantalite has begun. Many foreign firms have expressed interest in a very large titanium mine discovered in the Gaza province, and, according to the Minister of Mineral Resources and Energy, its operation could begin in mid. 2000s The English corporation Lonro started gold mining (50 kg in 1999) and plans to increase it to 240 kg. An Israeli company mines emeralds and garnets. In 2002, an Italian company began the restoration of a marble quarry in Montepuese. Before independence, agriculture provided the country’s food needs and 80% of exports. During the civil war, 80% of the peasants fled from the Zambezi Valley – the breadbasket of the country. Before 1995 food was imported; the share of agricultural products in exports does not exceed 25%. Only 5% of the territory is used for agriculture. Main food crops (thousand tons, 2000): cassava (5362) and corn (1019). Rice (151), sorghum (252), bananas (59), cotton (23), cashew nuts (58), sugar cane (397), coca nuts (300), copra, sisal, fruits and vegetables are also grown. Animal husbandry plays a secondary role in the economy of the Mozambicans. Its development is hindered by the tsetse fly, which is common in 2/3 of the country. The main area of animal husbandry is the province of Gaza, where there are more than 500,000 heads of cattle (in total, 1.3 million heads in the country, 2000). Since 1994, there has been an increase in agricultural production, an average of 4.8% per year, and in 1998 the increase was 8%. In 1998, a five-year program for the restoration of agriculture (Proagri) was developed, for which Western investors allocated 200 million US dollars, and Mozambique has already received half of this amount.

Science and culture of Mozambique

Primary schools are attended by 97% of children. Center of scientific life – University. E. Mondlane in Maputo, where more than 7 thousand students study. Other scientific centers: Institute of Scientific Research, which has an astronomical and meteorological observatory, the Institute of Cotton, the Institute of Health, the Service of Geology and Mining, the Center for Information and Documentation. There are good libraries in Maputo, Nampula and other cities. In Maputo there are museums of ethnography and natural history, geological, historical, revolution, national art, in Beira – ethnography, in Nampula – an art gallery. Folk art is very multifaceted and diverse – music, dances, folklore, crafts. The woodcarving of the Makonde people is especially valued.

Economy of Mozambique