The World Bank in Mozambique

Mozambique borders Tanzania, Malawi, Zambia, Zimbabwe, South Africa, and Eswatini. Its long Indian Ocean coastline of 2,700 kilometers faces east to Madagascar. About two-thirds of its estimated 33 million people (2022) live and work in rural areas. The country has ample resources, including arable land, abundant water sources, energy, mineral resources, and newly discovered natural gas deposits off its coast. The country has 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, hence dependent on Mozambique as a gateway 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) are Mozambique's main political parties, with the Mozambique Democratic Movement (MDM) trailing. Since gaining independence from Portugal in 1975 and adopting multiparty democracy in 1992, Frelimo has maintained control. In the 2019 elections, they achieved a landslide victory, obtaining a two-thirds assembly majority and winning the inaugural provincial elections, enabling them to appoint governors across all ten provinces.

In 2023, Mozambique held municipal elections across 65 municipalities on October 11. Frelimo won in 60 municipalities, Renamo won in four, and MDM in one. Due to irregularities, the votes were repeated or recounted in some areas. The final election results upheld Frelimo’s victory in Maputo, Mozambique's capital city, and Matola, Mozambique’s largest city. The next general elections are scheduled for October 9, 2024. 

Cabo Delgado conflict. Since 2017, Mozambique's gas-rich Cabo Delgado province has faced a violent insurgency, leading to loss of lives and livelihoods, widespread displacement, and a humanitarian crisis. The crisis has spilled over into the neighboring provinces of Nampula and Niassa, both through insurgent attacks and through the dispersion of displaced populations. Efforts by Mozambican and regional security forces to stabilize the province have seen some success, but a recent spike in violence in the southern parts of Cabo Delgado has displaced a further 100,000 people, many of whom had been previously displaced. It comes as the Southern African Development Community Mission in Mozambique (SAMIM) plans to fully withdraw by mid-2024. To address the crisis and its impacts, the Government has approved the Cabo Delgado Reconstruction Plan, as well as the Integrated Resilience and Development Program for the North of Mozambique, focusing on conflict prevention, recovery, peacebuilding, and resilience in the three affected northern provinces.

Challenges related to civic voice remain. The 2023 CIVICUS Monitor Report downgraded Mozambique's civic space from “obstructive” to "repressive", while the 2024 Freedom House report deems its expression "Partially Free". The Economist Intelligence Unit 2023 Democracy Index considers Mozambique’s governance “authoritarian” based on various democratic indicators.

Economic Outlook

Economic recovery gained momentum in 2023. The economy grew by 5% in 2023, primarily driven by the start of Liquified Natural Gas (LNG) production at the Coral South offshore facility. Strong growth in agriculture and services, particularly transport, also contributed to the economy's expansion, offsetting the impact of lower manufacturing and construction activity. Inflation reached a five-year high of 9.8% in 2022 and moderated to 7.1% in 2023 as global commodity prices subsided. Despite the 100-basis-point cut in the monetary policy rate to 16.3% in January 2024, the overall monetary policy stance remains tight, with high statutory reserves (39%). Total public debt has declined in recent years and is considered sustainable in a forward-looking sense. However, risks are tilted to the downside in the medium term. Delays in the larger LNG projects could undermine growth prospects. Other risks stem from the large wage bill, climate shocks, increasing domestic debt costs, waning commitment to reforms in the run-up to the elections, volatility in global markets, and uncertainty around the security situation in the North.

The national poverty rate surged from 48.4% to 62.8% between 2014/15 and 2019/20. The number of poor people increased from 13.1 to 18.9 million, reflecting inter alia the impact of COVID-19 on families. There has been a disproportionate increase in poverty in urban areas. This can be explained by the fact that, while there has been a generalized contraction in consumption, urban areas appear to have been disproportionately impacted by the global pandemic due to more significant impacts of reduced mobility and slower economic activity. With regards to inequality, the Gini Coefficient fell from 56.1 to 50.4 between 2014/15 and 2019/20. Multidimensional poverty has also worsened. The share of households experiencing deprivations rose from 71 to 78.3% between 2014/15 and 2019/20. In rural areas, conditions went back to the levels observed in 2002/03, with over 95% of households falling into multidimensional poverty. Urban households also saw a sharp increase in multidimensional poverty, from 32% to 46% during the same period.

Development Challenges

Despite having one of the fastest-growing economies in Sub-Saharan Africa from 2000-2015, job creation, poverty reduction, and human capital accumulation are still limited, with most of the substantial wealth generated benefiting limited sections of the economy. With a human capital index of 0.36, extremely low levels of human capital are a structural constraint to rapid, inclusive, and sustainable growth in Mozambique. Basic services in education and health are unevenly delivered across the country, driving spatial inequalities, with limited mechanisms to protect the most vulnerable from the impacts of shocks, thus driving fragility, instability, and violence.

The lack of good training and weak links between supply and demand compound a weak labor market and low productivity growth. Disempowerment among girls and women hinders growth through unfavorable fertility levels, high child and maternal mortality, low levels of skills among women, and poor productivity of women in the labor market.

Additional challenges include maintaining macroeconomic stability, considering the country’s exposure to commodity price fluctuations, and making further efforts to reestablish confidence through improved economic governance and increased transparency. Structural reforms are needed to support the struggling private sector. Diversifying the economy away from its 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—could, in turn, improve social indicators.

Last Updated: Apr 05, 2024

World Bank Group engagement in the country is defined under the Mozambique Country Partnership Framework (CPF) FY23-27, endorsed by the World Bank Group’s Board in February 2023. The overarching goal of the CPF is to support Mozambique’s progress toward greener, more resilient, and inclusive development. This will be achieved by setting the foundations for a transition to (i) an economic growth model that generates more and better jobs, with attention to women’s participation; (ii) more equitable institutions and a society that is more resilient to multidimensional shocks, (iii) a future development path that is consistent with global climate goals. WBG support will help address the underlying causes of fragility, conflict, and violence. The CPF program emphasizes the importance of scaling up for impact, leading to fewer, larger transformational investments and paying greater attention to implementation. As of March 31, 2024, the World Bank portfolio for Mozambique consists of 43 regional and national projects, with a total commitment of $6.2 billion (credits and grants).

As part of its analytical work, the World Bank issued the Mozambique Country Climate and Development Report (CCDR), which underscores the urgency of mainstreaming climate action into Mozambique’s planning, given the country’s vulnerability to the effects of climate change.

Last Updated: Apr 05, 2024

Expanding Coverage of Primary Healthcare
Mozambique has exponentially increased the number of community health workers, from 1,000 in 2018 to 8,300 in 2022, with support from the World Bank-funded Primary Health Care Strengthening Program. Together, these community health workers reach an estimated two million households countrywide, up from 240,000 households in 2018, contributing to increasing the coverage and quality of primary healthcare across Mozambique. These frontline health workers are the first point of contact for families and communities with the National Health System. They provide primary healthcare through home visits and community gatherings in urban and hard-to-reach areas in rural Mozambique, saving families from traveling long distances when they need assistance. They are also crucial in promoting health and providing critical information through workshops they deliver in the communities on nutrition, contraception, and the prevention of common diseases such as malaria, diarrhea, and pneumonia. The World Bank and partners have supported the country’s Ministry of Health in expanding and strengthening the community health worker network over the last two decades. The Primary Health Care Strengthening Program contributed to this long-term effort, focusing on mass training community health workers to assist communities living in urban and rural areas in 10 of the country’s 11 provinces.

Improving the quality of higher, technical, and vocational education and training (TVET)
The Improvement of Skills Development Project (MozSkills) project is enhancing TVET and higher education in Mozambique by implementing competency-based curricula and STEM education. It has helped to update the National Catalogue of Qualifications with 107 qualifications, directly impacting 43,000 students. The project has trained 66 higher education trainers to teach TVET trainers and managers, with 1,894 TVET teachers certified and more in training. By December 2025, it aims to have over 3,000 certified TVET teachers. The project also increased female student enrollment and trained 408 higher education faculty in STEM, improving the quality of education and job prospects for young people.

Accelerating access to electricity
Mozambique’s electrification rate is one of Africa's most rapid, with access rates jumping from 31% in 2018 to 53.5% in 2023. This progress is anchored in the National Energy Program for All, with a vision of universal access by 2030. The World Bank's pivotal role includes financing vital infrastructure, championing reforms, and ensuring connectivity for even the most remote communities. Our programmatic approach addresses transmission, distribution, and generation challenges, and we work hand-in-hand with the Mozambican Government to refine strategies, guaranteeing a sustainable and durable electrification journey.

Last Updated: Apr 05, 2024

The World Bank Group works closely with development partners to improve the quality and effectiveness of development assistance to Mozambique. Collaboration has focused on education, health, roads, fiduciary regulations, monitoring and evaluation.

Last Updated: Apr 05, 2024