Mozambican government proposes structural measures to diversify economy

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Mozambican government proposes structural measures to diversify economy

12:46 CAT | 17 May 2016

Lusa (File photo)

The Mozambican government said in Maputo on Wednesday that the country would undertake structural measures to diversify the economy and lessen its dependence on mineral resources.

“It is in periods of downturn that structural measures must be undertaken. It has become imperative to find mechanisms to enable the country to survive the volatility of prices of energy resources,” Minister of Justice, Constitutional and Religious Affairs Isac Chande told a seminar on the impact of reduced prices of mineral raw materials on sustainable development.

Noting that Mozambique identified in the last ten years resources of more than 20 billion tons of coal and more than 200 trillion cubic feet of gas, Chande said that the country must ensure that the gains generated from these resources should be channelled into diversification of the economy.

“We have to ensure the necessary economic links between mining and other sectors, such as agriculture and manufacturing,” he said.

The minister pointed out that the mining industry is experiencing uncertainty, with the duration of the current downturn unknown, a situation that requires greater transparency and sustainable exploitation of energy resources.

Speaking at the same event, the resident coordinator of the United Nations Programme for Development (UNDP), Marcia Castro, said that the price decline has reduced the capacity of energy resources to perform a decisive role in reducing poverty in Africa, a situation that should alert countries dependent on extractive industries to the need for diversification.

“The challenge that countries dependent on energy resources face is how to make the current price crisis an opportunity for diversification of the economy,” said Castro.

The price drop in oil, gas and coal, she went on to say, exposed the vulnerability to external shocks of countries dependent on extractive industries.

“The value of raw materials has contributed to huge economic growth in Southern Africa, but the fall in prices caused by the dependence on energy resources reveals great vulnerability,” she said.

Source: Lusa