Economic overview Mozambique, in 36 editions.

One of Africa's poorest countries, with a per capita GDP of little more than $100, Mozambique has failed to exploit the economic potential of its sizable agricultural, hydropower, and transportation resources. Indeed, national output, consumption, and investment declined throughout the first half of the 1980s because of internal disorders, lack of government administrative control, and a growing foreign debt. A sharp increase in foreign aid, attracted by an economic reform policy, has resulted in successive years of economic growth since 1985. Agricultural output, nevertheless, is only at about only 75% of its 1981 level, and grain has to be imported. Industry operates at only 20-40% of capacity. The economy depends heavily on foreign assistance to keep afloat.

One of Africa's poorest countries, with a per capita GDP of little more than $100, Mozambique has failed to exploit the
economic potential of its sizable agricultural, hydropower, and
transportation resources. Indeed, national output, consumption, and
investment declined throughout the first half of the 1980s because of
internal disorders, lack of government administrative control, and a growing
foreign debt. A sharp increase in foreign aid, attracted by an economic
reform policy, has resulted in successive years of economic growth since
1985. Agricultural output, nevertheless, is at about only 75% of its 1981
level, and grain has to be imported. Industry operates at only 20-40% of
capacity. The economy depends heavily on foreign assistance to keep afloat.
The continuation of civil strife through 1991 has dimmed chances of foreign
investment, and growth was a mere 1%. Living standards, already abysmally
low, dropped by 3-4% in both 1990 and 1991.

One of Africa's poorest countries, Mozambique has failed to exploit the
economic potential of its sizable agricultural, hydropower, and
transportation resources. Indeed, national output, consumption, and
investment declined throughout the first half of the 1980s because of
internal disorders, lack of government administrative control, and a growing
foreign debt. A sharp increase in foreign aid, attracted by an economic
reform policy, has resulted in successive years of economic growth since in the late
1985. 1980s, but aid has declined steadily since 1989. Agricultural output,
nevertheless, is at about only 75% of its 1981
level, and grain has to be
imported. Industry operates at only 20-40% of
capacity. The economy depends
heavily on foreign assistance to keep afloat.
The continuation of civil
strife through 1991 has dimmed chances of foreign
investment, and growth was a mere 1%. 0.3%
in 1992. Living standards, already abysmally
low, dropped by 3-4% fell further in both 1990 and 1991. 1991-92.

One of Africa's poorest countries, Mozambique has failed to exploit the
the economic potential of its sizable agricultural, hydropower, and
transportation resources. Indeed, national output, consumption, and
investment declined throughout the first half of the 1980s because of
internal disorders, lack of government administrative control, and a growing
growing foreign debt. A sharp increase in foreign aid, attracted by an economic
economic reform policy, resulted in successive years of economic
growth in the late
1980s, but aid has declined steadily since 1989. Agricultural output,
nevertheless, Agricultural output is at about only 75% of its 1981 level, and grain has to be
be imported. Industry operates at only 20-40% of capacity. The economy depends
depends heavily on foreign assistance to keep afloat. The continuation of civil Peace accords
strife has dimmed signed in October 1992 improved chances of foreign investment, aided
IMF-supported economic reforms, and growth was a mere 0.3% supported continued economic
in 1992. Living standards, already abysmally low, fell further in 1991-92. recovery.

One of Africa's poorest countries, Mozambique has failed to exploit
exploit the economic potential of its sizable agricultural,
hydropower, and
transportation resources. Indeed, national output,
consumption, and
investment declined throughout the first half of the
1980s because of
internal disorders, lack of government administrative
control, and a
growing foreign debt. A sharp increase in foreign aid,
attracted by an
economic reform policy, resulted in successive years
of economic
growth in the late 1980s, but aid has declined steadily
since 1989.
Agricultural output is at only 75% of its 1981 level, and
grain has to
be imported. Industry operates at only 20-40% 20%-40% of
capacity. The economy
depends heavily on foreign assistance to keep
afloat. Peace accords
signed in October 1992 improved chances of
foreign investment, aided
IMF-supported economic reforms, and
supported continued economic
recovery. Elections held in 1994 diverted
government attention from the economy, resulting in slippage and
delays in the economic reform program. Nonetheless, growth in 1994 was
solid and can continue into the late 1990s given continued foreign
help in meeting debt obligations.

One of Africa's poorest countries, Mozambique
has failed to
exploit the economic potential of its sizable agricultural,
agricultural, hydropower, and transportation resources. Indeed,
national output,
consumption, and investment declined throughout the
first half of the
1980s because of internal disorders, lack of
government administrative
control, and a growing foreign debt. A
sharp increase in foreign aid,
attracted by an economic reform
policy, resulted in successive years
of economic growth in the late
1980s, but aid has declined steadily
since 1989. Agricultural output
is at only 75% of its 1981 level, and
grain has to be imported.
Industry operates at only 20%-40% of
capacity. The economy depends
heavily on foreign assistance to keep
afloat. Peace accords between
civil warring factions, signed in October 1992 1992, improved chances of
foreign investment, aided IMF-supported economic reforms, and
supported continued economic recovery. Elections held in 1994 diverted
diverted government attention from the economy, resulting in
slippage and
delays in the economic reform program. Nonetheless,
growth continued in 1994 was
solid 1994-95, and can continue into the economy should move forward in
the late 1990s 1990s, given continued foreign
help in meeting debt
obligations. One key event in 1995 was the conclusion of
negotiations with Enron of Houston, Texas, for a $700 million
project to exploit the Pande natural gas fields.

One Before the peace accord of Africa's October 1992, Mozambique
had been devastated by civil war and was one of the poorest countries, countries
on the globe. Prospects subsequently improved, and with its solid
economic performance in 1996-97, Mozambique has
failed begun to exploit the economic potential of its
sizable agricultural,
hydropower, and transportation resources. Agricultural output is at
only 75% of its 1981 level, and grain has to be imported. Industry
operates at only 20%-40% of capacity. Foreign assistance programs
help supply the foreign exchange required
to support the budget and pay for imports of goods and
services. The peace accord, signed in October 1992, has improved
Mozambique's prospects. The restoration of electrical transmission
lines to South Africa and the
completion of a new transmission line to
Zimbabwe (permitting the
giant Cahora Bassa hydropower plant to export
large amounts of
electricity), proposed construction of a natural gas
pipeline to South
Africa, and reform of transportation services will
greatly improve
foreign exchange receipts. The Mozambique and South
African governments
Governments are developing the Maputo corridor, linking the
port of
Maputo with Witbank, South Africa. In the past few years, more
than 500
700 state enterprises have been privatized, including the
country's
largest commercial bank and a number of sizable
manufacturing firms.
Other pending reform measures are the
privatization of customs operations, the reform of tax collection, collection and
the
facilitation of private enterprise in the transportation, energy,
and
telecommunications sectors.

Before the peace accord of October 1992,
Mozambique's economy was devastated by a protracted civil war and
socialist mismanagement. In 1994, it ranked as one of the poorest
countries in the world. Since then, Mozambique has undertaken a
series of economic reforms. Almost all aspects of the economy have
been liberalized to some extent. More than 900 state enterprises
have been privatized. Pending are tax and much needed commercial
code reform, as well as greater private sector involvement in the
transportation, telecommunications, and energy sectors. Since 1996,
inflation has been low and foreign exchange rates stable. Albeit
from a small base, Mozambique achieved Mozambique's economy grew at an annual 10% rate in 1997-99, one of the highest growth
rates in the world in 1997-98. world. Still, the country depends on foreign
assistance to balance the budget and to pay for a trade imbalance in
which imports outnumber exports by three five to one. one or more. The medium-term
outlook for the country looks bright, as trade and transportation
links to South Africa and the rest of the region are expected to
improve and sizable foreign investments materialize. Among these
investments are metal production (aluminum, steel), natural gas,
power generation, agriculture (cotton, sugar), fishing, timber, and
transportation services. Additional exports in these areas should
bring in needed foreign exchange. In addition, Mozambique is on track to receive a formal cancellation of a large portion of its external debt through a World Bank initiative.

Before the peace accord of October 1992, Mozambique's economy was devastated by a protracted civil war and socialist mismanagement. In 1994, it ranked as one of the poorest countries in the world. Since then, Mozambique has undertaken a series of economic reforms. Almost all aspects of the economy have been liberalized to some extent. More than 900 state enterprises have been privatized. A value-added tax, introduced in 1999, launched the government's comprehensive tax reform program. Pending are tax and much needed commercial code reform, as well as reform and greater private sector involvement in the transportation, telecommunications, and energy sectors. Since 1996, inflation has been low and foreign exchange rates relatively stable. Albeit from a small base, Mozambique's economy grew at an annual 10% rate in 1997-99, one of the highest growth rates in the world. Still, Growth slowed and inflation rose in 2000 due to devastating flooding in the early part of the year. Both indicators should recover in 2001. The country depends on foreign assistance to balance the budget and to pay for a trade imbalance in which imports greatly outnumber exports by five to one or more. exports. The medium-term outlook for trade situation should improve in the country looks bright, medium term, however, as trade and transportation links to South Africa and the rest of the region are expected to improve have been improved and sizable sizeable foreign investments are beginning to materialize. Among these investments are metal production (aluminum, steel), natural gas, power generation, agriculture (cotton, sugar), agriculture, fishing, timber, and transportation services. Additional exports in these areas should bring in needed foreign exchange. In addition, Mozambique is on track to receive has received a formal cancellation of a large portion of its external debt through a World Bank initiative. an IMF initiative and is scheduled to receive additional relief.

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 1988, 1987, the government embarked on a series of dramatic macroeconomic reforms designed to stabilize the economy and reduce government participation. economy. These steps steps, combined with the donor assistance and with political stability that has prevailed since the 1994 multi-party elections in 1994, have led to dramatic improvements in the country's growth rate fueled by foreign and domestic investments and donor assistance. rate. Inflation was brought to single digits during the same period, late 1990s although it has returned to double digits in 2000 and 2001. Foreign exchange rates have remained relatively stable. 2000-02. 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, persists although it has diminished with the opening of the MOZAL aluminum smelter, the country's largest foreign investment project. project to date has increased export earnings. Additional investment projects in titanium extraction/processing 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.

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 brought reduced to single digits during the late 1990s although it returned to double digits in 2000-02. 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.

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. work force. A substantial trade imbalance persists although the opening of the MOZAL Mozal aluminum smelter, the country's largest foreign investment project to date date, has increased export earnings. Additional 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 should 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.

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. 2000-06. 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.

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 1990s, and although it returned to double digits in 2000-06. 2000-06, in 2007 inflation had slowed to 8%, while GDP growth reached 7.5%. 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, At the end of 2007, and after years of negotiations, the government signed an agreement to gain took over 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. In July 2007 the Millennium Challenge Corporation (MCC) signed a Compact with Mozambique; the Mozambican government moved rapidly to ratify the Compact and propose a plan for funding.

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, and although it returned to double digits in 2000-06, in 2007 inflation had slowed to 8%, while GDP growth reached 7.5%. 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. At the end of 2007, and after years of negotiations, the government took over 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. In July 2007 the Millennium Challenge Corporation (MCC) signed a Compact with Mozambique; the Mozambican government moved rapidly to ratify the Compact entered into force in September 2008 and propose a plan will continue for funding. five years. Compact projects will focus on improving sanitation, roads, agriculture, and the business regulation environment in an effort to spur economic growth in the four northern provinces of the country.

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, and although it returned to double digits in 2000-06, in 2007 inflation had slowed to 8%, while GDP growth reached 7.5%. 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 more than half 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. force and smallholder agricultural productivity and productivity growth is weak. 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. At the end of 2007, and after years of negotiations, the government took over 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. In July 2007 the Millennium Challenge Corporation (MCC) signed a Compact with Mozambique; the Compact entered into force in September 2008 and will continue for five years. Compact projects will focus on improving sanitation, roads, agriculture, and the business regulation environment in an effort to spur economic growth in the four northern provinces of the country. Mozambique grew at an average annual rate of 9% in the decade up to 2007, one of Africa's strongest performances. However, heavy reliance on aluminum, which accounts for about one-third of exports, subjects the economy to volatile international prices. The sharp decline in aluminum prices during the global economic crisis lowered GDP growth by several percentage points. Despite 8.3% GDP growth in 2010, the increasing cost of living prompted citizens to riot in September 2010, after bread price increases were announced. In an attempt to contain the cost of living, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures.

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. 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 more than half 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 and smallholder agricultural productivity and productivity growth is weak. 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. At the end of 2007, and after years of negotiations, the government took over 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 electrical power capacity 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. In July 2007 the Millennium Challenge Corporation (MCC) signed a Compact compact with Mozambique; the Compact compact entered into force in September 2008 and will continue for five years. Compact projects will focus on improving sanitation, roads, agriculture, and the business regulation environment in an effort to spur economic growth in the four northern provinces of the country. Mozambique grew at an average annual rate of 9% in the decade up to 2007, one of Africa's strongest performances. However, heavy reliance on aluminum, which accounts for about one-third of exports, subjects the economy to volatile international prices. The sharp decline in aluminum prices during the global economic crisis lowered GDP growth by several percentage points. Despite 8.3% GDP growth in 2010, the increasing cost of living prompted citizens to riot in September 2010, after fuel, water, electricity, and bread price increases were announced. In an attempt to contain the cost of living, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures.

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. 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 Inspite of these gains, Mozambique remains dependent upon foreign assistance for more than half of its annual budget, and the majority in 2008 54% of the population remains remained below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force and smallholder agricultural productivity and productivity growth is weak. 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. At the end of 2007, and after years of negotiations, the government took over Portugal's majority share of the Cahora Bassa Hydroelectricity (HCB) company, Company (HCB), a dam that was not transferred to Mozambique at independence because of the ensuing civil war and unpaid debts. More electrical power capacity 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. In July 2007 the Millennium Challenge Corporation (MCC) signed a compact with Mozambique; the compact entered into force in September 2008 and will continue for five years. Compact projects will focus on improving sanitation, roads, agriculture, and the business regulation environment in an effort to spur economic growth in the four northern provinces of the country. Mozambique grew at an average annual rate of 9% in the decade up to 2007, one of Africa's strongest performances. However, heavy reliance on aluminum, which accounts for about one-third of exports, subjects the economy to volatile international prices. The sharp decline in aluminum prices during the global economic crisis lowered GDP growth by several percentage points. Despite 8.3% GDP growth in 2010, the increasing cost of living prompted citizens to riot Citizens rioted in September 2010, after fuel, water, electricity, and bread price increases were announced. In an attempt to contain lessen the cost of living, negative impact on people, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures. Real growth of more than 7% per year was achieved in 2010-12. Investment in the country's gas sector may raise Mozambique's economic growth to 8% per year through 2017.

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. Fiscal reforms, including the introduction of a value-added tax and reform of the customs service, have improved the government's revenue collection abilities. Inspite In spite of these gains, Mozambique remains remained dependent upon foreign assistance for more than half 40% of its 2012 annual budget, budget and in 2008 54% of over half the population remained below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force and smallholder agricultural productivity and productivity growth is weak. A substantial trade imbalance persists although the opening of the Mozal aluminum smelter, production from the country's largest foreign investment project to date, Mozal smelter has increased significantly boosted export earnings. At the end of 2007, and after years of negotiations, the earnings in recent years. In 2012, The Mozambican government took over Portugal's majority last remaining share of in the Cahora Bassa Hydroelectricity Company (HCB), a dam that was not transferred signficant contributor to Mozambique at independence because of the ensuing civil war Southern African Power Pool. The government has plans to expand the Cahora Bassa Dam and unpaid debts. More electrical power capacity is needed for build additional investment projects in titanium extraction and processing dams to increase its electricity exports and garment manufacturing that could further close fulfill the import/export gap. needs of its burgeoning domestic industries. 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. In July 2007 2007, the US government's Millennium Challenge Corporation (MCC) signed a compact $506.9 million Compact with Mozambique; the compact entered into force in September 2008 and will continue for five years. Mozambique. Compact projects will focus end in September 2013 and are focusing on improving sanitation, roads, agriculture, and the business regulation environment in an effort to spur economic growth in the four northern provinces of the country. Mozambique grew at an average annual rate of 9% in the decade up to 2007, one of Africa's strongest performances. However, heavy reliance on aluminum, which accounts for about one-third of exports, subjects the economy to volatile international prices. The sharp decline in aluminum prices during the global economic crisis lowered GDP growth by several percentage points. Citizens rioted in September 2010, after fuel, water, electricity, and bread price increases were announced. In an attempt to lessen the negative impact on people, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures. Real growth Mozambique grew at an average annual rate of more than 7% per year was achieved in 2010-12. Investment 6%-8% in the country's gas sector may raise decade up to 2012, one of Africa's strongest performances. Mozambique's economic growth ability to 8% per year through 2017. attract large investment projects in natural resources is expected to fuel continued high growth in coming years. Revenues from these vast resources, including natural gas, coal, titanium and hydroelectric capacity, could overtake donor assistance within five years.

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. 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 remained dependent upon foreign assistance for 40% of its 2012 annual budget and over half the population remained below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force and smallholder agricultural productivity and productivity growth is weak. A substantial trade imbalance persists although aluminum production from the Mozal smelter has significantly boosted export earnings in recent years. In 2012, The Mozambican government took over Portugal's last remaining share in the Cahora Bassa Hydroelectricity Company (HCB), a signficant contributor to the Southern African Power Pool. The government has plans to expand the Cahora Bassa Dam and build additional dams to increase its electricity exports and fulfill the needs of its burgeoning domestic industries. 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. In July 2007, the US government's Millennium Challenge Corporation (MCC) signed a $506.9 million Compact with Mozambique. Compact projects will end in September 2013 and are focusing on improving sanitation, roads, agriculture, and the business regulation environment in an effort to spur economic growth in the four northern provinces of the country. Citizens rioted in September 2010, after fuel, water, electricity, and bread price increases were announced. In an attempt to lessen the negative impact on people, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures. Mozambique grew at an average annual rate of 6%-8% in the decade up to 2012, 2013, one of Africa's strongest performances. Mozambique's ability to attract large investment projects in natural resources is expected to fuel continued high growth in coming years. Revenues from these vast resources, including natural gas, coal, titanium and hydroelectric capacity, could overtake donor assistance within five years.

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 propelled the country’s GDP from $4 billion in 1993, following the country's growth rate. war, to about $30.9 billion in 2014. 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 remained dependent upon foreign assistance for 40% of its 2012 annual budget and over more than half the population remained remains below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force and smallholder agricultural productivity and productivity growth is weak. force. A substantial trade imbalance persists although aluminum production from the Mozal smelter has significantly boosted export earnings in recent years. In 2012, The Mozambican government took over Portugal's last remaining share in the Cahora Bassa Hydroelectricity Company (HCB), a signficant significant contributor to the Southern African Power Pool. The government has plans to expand the Cahora Bassa Dam and build additional dams to increase its electricity exports and fulfill the needs of its burgeoning domestic industries. 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. In July 2007, the US government's Millennium Challenge Corporation (MCC) signed a $506.9 million Compact with Mozambique. Compact projects will end Mozambique that ended in September 2013 and are focusing 2013. The Compact focused on improving sanitation, roads, agriculture, and the business regulation environment in an effort to spur economic growth in the four northern provinces of the country. Citizens rioted in September 2010, 2010 after fuel, water, electricity, and bread price increases were announced. In an attempt to lessen the negative impact on people, the population, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures. Mozambique grew at an average annual rate of 6%-8% in the decade up to 2013, 2014, one of Africa's strongest performances. Mozambique's ability to attract large investment projects in natural resources is expected to fuel continued extend high growth rates in coming years. Revenues from these vast resources, including natural gas, coal, titanium and hydroelectric capacity, could overtake donor assistance within five years.

At independence in 1975, Mozambique was one of the world's poorest countries. Socialist mismanagement policies, economic mismanagement, and a brutal civil war from 1977-92 exacerbated 1977 to 1992 further impoverished the situation. country. 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, propelled the country’s GDP from $4 billion in 1993, following the war, to about $30.9 $34 billion in 2014. 2015. 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, more than half the population remains below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force. Citizens rioted in September 2010 after fuel, water, electricity, and bread price increases were announced. In an attempt to lessen the negative impact on the population, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures.
A substantial trade imbalance persists persists, although aluminum production from the Mozal smelter Aluminum Smelter has significantly boosted export earnings in recent years. In 2012, The Mozambican government Government took over Portugal's last remaining share in the Cahora Bassa Hydroelectricity Company (HCB), Company, a significant contributor to the Southern African Power Pool. The government has plans to expand the Cahora Bassa Dam and build additional dams to increase its electricity exports and fulfill the needs of its burgeoning domestic industries.
Mozambique's once substantial foreign debt has been was 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. In July 2007, the US government's Millennium Challenge Corporation (MCC) signed a $506.9 million Compact with Mozambique that ended initiatives. However, in 2013. The Compact focused on improving sanitation, roads, agriculture, and 2013, the business regulation environment in Mozambique Tuna Company (EMATUM) issued an effort to spur economic growth in $850 million bond fully guaranteed by the four northern provinces of Mozambican government primarily for the country. Citizens rioted in September 2010 after fuel, water, electricity, and bread price increases were announced. In an attempt purpose of purchasing tuna boats. The government is attempting to lessen the negative impact on reschedule this debt, in the population, expectation that a pending deal with a consortium led by a US company will provide enough revenue to pay off this debt. The pending deal has the government implemented subsidies, decreased taxes and tariffs, potential to transform Mozambique’s economy and instituted other fiscal measures. dramatically increase GDP.
Mozambique grew at an average annual rate of 6%-8% in the decade up to 2014, 2015, one of Africa's strongest performances. Mozambique's ability to attract large investment projects in natural resources is expected to extend sustain high growth rates in coming years. Revenues years although weaker global demand for commodities is likely to weaken expected revenues from these vast resources, including natural gas, coal, titanium titanium, and hydroelectric capacity, could overtake donor assistance within five years. capacity.

At independence in 1975, Mozambique was one of the world's poorest countries. Socialist policies, economic mismanagement, and a brutal civil war from 1977 to 1992 further impoverished the country. 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, propelled the country’s GDP from $4 billion in 1993, following the war, to about $34 $35 billion in 2015. 2016. 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, more than half the population remains below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force. Citizens rioted in September 2010 after fuel, water, electricity, and bread price increases were announced. In an attempt to lessen the negative impact on the population, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures.
A substantial trade imbalance persists, although aluminum production from the Mozal Aluminum Smelter has significantly boosted export earnings in recent years. In 2012, The the Mozambican Government took over Portugal's last remaining share in the Cahora Bassa Hydroelectricity Company, a significant contributor to the Southern African Power Pool. The government has plans to expand the Cahora Bassa Dam and build additional dams to increase its electricity exports and fulfill the needs of its burgeoning domestic industries.
Mozambique's once substantial foreign debt was reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives. However, in 2013, the Mozambique Tuna Company (EMATUM) issued an $850 million bond fully guaranteed by 2016, information surfaced revealing that the Mozambican government primarily Government was responsible for the purpose of purchasing tuna boats. The government is attempting to reschedule this debt, over $2 billion in the expectation that a pending deal with a consortium led government-backed loans originally secured between 2012-14 by a US company will provide enough revenue state-owned defense and security companies without parliamentary approval or national budget inclusion, which prompted the IMF and international donors to pay off this debt. The pending deal has halt direct budget support to the potential Government of Mozambique. This sizable external debt burden, donor withdrawal, elevated inflation, and currency depreciation contributed to transform Mozambique’s economy weak growth in 2016 and dramatically increase GDP. forebode weaker economic growth in the next few years.
Mozambique grew at an average annual rate of 6%-8% in the decade leading up to 2015, one of Africa's strongest performances. Mozambique's ability to attract large investment projects performances, but growth slowed in natural resources is expected 2016 to sustain high about 3.5% as low commodity prices reduced export earnings. However, many forecasts predict an increase in growth rates in coming years although weaker global demand for commodities is likely 2017 as coal exports grow. Two major international consortiums are seeking approval to weaken expected revenues develop massive natural gas deposits off the coast of Cabo Delgado province, in what has the potential to become the largest infrastructure project in Africa. The government predicts sales of liquefied natural gas from these vast resources, including natural gas, coal, titanium, and hydroelectric capacity. projects could generate several billion dollars in revenues annually sometime after 2022.

At independence in 1975, Mozambique was one of the world's poorest countries. Socialist policies, economic mismanagement, and a brutal civil war from 1977 to 1992 further impoverished the country. 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, propelled the country’s GDP GDP, in purchasing power parity terms, from $4 billion in 1993, following the war, 1993 to about $35 $37 billion in 2016. 2017. 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, more than about half the population remains below the poverty line. Subsistence line and subsistence agriculture continues to employ the vast majority of the country's work force. Citizens rioted in September 2010 after fuel, water, electricity, and bread price increases were announced. In an attempt to lessen the negative impact on the population, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures.
A substantial trade imbalance persists, although aluminum production from the Mozal Aluminum Smelter has significantly boosted export earnings in recent years. In 2012, the Mozambican Government took over Portugal's last remaining share in the Cahora Bassa Hydroelectricity Company, a significant contributor to the Southern African Power Pool. The government has plans to expand the Cahora Bassa Dam and build additional dams to increase its electricity exports and fulfill the needs of its burgeoning domestic industries.
Mozambique's once substantial foreign debt was reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives. However, in 2016, information surfaced revealing that the Mozambican Government was responsible for over $2 billion in government-backed loans originally secured between 2012-14 by state-owned defense and security companies without parliamentary approval or national budget inclusion, which inclusion; this prompted the IMF and international donors to halt direct budget support to the Government of Mozambique. This sizable external An international audit was performed on Mozambique’s debt burden, donor withdrawal, elevated inflation, and currency depreciation contributed to weak growth in 2016 2016-17, but debt restructuring and forebode weaker economic growth in the next few years.
resumption of donor support have yet to occur. Mozambique grew at an average annual rate of 6%-8% in the decade leading up to 2015, one of Africa's strongest performances, but growth slowed in 2016 the sizable external debt burden, donor withdrawal, elevated inflation, and currency depreciation contributed to about 3.5% as low commodity prices reduced export earnings. However, many forecasts predict an increase in slower growth in 2017 as coal exports grow. 2016-17. Two major international consortiums International consortiums, led by American companies ExxonMobil and Anadarko, are seeking approval to develop massive natural gas deposits off the coast of Cabo Delgado province, in what has the potential to become the largest infrastructure project in Africa. . The government predicts sales of liquefied natural gas from these projects could generate several billion dollars in revenues annually sometime after 2022.

At independence in 1975, Mozambique was one of the world's poorest countries. Socialist policies, economic mismanagement, and a brutal civil war from 1977 to 1992 further impoverished the country. 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, propelled the country’s GDP, in purchasing power parity terms, from $4 billion in 1993 to about $37 billion in 2017. 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, about half the population remains below the poverty line and subsistence agriculture continues to employ the vast majority of the country's work force.
Mozambique's once substantial foreign debt was reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives. However, in 2016, information surfaced revealing that the Mozambican Government was responsible for over $2 billion in government-backed loans secured between 2012-14 by state-owned defense and security companies without parliamentary approval or national budget inclusion; this prompted the IMF and international donors to halt direct budget support to the Government of Mozambique. An international audit was performed on Mozambique’s debt in 2016-17, but debt restructuring and resumption of donor support have yet to occur.
Mozambique grew at an average annual rate of 6%-8% in the decade leading up to 2015, one of Africa's strongest performances, but the sizable external debt burden, donor withdrawal, elevated inflation, and currency depreciation contributed to slower growth in 2016-17.
Two major International consortiums, led by American companies ExxonMobil and Anadarko, are seeking approval to develop massive natural gas deposits off the coast of Cabo Delgado province, in what has the potential to become the largest infrastructure project in Africa. . The government predicts sales of liquefied natural gas from these projects could generate several billion dollars in revenues annually sometime after 2022.