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 work force. 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. In late 2005, and
after years of negotiations, the government signed an agreement to
gain Portugal's majority share of the Cahora Bassa Hydroelectricity
(HCB) company, a dam that was not transferred to Mozambique at
independence because of the ensuing civil war and unpaid debts. More
power is needed for additional investment projects in titanium
extraction and processing and garment manufacturing that could
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):
$26.18 billion (2005 est.)
GDP (official exchange rate):
$5.727 billion (2005 est.)
GDP - real growth rate:
7.5% (2005 est.)
GDP - per capita (PPP):
$1,300 (2005 est.)
GDP - composition by sector: agriculture: 26.2% industry: 34.8% services: 39% (2005 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.)