Lower Growth Means More Production Needed in Mozambique

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Lower Growth Means More Production Needed in Mozambique

2:58 CAT | 13 Jan 2016

In file Club of Mozambique.

The Mozambican currency has recently lost nearly 40 percent of its value and Gove said that one of the reasons is that the country is importing more and exporting less. Indeed, imports increased by around 17 percent in the first half of last year, while exports rose only 0.5 percent.

“The private sector must work to prevent the import of products that can be produced in Mozambique,” said Gove, speaking at the opening of a bank branch.

Mozambican economist João Mosca however says that Gove’s plan will have internal repercussions, especially in cities, because the majority of consumption goods in the country are imported.

In his speech, Gove went on to lament the existence of large amounts of money being kept outside the Mozambican banking system, without referring in particular to the recent case of the two Mozambicans arrested in South African with more than seven million dollars hidden in their car. “This is harmful to the economy,” he said.

The Mozambican economy is facing a combined drop in the value of the metical and a decrease of foreign exchange and inward investment, which Mosca points out the Mozambican authorities, the Bank of Mozambique included, were alerted to a long time ago.

Mozambican President Filipe Nyusi also recently said it was not appropriate to import food that could be produced in the country, and announced that he would adopt measures aimed at encouraging the agricultural sector to reduce external dependency and increase exports.

President Nyusi said that importing food was a waste of the country’s resources, pointing out that only 15 percent of Mozambique’s 35 million hectares of arable land are under cultivation.

Source: VOA Português