Mozambique borders Tanzania, Malawi, Zambia, Zimbabwe, South Africa, and Eswatini. Its long Indian Ocean coastline of 2,500 kilometers faces east to Madagascar.
About two-thirds of its population of more than 31 million (2020) live and work in rural areas. It is endowed with ample arable land, water, energy, as well as mineral resources and newly discovered natural gas offshore; three, deep seaports; and a relatively large potential pool of labor. It is also strategically located; four of the six countries it borders are landlocked, and hence dependent on Mozambique as a conduit to global markets. Mozambique’s strong ties to the region’s economic engine, South Africa, underscore the importance of its economic, political, and social development to the stability and growth of Southern Africa as a whole.
Political Context
The Front for the Liberation of Mozambique (Frelimo) and the Mozambican National Resistance (Renamo) remain the country’s main political forces, followed by the Mozambique Democratic Movement (MDM). Frelimowon the 2019 presidential and legislative elections in a landslide . Frelimo also secured a majority in all 10 provinces, thus electing governors in each province.
Renamo, the former rebel group that waged a bloody civil war that ended in 1992, has maintained military bases after the UN-backed Rome Peace Accord. Ever since the end of the civil war, the country has registered flare-ups of armed confrontations and violence. A new peace accord was reached in August 2019, nevertheless violated several times by a Renamo breakaway military faction known as Military Junta. However, the Renamo new leader, Ussufo Momade, who took over the reins of the party following the passing of Mr Afonso Dhakama, has shown resolve and determination in pursuing the peace deal despite facing internal backlash from members of his military wing. The August peace deal, under implementation, aims at achieving greater pacification of the country by integrating Renamo residual fighters into the national army, and dismantling Renamo military bases splattered around the country.
Meanwhile, Mozambique is grappling with another so-called Islamic insurgency in parts of the gas-rich province of Cabo-Delgado. By mid-February 2021, more than three years after the start of the insurgency, 798 incidents of conflict in Cabo Delgado have been recorded, with nearly 4,000 fatalities and 600,000 refugees. An estimated three million people are projected to face high levels of food insecurity across the country due to the combined effects of the conflict in the North, weather shocks, and COVID-19 mitigation measures, which have restricted economic activity.
Economic Outlook
Mozambique’s economy is expected to gradually recover in 2021, but substantial downside risks remain due to uncertainty surrounding the path of the COVID-19 (coronavirus) pandemic. While the economy registered its first contraction in 2020 in nearly three decades, growth is expected to rebound over the medium-term, reaching about 4% by 2022.
As the recent Mozambique Economic Update (March 2021) notes, the country needs to press ahead with its structural reform agenda as the pandemic subsides. In the near-term, measures to support viable firms and households would be crucial for a resilient and inclusive recovery. In the recovery phase, policies focusing on supporting economic transformation and job creation, especially for the youth, would be critical. Targeted interventions to support women and alleviate gender inequalities as well as to harness the power of mobile technology would support sustainable and inclusive growth in the medium term.
Development Challenges
The country’s main challenges include maintaining macroeconomic stability considering exposure to commodity price fluctuations, and making further efforts to reestablish confidence through improved economic governance and increased transparency. Moreover, structural reforms are needed in support of the currently struggling private sector. Another major challenge is diversifying the economy away from the current focus on capital-intensive projects and low-productivity subsistence agriculture, while strengthening the key drivers of inclusion, such as improved quality of education and health service delivery, which could in turn improve social indicators.
Last Updated: Mar 19, 2021
