Mozambique’s Gross Domestic Product (GDP) growth reached 5.9% in the first quarter of 2015, supported by trade, manufacturing, extractive industries, transport and communication, and electricity production. Mozambique’s annual growth has averaged 7% over the past two decades. Sound macroeconomic management, large-scale foreign-investment projects, and significant donor support have contributed significantly to such performance. However, the rapid growth of the past decades has not always translated into significant poverty reduction as poverty fell by only 4% between 2003 and 2009.

Mozambique’s public debt has rapidly risen to 55% of GDP in 2014 and is expected to stabilize around 60% of GDP in the medium term. Year on year inflation remains low (0.12% by the end of June 2015) although there are inflationary pressures in the north of the country due to the floods early in the year. The fall in the price of minerals and raw materials in general is also affecting the level of investments in Mozambique.

Political Overview

The 1992 peace agreement marked the transition from civil war to peace, culminating in the country’s first democratic elections of 1994 and the emergence of the Front for the Liberation of Mozambique (FRELIMO) as the dominant political force in the country, a fact that still holds true today.

Since January of 2015 Mozambique has a new president, Filipe Nyusi; the winning ruling party Frelimo candidate of October 2014 general elections. His party also secured a strong majority in the parliament (144 seats out of 250 in total), though in sharp decline compared to the previous election in 2009 when it garnered 75% of the vote. Renamo, the largest opposition and former rebel group, more than doubled its seats in the national parliament. Renamo has disputed the elections results and has proposed a decentralization of the current political system to allow it to rule those provinces where it came out ahead in the polls.  

Development Challenges

Mozambique’s rapid economic expansion over the past 20 years has had only a moderate impact on poverty reduction, and the geographical distribution of poverty remains largely unchanged. Mozambique also needs to improve its social indicators. The country ranked 178th out of 187 countries in the most recent Human Development Index (HDI). The adult literacy rate is 56%, and average life expectancy at birth is just 50.3 years. Mozambique faces other challenges such as increasing malnutrition.. Malaria remains the most common cause of death, responsible for 35% of child mortality and 29% for the general population. HIV prevalence among adults shows a downward trend, stabilizing at a relatively high rate of 11.5%.

The social progress index for access to improved sources of water and sanitation ranks Mozambique 128th and 119th, respectively, out of 135 countries. Indeed, Mozambique has one of the lowest levels of water consumption in the world. As a response to such challenges, the Mozambican authorities have considered the social sectors as top priorities and funding has been increasing for those sectors in general. 

Last Updated: Oct 08, 2015

World Bank Group (WBG) Assistance

Since 1984, the WBG has been providing development assistance to Mozambique in accordance with the country’s needs and priorities, from economic stabilization in the 1980s, to post-war reconstruction in the early 1990s, to a comprehensive support strategy in the late 1990s, to the current Country Partnership Strategy (CPS) for FY2012-2015, which involves close collaboration with the government, development partners, and civil society to ensure sustainable and inclusive growth. The WBG has initiated the process of updating its operational strategy, by launching the preparation of the Systematic Country Diagnostic (SCD), a first step towards developing the new Country Partnership Framework (CPF), which will replace the current CPS.  

 World Bank Group Support

The World Bank portfolio for Mozambique as of September 2015 consists of 23 IDA funded projects and a net commitment of $1.7 billion. The portfolio is diverse, covering a broad range of sectors and themes, including infrastructure development (transportation, energy, water and sanitation), public sector management and governance, health and education, social protection, agriculture and rural development, as well as budget support.

World Bank Group Non-Lending

Mozambique benefits from an important number of analytic works and technical assistance that are prepared in collaboration with the Mozambique government, development partners, and other stakeholders, and are widely disseminated once completed. The financing for these studies is from the World Bank’s administrative budget as well as from other development partners.

The International Finance Corporation, IFC

IFC’s strategy is to focus on a strategic industries, namely, Agribusiness, Forestry, Mining, Energy, Industry and Financial Services and its interventions will address the cross-cutting issues of: (i) supporting the mobilization of both local and foreign direct investment to key sectors of the economy; (ii) strengthening private sector access to finance; (iii) supporting the development of infrastructure; (iv) improving the investment climate; (v) increasing linkages between large investments and the local economy; and (vi) strengthening SME management capacity building. In FY14, IFC committed a total of $55 million in investments in Midal cables and ETC group.

The Multilateral Investment Guarantee Agency, MIGA

MIGA’s current gross exposure in Mozambique is $38.8 million (net exposure $26.6 million), across mining, agribusiness, manufacturing, infrastructure and oil and gas sectors. 

Last Updated: Oct 08, 2015

Mozambique Trans-frontier Conservation Project --The project objective was to achieve growth in community-private sector led environmentally and socially sustainable tourism in Trans-frontier Conservation Areas (TFCA). It was implemented by the Ministry of Tourism, and benefited local communities in four large Trans-frontier Conservation Areas – in the provinces of Maputo, Gaza, Inhambane and Manica in Mozambique. Today, Mozambique receives over 200,000 visitors annually to its Conservation Areas. The country has also leveraged over $3 million in nature-based private investments and increased the network of conservation areas by almost 200,000 hectares targeted at biodiversity critical areas as one of the project outcomes.

Improving transport connectivity -- Mozambique is highly vulnerable to extreme weather events; a vulnerability that is expected to increase as a result of climate change. Through an emergency intervention, the World Bank provided financing to Mozambique through credits and grants from the International Development Association (IDA) Crisis Response Window ($39.4 million)as well as the Strategic Climate Fund ($15.75 million) resulting in greater focus on climate resilience and emergency recovery efforts. The United Kingdom’s Department for International Development (DfID) provided grant funding ($15.0 million) to the project which was used to restore over 620 kilometers of road connectivity ahead of the rainy season, including critical culverts, bridges, and drainage and erosion management features. Completed in 2014, the emergency works directly benefitted a population of approximately half a million.

Access to improved water sources --The Mozambique Water Services and Institutional Support (WASIS) Project supported reforms which aimed at consolidating water supply operations and increasing coverage in large urban centers and small towns through implementation of services under a delegated management framework.  Infrastructure investments, coupled with the institutional support activities, have significantly improved water service coverage and quality standards in 13 cities, directly benefiting 779,912 people in urban areas and 57,115 people in small towns.

Improving Health Services Delivery -- Mozambique’s health system faces challenges in human resources, public financial management, health care financing, and health coverage and quality of care. The World Bank, through its support to the government’s Health Services Delivery Project is providing finance, among other things, to a rural health training institute to train qualified health workers to help tackle the human resource shortage in some of the most underserved regions in the country which account for almost half of the country’s total 25 million people. Some noteworthy results of that component of the project include 351 new health professionals trained to date. Given the high rate of malnourishment among children in rural areas in particular, the project is also training nutritionists in the City of Quelimane, center of Mozambique, who will be deployed across the country.

Last Updated: Oct 08, 2015

The World Bank Group (WBG) works closely with other development partners to improve the quality and effectiveness of development assistance to Mozambique. Fundamental to the World Bank’s assistance strategy for Mozambique is the provision of general budget support to implement key policy and institutional reforms under the country’s poverty reduction plan. The budget support program is now on its tenth operation and it is closely aligned through a common performance framework with the general budget support activities of other development partners, including European Union, United Kingdom, among others. Collaboration with development partners has also focused on education, health, roads, and fiduciary and monitoring and evaluation.

The WBG partnership includes financing to civil society groups through the Global Partnership for Social Accountability, as well as support to member of the parliament (MPs) in the form of access capacity through conferences and peer learning opportunities with other countries’ MPs. 

Last Updated: Oct 08, 2015


Mozambique: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments