Mozambique

» Population 24 million (est 2013)

» GDP (PPP) $26.22 billion (2012 est)

» GDP/capita (PPP) $1,200

» Labor force 10.1 million (2012 est)

» Unemployment rate 17% (2007 est)

Table C-3 Mozambique Peers and Twins

Rank 2000

1997 % of U.S.

1960 % of U.S.

2000 % of U.S.

Blue Line Avg per capita growth 2000-2013

above below

Pop Above Land Locked

Civil war

Zimbabwe 21 6.3% 9.2% 2.5% 3.56 -2.4% -5.9 12.6 No yes yes

Burundi 2 1.9% 4.3% 1.2% 3.64 1.8% -3.6 8.9 No yes yes

Malawi 9 3.3% 3.1% 1.6% 3.59 3.0% -0.59 17 No yes no

Uganda 15 7.2% 5.2% 2.2% 3.57 3.5% -0.11 37 No yes yes

Chad 23 2.8% 7.9% 2.5% 3.56 3.8% 0.22 11. Yes yes yes

Mozambique 4 4.6% 7.8% 1.4% 3.60 5.4% 1.8 23 yes no yes

Ethiopia 5 2.1% 2.2% 1.4% 3.60 5.9% 2.3 91 Yes yes yes

Angola 53 2.7% 7.9% 6.4% 3.4 3.6% -3.4 21 Yes no yes

Botswana 98 19.5% 5.0% 25% 2.9 2.6% -0.24 1.9 yes yes no

Source: IMF Country Report

Figure 1: Mozambique real GDP

Source: IMF Country Report

Figure 2: Mozambique Reserves

19881989

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20120

5

10

15

20

25

30

35

40

0%

10%

20%

30%

40%

50%

60%

70%

Figure 4: Mozambique exchange Rate vs. Inflation

Official exchange rate (LCU per US$, period average)Inflation, consumer prices (annual %)

The Mozambican metical has become weaker over the years thus promoting trade Inflation has dropped over time from a peak of 63 % in 1994 and now currently at

around 10%

Source: World Development Indicators

Adult literacy has increased by ( 44.94%) since 1997 Female literacy rate has had the most significant increase since 1997 increasing

by(72.67%) Male literacy rate has had a modest increase of (29.14%) since 1997

1997 2003 2010

38.71%

48.16%

56.11%54.82%

65.58%

70.80%

24.96%

33.19%

42.85%

LiteracyAdult (15+) literacy rate (%). Total Adult (15+) literacy rate (%). Male Adult (15+) literacy rate (%). Female

Source: World Development Indicators

1996.5 2002.5 2007.50

10

20

30

40

50

60

70

80

90

81

75

60

42

35

2526

20

14

Poverty Rate (H) Poverty Gap (H*I) Gap Squared1996 2003 2008

44.4947.11 45.66

41.16

35.4

25.13

58.69

53.56

42.86

PovertyGINI index Poverty gap at $1.25 a day (PPP) (%)Poverty gap at $2 a day (PPP) (%)

The GINI of Mozambique since 1996 has increased over time with the GINI in 2004 at 45.66

People who live below the poverty line of $1.25/day have decreased by 38.94% since 1996

Those who live below the poverty line of $2/day have decrease by 26.97% since 1996

lowest 2nd 3rd 4th 5th 6th 7th 8th 9th highest

3.1

4.85.4 5.7 5.9 6.1 6.1 6.1 5.9

3.6

Figure GIC-2: Mozambique Growth Incidence Curve (Gini fell from .47 in 2004 to .46 in 2008 up from .44 in 1996)

Growth 2003 to 2008 by decile Average per capita consp growth, $2005 PPP

Source: PovcalNet: the on-line tool for poverty measurement developed by the Development Research Group of the World Bank, http://iresearch.worldbank.org/PovcalNet/index.htm?1

-10 10 30 50 70 90 110-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0 China*

India*

U.S.

Indonesia*

Brazil

PAK

NGA*

BGD*Russia*

Mexico

Vietnam*ETH*

Egypt

DRC

Turkey*

Myanmar*

Thailand*

France

Italy

Korea

Spain

Argentina

Poland*

Yemen

TaiwanMozambique

Chile* HKG

Figure C-2 Convergence, "big-time" 2000-2013

Source: IMF WEO database October 2012 the size of each bubble is proportional to the population of that country.

Ave

rage

per

cap

ita g

row

th ra

te

2000 $PPP GDP as % of U.S. Zimbabwe

*These 12 "above the line" countries are home to almost 4 billion people.

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Mozambique peer group

MWI UGA TCD BDI ZWE ETH MOZ

32%

23%

45%

GDP Composition by sector 2010

AgricultureIndustryServices

Mozambique’s main contributor to GDP is the services sector(tourism, telecommunications and finance)

Agriculture makes the second largest contributor (tobacco, sugar, cotton, timber, cashews)

Industry is the smallest contributor (manufacturing, aluminum, coal, minerals, natural gas)

79%

3%

18%

Economic contribution to labor force

AgricultureIndustryServices

Agriculture Industry Services0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

29%

24%

47%

32%

23%

45%

2008 2010

The services industry shrunk after the financial crisis, and agriculture increased

19891990

19911992

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20110.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Value added to GDP by sector

Industry, value added (% of GDP) Agriculture, value added (% of GDP)Services, etc., value added (% of GDP)

Value added by Industry has been increasing since 1992 it is currently around 24%

Value added by Agriculture has been decreasing since 1989 (a good sign) it is now around 29%%

And value added by services and other sectors has been increasing since 1989 it is now around 47%

Source: World Development Indicators

19891991

19931995

19971999

20012003

20052007

20092011

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

Trade (% of GDP)

Trade (% of GDP)

19891991

19931995

19971999

20012003

20052007

20092011

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

Exports of goods and services (% of GDP)

Exports of goods and services (% of GDP)

Trade made up 74.52% of Mozambique’s GDP in 2011Exports of goods and services made up 28.98% of GDP

Source: World Development Indicators

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Main Exports

Agricultural raw materials exports (% of merchandise exports) Food exports (% of merchandise exports)Fuel exports (% of merchandise exports) Ores and metals exports (% of merchandise exports)

Source: World Development Indicators

Source: IMF Country Report

Mozambique is struggling with resolving insolvencies, enforcing contracts and making credit easily available

19891990

19911992

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20110.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Foreign direct investment, net inflows (% of GDP)

Foreign direct investment, net inflows (% of GDP)

Foreign direct investment has increased gradually since 1989 and started increasing at a very high rate since 2005 increasing by 775.80% from 1.86% to 16.29%

Source: World Development Indicators

Source: IMF Country Report

» Recommendations:» Invest more on agriculture-with focus on bio

fuels (ethanol and bio diesel)» Improve infrastructure to keep up with growing

capacity» Strengthen service sector through improvement

of regulation and institutions» Improve availability of education» Make credit easily accessible: Microfinance» Improve on their tax collection methods to

increase tax revenue

Bibliography» International Monetary Fund. (2013). Country Report Republic of

Mozambique: fifth review under the policy support instrument and request for modification of assessment criteria. Retrieved April 20, 2013 from: http://www.imf.org/external/pubs/ft/scr/2013/cr1301.pdf

» International Monetary Fund.(2013) Country Report Republic of Mozambique fourth review under the policy support instrument and request for modification of assessment criteria. Retrieved April, 2013 from: http://www.imf.org/external/pubs/ft/scr/2011/cr11149.pdf

» World Bank. (2013). Doing Business. April, 2013, from http://www.doingbusiness.org/~/media/giawb/doing%20business/documents/profiles/country/MOZ.pdf.

» World Bank. (2013) [Data file]. Retrieved from http://data.worldbank.org/

» Pekka Virtanen & Dag Ehrenpreis, (2007). Growth, Poverty and Inequality in Mozambique“ Retrieved April 30, 2013, from: http://www.ipc-undp.org/pub/IPCCountryStudy10.pdf

» Channing Arndt; M. Azhar Hussain; E. Samuel Jones; Virgulino Nhate; Finn Tarp & James Thurlow, (2011). ‘Explaining Poverty Evolution: The Case of Mozambique’ Retrieved April 30, 2013, from: http://www.wider.unu.edu/stc/repec/pdfs/wp2011/wp2011-17.pdf

» Finn Tarp; Channing Arndt; Henning Tarp Jensen; Sherman Robinson and Rasmus Heltberg, (2002) ‘Facing the Development Challenge in Mozambique An Economy wide Perspective’ Retrieved April 30, 2013 from: http://www.ifpri.org/sites/default/files/pubs/pubs/abstract/126/rr126.pdf

» J. O’s The Economist (2013) ‘Growth and Other Good things’ Retrieved May 2, 2013 From: http://www.economist.com/blogs/baobab/2013/05/development-africa