Transforming African Economies - Factsheet on Mozambique

  • Mozambique’s GDP grew by 8.2 percent per year from 1993-2007, albeit from a low starting point. Despite this growth, the structure of the economy has barely changed in the past 20 years. Industry and services trail far behind the farm sector as a source of employment.

  • With 60 percent of the population living in rural areas, and more than 75 percent working in agriculture, the growth of this sector is important for both social and economic reasons. Yet agriculture currently contributes only about 25-30 percent of GDP.

  • Agricultural production has increased in the past decades, but productivity has not. As the country encounters limits to growth through farming more land, and struggles to improve productivity, it faces the danger of declining rural incomes and increased poverty.

  • Most major crops yield one-fifth of their potential. Increased productivity and a more dynamic farm sector could improve incomes, dissuade people from leaving the countryside—easing the pressure on cities to provide services, shelter, and employment—and lower the cost of food.

  • After quick declines in poverty after the civil war ended, poverty has diminished little in recent years and nutrition is poor. In 2008-09, almost half of Mozambique’s children suffered from chronic malnutrition and seven percent were acutely undernourished.

  • Despite these challenges, the country is quickly urbanizing and due to improved roads, rural and urban areas are becoming more connected, improving rural dwellers’ access to markets and services. The government has also made important investments in education and health.

  • However, without more productive agriculture and better links between regions of the country, the populous, urban south could turn to South Africa to meet its growing demand, and the center and north, which have the potential for highly productive agriculture, will be left behind.

  • The government needs to increase its spending on agriculture, which currently averages 3-5 percent of the national budget, rather than the 10 percent target set by CAADP.

  • Actions to revitalize agriculture and encourage economic transformation must be comprehensive and include investments in agro-processing, stronger connections between rural and urban areas, and increased access of smallholder farmers to fertilizers, seeds, and other technologies.

Published date: 
2011
Publisher: 
International Food Policy Research Institute (IFPRI)