Mozambique Economy 2007

Economy - overview:
At independence in 1975, Mozambique was one of the world's poorest countries. Socialist mismanagement and a brutal civil war from 1977-92 exacerbated the situation. 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 reduced to single digits during the late 1990s although it returned to double digits in 2000-06. 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 the majority of the population remains below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force. A substantial trade imbalance persists although the opening of the Mozal aluminum smelter, the country's largest foreign investment project to date, has increased export earnings. In late 2005, and after years of negotiations, the government signed an agreement to gain Portugal's majority share of the Cahora Bassa Hydroelectricity (HCB) company, a dam that was not transferred to Mozambique at independence because of the ensuing civil war and unpaid debts. More power is needed for additional investment projects in titanium extraction and processing and garment manufacturing that could further close the import/export gap. Mozambique's once substantial foreign debt has been reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives, and is now at a manageable level.

GDP (purchasing power parity):
$29.17 billion (2006 est.)

GDP (official exchange rate):
$6.323 billion (2006 est.)

GDP - real growth rate:
7.9% (2006 est.)

GDP - per capita (PPP):
$1,500 (2006 est.)

GDP - composition by sector:
agriculture: 22.8%
industry: 29.5%
services: 47.7% (2006 est.)

Labor force:
9.4 million (2006 est.)

Labor force - by occupation:
agriculture: 81%
industry: 6%
services: 13% (1997 est.)

Unemployment rate:
21% (1997 est.)

Population below poverty line:
70% (2001 est.)

Household income or consumption by percentage share:
lowest 10%: 2.1%
highest 10%: 39.4% (2002)

Distribution of family income - Gini index:
47.3 (2002)

Inflation rate (consumer prices):
13.2% (2006 est.)

Investment (gross fixed):
20.7% of GDP (2006 est.)

Budget:
revenues: $1.834 billion
expenditures: $1.98 billion (2006 est.)

Public debt:
23.2% of GDP (2006 est.)

Agriculture - products:
cotton, cashew nuts, sugarcane, tea, cassava (tapioca), corn, coconuts, sisal, citrus and tropical fruits, potatoes, sunflowers; beef, poultry

Industries:
food, beverages, chemicals (fertilizer, soap, paints), aluminum, petroleum products, textiles, cement, glass, asbestos, tobacco

Industrial production growth rate:
3.4% (2000)

Electricity - production:
13.17 billion kWh (2005)

Electricity - consumption:
9.127 billion kWh (2005)

Electricity - exports:
12 billion kWh (2005)

Electricity - imports:
9.588 billion kWh (2005)

Oil - production:
0 bbl/day (2004 est.)

Oil - consumption:
11,500 bbl/day (2004 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Oil - proved reserves:
0 bbl (1 January 2006)

Natural gas - production:
191.8 million cu m (2005 est.)

Natural gas - consumption:
191.8 million cu m (2005 est.)

Natural gas - exports:
0 cu m (2005 est.)

Natural gas - imports:
0 cu m (2005)

Natural gas - proved reserves:
122.2 billion cu m (1 January 2006 est.)

Current account balance:
$-625 million (2006 est.)

Exports:
$2.381 billion f.o.b. (2006 est.)

Exports - commodities:
aluminum, prawns, cashews, cotton, sugar, citrus, timber; bulk electricity

Exports - partners:
Netherlands 59.7%, South Africa 15.2%, Zimbabwe 3.2% (2006)

Imports:
$2.649 billion f.o.b. (2006 est.)

Imports - commodities:
machinery and equipment, vehicles, fuel, chemicals, metal products, foodstuffs, textiles

Imports - partners:
South Africa 36.3%, Netherlands 15.6%, Portugal 3.3% (2006)

Economic aid - recipient:
$1.286 billion (2005)

Reserves of foreign exchange and gold:
$1.156 billion (2006 est.)

Debt - external:
$3.527 billion (2006 est.)

Market value of publicly traded shares:
$NA

Currency (code):
metical (MZM)

Exchange rates:
meticais per US dollar - 25.4 (2006), 23,061 (2005), 22,581 (2004), 23,782 (2003), 23,678 (2002)
note: in 2006 Mozambique revalued its currency, with 1000 old meticais equal to 1 new meticais