In 40 years of independence, Mozambique has made real progress: it is one of the fastest growing economies in the world, democratic institutions have been deepened, public services have been reformed, and human development indicators have significantly improved. Yet despite these achievements, great challenges remain. Ayokunu Adedokun, PhD fellow, writes from Maputo.
Today, 25 June 2015, the Republic of Mozambique celebrates 40 years of independence from Portugal. The mood of the country is euphoric and delightful. Thousands of Mozambicans have descended on Maputo’s Machava Stadium, the public arena for the celebration. Everywhere is decorated with the national flag. The only songs on radio stations are patriotic songs. Government-owned buildings were repainted in preparation for today. Foreign dignitaries from Africa, Asia, Europe, North America and South America are also present to join this ‘national birthday party’. But in the midst of these celebrations, some Mozambicans are asking – is there anything to celebrate? Here, I provide an overview of the achievements, challenges and prospects of the country.
The recent history of Mozambique is marked by violent conflict, a 10-year liberation struggle between 1964 and 1974 and another 16 years of civil war from 1977 to 1992; yet the country has not experienced any large scale recurrence of war following the 1992 Rome Peace Accords. Instead, Mozambique has adopted major political and institutional reforms. These include the incorporation of all political groups into the electoral process, the adoption of a new constitution, the creation of a civilian police force with members from both sides of the war (that is, Frelimo and Renamo), and the adoption of the rule of law to strengthen the independence of the judiciary.
On the economic front, Mozambique has been among the fastest growing economies in the world, with average GDP increases of 7.5% in the past decade. Agriculture, fishery and tourism are the main sources of income and provide jobs for millions of the population. Other sectors, including mining (about 40% of GDP in 2013), financial services, transport and communications, construction and commerce, are all growing fast, too.
Slowly, but progressively, poverty is decreasing in Mozambique – from 1997 to 2003 poverty decreased by 15% (from 69% to 54%). The country currently ranks in the top three for foreign direct investment in Africa. The Guardian newspaper has recognised the progress of the country’s economy and considered the Mozambican currency, the metical, the most stable in Africa. The Banker, a London-based, Financial Times-owned magazine, recently honoured the Governor of the Banco de Mocambique, Ernesto Gove, as Africa’s best central bank governor for 2015.
Various indicators of human development progress — such as literacy rates, poverty reduction, under-5 mortality and life expectancy—have significantly improved as well. For example, infant mortality rates have declined dramatically from about 175 deaths per 1,000 live births in 1975 to about 70 deaths per 1,000 live births in 2011. Between 1980 and 2013, Mozambique’s life expectancy at birth increased by 7.4 years, mean years of schooling increased by 2.5 years, and expected years of schooling increased by 4.7 years. Mozambique’s GNI per capita also increased by about 71.1% between 1980 and 2013, according to a UNDP report (2014).
In terms of governance indicators, Mozambique fares better than most African countries in terms of government effectiveness, control of corruption, regulatory quality, political stability, and rule of law. The 2013 Global Peace Index ranked Mozambique as the ninth most stable country in Africa. Mozambique also has good standing in the Mo Ibrahim Index of African Governance (IIAG). But even though Mozambique has every reason to be proud of its recent achievements, the country still faces great challenges. This is the focus of the next section.
While Mozambique has made impressive progress in economic growth, political development and in the expansion of education and health services and the promotion of gender equality, overall the country is yet to fully realise its potential.
Despite more than a decade of sustained economic growth, there has been no economic transformation or structural change. Economic growth has been heavily concentrated in large, capital-intensive ‘mega-projects’ which have brought relatively few jobs and little poverty reduction. Only 10% of the population is formally employed. And Mozambique remains one of the poorest countries in the world: 54.7% of the populations live in poverty. Female-headed households are worse off. Close to 50% of these households are in the poorest third of the population.
The country’s infrastructure is extremely fragile and frustrating — it is the 14th least internally connected country in the world. Mozambique’s rank on business environment is 135 out of 169. The country continues to experience fragile institutions and high funding costs which affect the competitiveness of the private sector and in particular small and medium-sized enterprises (SMEs).
Similarly, Mozambique’s ‘economic miracle’ tends to be driven more by development donors than by the national agenda. According to IMF figures, foreign aid was 48% of the government budget in 2004. At present, foreign aid is estimated to contribute around 35% to the government budget. In other words, Mozambique continues to be highly aid dependent. And high aid dependence means that the budget process involves only two actors: the executive and foreign donors. Accountability to donors is much stronger than it is to Mozambican society. This is an urgent and critical challenge that requires a rethink on the part of the government and the donor community.
Along similar lines, the latest UNDP report ranks Mozambique as the third lowest country in the world on the Human Development Index (HDI). Mozambique’s current score of 0.327 is below the regional average. HIV/AIDS is also prevalent, with more than 11.5% of people aged 15-49 years affected.
The recent clashes between Renamo and the Frelimo government in October 2013 have also raised fears that Mozambique may return to civil war. But luckily, an agreement was reached and Renamo participated in the general elections held in November 2014. All in all, the foregoing challenges indicate that there is still much to be done towards achieving sustainable peace and development in Mozambique.
Overall, and despite the many challenges listed above, Mozambique is a country of possibilities and hope. It has the potential to achieve rapid and broad-based economic and social progress. The recent discovery of huge offshore reserves of natural gas and coal have the potential of transforming the country’s economy. The gas reserves alone are estimated at 200 trillion cubic feet and, with proper investment, these would place Mozambique among the top three natural gas producers in the world. Prominent oil and gas companies like Anardako (USA) and ENI (Italy) are already active in Mozambique, investing and engaging with local businesses.
Additionally, the growing influence of Brazil, Russia, India, China and South Africa (the ‘BRICS’) in Mozambique can complement European and US influences if they invest in capacity building: by training Mozambicans, and equipping them with the requisite skills and competencies needed for 21st century jobs.
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