Mozambique - Country Economic Memorandum : Reigniting Growth for All
Mozambique has experienced rapid growth for over two decades. Growth accelerated remarkably following the end of the civil war, averaging 7.9 percent over 1993-2015, among the highest in sub-Saharan Africa (SSA). However, growth decelerated sharply...
| Main Author: | |
|---|---|
| Format: | Report |
| Language: | English |
| Published: |
Washington, DC
2022
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/099220105302232947/P1687540b030ec0bf0b9f00e2e1bc3dfce4 http://hdl.handle.net/10986/37525 |
| Summary: | Mozambique has experienced rapid
growth for over two decades. Growth accelerated remarkably
following the end of the civil war, averaging 7.9 percent
over 1993-2015, among the highest in sub-Saharan Africa
(SSA). However, growth decelerated sharply following the
hidden debt crisis in 2016, which led to a crisis of
economic governance and a protracted economic slowdown, with
growth falling to 3 percent in 2016-2019. The growth
slowdown has been further exacerbated by the natural
disasters in 2019, the insurgency in Northern Mozambique,
escalating since 2017, and the global pandemic since 2020.
Mozambique’s existing growth strategy has been limited in
its capacity to generate productive jobs and support
accelerated poverty reduction. However, the discovery of
some of the largest natural gas (LNG) reserves in the world
is expected to provide Mozambique with a transformative
opportunity for sustained and inclusive growth. The
Mozambique Country Economic Memorandum (CEM) assesses
Mozambique’s current growth model and presents a set of
recommendations to: (i) make the best use of the
non-renewable natural resource revenues, which includes
putting in place an adequate policy and institutional
framework well ahead of the revenue windfalls from the LNG
sector; and (ii) promote growth in non-extractive sectors,
accompanied by spatial transformation, and improved
agricultural productivity. The report consists of five
chapters. Chapter one provides an overview of Mozambique’s
current growth model, asking what’s driving growth and
outlining why this model needs rethinking. Chapter two
provides analysis of the potential impact of Mozambique’s
resource boom on GDP, exports, revenue, and employment, and
discusses how to make good use of the opportunities and
manage the associated risks. Chapter three tells
Mozambique’s growth story from a spatial perspective. It
constructs a unique district-by-district sectoral GDP
database to identify the main growth nodes in Mozambique and
understand why there is a weak link between growth and
poverty reduction. The services sector is the subject of
chapter four, exploring how to overcome bottlenecks to
deliver on its potential to drive growth in Mozambique.
Chapter five continues this theme, examining the challenges
posed to private sector growth by weak governance and rising
corruption. All five chapters make policy recommendations
for the way forward. |
|---|