Economy of Mozambique
The economy of Mozambique has developed since the end of the Mozambican Civil War (1977-1992), but the country is still one of the world's poorest and most underdeveloped. 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 to single digits during the late 1990s although it returned to double digits in 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 a large 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 aluminium 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 International Monetary Fund's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives, and is now at a manageable level.Sectors
All economic sectors ranging from manufacturing and agriculture to tourism and finance, declined sharply after independence from Portugal in 1975, but picked up in the 2000s after the end of the Mozambican Civil War, although they are still performing well below potential. Gas and oil reserves
Recent oil and gas discoveries across East Africa, most notably in Mozambiqueand Tanzania, have seen the region emerge as a new player in the global oil andgas industry. As liquefied natural gas ("LNG") contracts remain heavily indexed to oil, the fall in global oil prices poses significant downside risk to gas production projects. Persistent oversupply in the oil market continues to put downward pressure on oil prices. This trend of lower prices is unlikely to reverse in the near future with futures prices estimating the average Brent crude oil price to range between USD50-65/bbl over the next five years. Agriculture, fishing and forestry
In Mozambique, agriculture is the mainstay of the economy and the country has a great potential for growth in the sector. Agriculture employs more than 80 percent of the labour force and provides livelihoods to the vast majority of over 23 million inhabitants. Agriculture contributed 31.5 percent of the GDP in 2009, while commerce and services accounted for 44.9 percent.
The main cash crops are sugar, copra, cashew nuts, tea, and tobacco. Food security, vulnerability and risk management
Mozambique net importer of food. Total annual cereal import requirements average 0.89 million tons (0.14 million of maize, 0.39 of rice and 0.36 of wheat). Mozambique must also import substantial quantities of meat and livestock products. Mining and semi-processing
Minerals currently being mined include marble, bentonite, coal, gold, bauxite, granite, titanium and gemstones. Illegal exports from artisanal production are estimated at US$50 million. Manufacturing
The country's largest ever foreign investment, Mozal has little impact on employment, but is making a substantial contribution to balance of payments through taxes generated. Exports generated in the first quarter of 2001 were worth US$85.3, the primary factor for the 172% expansion in Mozambique's exports for the period. Completion of the smelter resulted in aluminium accounting for up to 70% of exports. Construction materials, agricultural processing, beverages and consumer goods were the main sub-sectors. Tourism
This sector declined sharply after independence from Portugal, but has been developed, although it is still performing well below potential. The national strategy is to promote high-value, low-volume tourism.
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