Almost five centuries as a Portuguese colony came to a close with independence in 1975. Large-scale emigration, economic dependence on South Africa, a severe drought, and a prolonged civil war hindered the country's development until the mid-1990s. The ruling Front for the Liberation of Mozambique (FRELIMO) party formally abandoned Marxism in 1989, and a new constitution the following year provided for multiparty elections and a free market economy. A UN-negotiated peace agreement between FRELIMO and rebel Mozambique National Resistance (RENAMO) forces ended the fighting in 1992. In 2004, Mozambique underwent a delicate transition as Joaquim CHISSANO stepped down after 18 years in office. His elected successor, Armando GUEBUZA, served two terms and then passed executive power to Filipe NYUSI in 2014. RENAMO’s residual armed forces have continued to engage in a low-level insurgency since 2012.
Southeastern Africa, bordering the Mozambique Channel, between South Africa and Tanzania
coal, titanium, natural gas, hydropower, tantalum, graphite
Population - distribution
three large populations clusters are found along the southern coast between Maputo and Inhambane, in the central area between Beira and Chimoio along the Zambezi River, and in and around the northern cities of Nampula, Cidade de Nacala, and Pemba; the northwest and southwest are the least populated areas
Emakhuwa 25.3%, Portuguese (official) 10.7%, Xichangana 10.3%, Cisena 7.5%, Elomwe 7%, Echuwabo 5.1%, other Mozambican languages 30.1%, other 0.3%, unspecified 3.7% (2007 est.)
MAPUTO (capital) 1.187 million; Matola 937,000 (2015)
- Conventional long form
- Republic of Mozambique
- Conventional short form
- Local long form
- Republica de Mocambique
- Local short form
- Geographic coordinates
- 25 57 S, 32 35 E
- Time difference
- UTC+2 (7 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
At independence in 1975, Mozambique was one of the world's poorest countries. Socialist policies, economic mismanagement, and a brutal civil war from 1977 to 1992 further impoverished the country. 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, propelled the country’s GDP from $4 billion in 1993, following the war, to about $35 billion in 2016. Fiscal reforms, including the introduction of a value-added tax and reform of the customs service, have improved the government's revenue collection abilities.
- External debt stocks
- US$ 10,055,525,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -5,832,977,837
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 8,498,235,560
- Exports of goods and services
- US$ 3,828,497,482
- Total Merchandise Trade
- FDI, net inflows
- US$ 3,868,353,885
- Commercial Service Exports
- US$ 722,620,716
cotton, cashew nuts, sugarcane, tea, cassava (manioc, tapioca), corn, coconuts, sisal, citrus and tropical fruits, potatoes, sunflowers; beef, poultry
aluminum, petroleum products, chemicals (fertilizer, soap, paints), textiles, cement, glass, asbestos, tobacco, food, beverages
- aluminum, prawns, cashews, cotton, sugar, citrus, timber; bulk electricity
- South Africa 21.2%, China 10.6%, Italy 9.4%, India 8.8%, Belgium 8.2%, Spain 4.6% (2015)
- machinery and equipment, vehicles, fuel, chemicals, metal products, foodstuffs, textiles
- South Africa 23.6%, China 19.7%, India 14.2%, Portugal 4% (2015)
- Country Risk Rating
- The highest-risk political and economic situation and the most difficult business environment. Corporate default is likely.
- Business Climate Rating
- The business environment is very difficult. Corporate financial information is rarely available and when available usually unreliable. The legal system makes debt collection very unpredictable. The institutional framework has very serious weaknesses. Intercompany transactions can thus be very difficult to manage in the highly risky environments rated D.
- Enviable geographic location: long coastline, proximity to the South African market
- Considerable mineral (coal), agricultural and hydroelectric wealth
- Major gas reserves discovered off shore in 2010
- Supported by foreign financial donors and investors (FDIs) with finance for mining and gas industry infrastructure
- Limited diversification; dependence on commodity prices (aluminum, coal)
- Inadequate transport and port infrastructure seriously limiting the ability to export commodities
- Highly dependent on international aid and the South African economy
- Poor governance
Industrial activity, especially coal production, has undergone a marked slowdown. Operation of the Sena railway line transporting coal to the port of Beira has been suspended since the summer of 2016, following the attacks by the armed faction of the main opposition party (Renamo). However the extractive industry could feel the benefits of the new railway line linking the mines in the center of the country with the port of Nacala, commissioned in mid-2015. Flows of foreign direct investments and finance are likely to be heavily impeded by the revelation in April 2016 of a significant amount of debt (USD 1.4 billion or about 10.7% of GDP) concealed by the government from multilateral financial institutions. In October 2016, the IMF declared its readiness to help the government renegotiate its debt with its creditors. The exchanges with funders would resume subject to a debt restructuration agreement.
The expected drop in public capital spending is, moreover, expected to put pressure on the construction sector, traditionally a major contributor to the Mozambican economy. Weak external demand and the still low prices for the country's main export commodities (aluminum and coal) are also likely to limit the contribution of exports to growth. Finally, private consumption is likely to be curbed by still high inflation, fueled by the impact of drought on food prices, the hike in some public sector tariffs (electricity in particular) and the effects of the depreciation of the metical.
Since the sharp deterioration in the fiscal balance in 2014, the government has continued with its fiscal consolidation policy. This fiscal position may be difficult to hold, with international aid currently suspended. Even if talks with donors restart, government guarantees on loans to state-owned enterprises increases the risk of sovereign default. The measures intended to widen the tax base and improve tax collection, as well as efforts to rein in spending would not prevent worsening of the fiscal balance.
At the same time, public debt (mostly external) has reached record levels and the government may face difficulties to meet payments due in January 2017. The hoped-for debt restructuring, probably subject to the implementation of more extensive fiscal consolidation measures, would be positive for the country.
The high structural current account deficit, associated with the country's huge need for imported goods and services to develop its infrastructures (gas, transport) may increase in 2017. Exports of mining products will not increase in a context of weak growth in external demand and still low commodity prices. Imports will be sustained by the need for equipment, contributing to the increasing deficit. The depreciation of the metical has accelerated following the debt scandal, resulting in high imported inflation. The authorities have accordingly tightened monetary policy. These downward pressures on the currency are likely to continue due to the combination of the twin deficits, the aversion to emerging risk and the freeze on financial assistance by international organizations. Inflows of foreign direct investments are not expected to support the currency.
Since the October 2014 parliamentary elections, Frelimo - the ruling party since 1994 - has had to contend with very lively opposition from Renamo. Tensions between the governing party and the opposition have sharpened to the point of becoming violent. Discontent within civil society remains a source of political instability, even though the government is ready to take steps should there be any unrest.
The business climate in Mozambique remains difficult. The country's performance on governance according to the World Bank index is generally below that of its main neighbors (with the exception of Zimbabwe). The country has dropped in the rankings, especially regarding the rule of law (168th out of 209 countries in 2015 compared with 129th in 2010), the fight against corruption, and, above all, political stability.