Mozambique’s economic growth outperforms regional average – Further Africa

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Mozambique’s economic growth outperforms regional average – Further Africa

6:39 CAT | 13 Feb 2024

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The country’s Council of Ministers presented the results and impacts of the country’s 2023 economic, social and budget plan relating to last year’s performance showing Mozambique’s economic growth outperforms regional average.

Economic growth for 2023 reached 5%, compared to 4.4% in 2022, driven by the extractive industries, tourism, agriculture, transport and communications sectors, among others. This stems from the policies and reforms implemented by the government over the past year.

Notably, Mozambique’s economic expansion over this period surpassed the Southern African Development Community’s regional average, positioning it as one of the fastest growing economies in the SADC bloc.

This momentum signifies the continuation of a positive trend observed over the past four years, with sound medium to long term economic prospects.

The growth also reflects the ongoing economic reform measures adopted by the Government, which catalysed private sector activity and attracted new investments.

In this context, a favourable tendency materialised regarding average inflation, which registered 7.1% against an initial forecast of 11.5%.

Net international reserves stayed above the 3 months threshold envisioned in the Economic and Social Plan and reached 4.3 months of imports coverage for non-factor goods and services. This translates into enhanced credibility and external shock-absorption capacity regarding the balance of payments.

Over the period in review, the State’s revenue relied on approximately 70% of domestic sources against 64.3% in the previous year, epitomising budget sustainability efforts in the long run resulting from the Government’s reinforced tax collection.

Total state revenue increased by 14.2%, equivalent to meeting 91.4% of the target. Public expenditure grew by 7.5%, achieving 97.4% of the projected spend.

The current account deficit also improved markedly due to the substantial reduction in exports value from the major projects.

By Elizabeth Khumalo

Source: Further Africa