Mozambique: Aid was only 59% of expected in 2020; GDP fell by 1.28% in 2020 – By Joseph Hanlon

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Mozambique: Aid was only 59% of expected in 2020; GDP fell by 1.28% in 2020 – By Joseph Hanlon

10:21 CAT | 02 Mar 2021

Aid was only 59% of expected in 2020; GDP fell by 1.28% in 2020, less than the -5.5% for SADC, with the biggest falls in the extractive industry (-17%, notably big drops in coal, graphite and rubies) and tourism, hotels and restaurants (-23%), mainly due to Covid-19, according to the Balance of the Execution of the Economic and Social Plan for 2020, published 19 February by the Ministry of Economy and Finances (MEF).

Aid was well below expectations – government planned on $557 mn of aid but received only $330 mn. It planned on foreign loans of $730 mn but obtained only $515 mn. Part of the shortfall was made up with government revenue 110% of the plan ($315 mn above plan) and domestic borrowing of $770 mn which was double the level of 2019. But it was not enough to cover the foreign gap, and spending was only 90% of plan, with the investment budget cut by 27%.

Inflation was 3.14% with significant increases in food prices, although domestic food production rose 12%. Commercial fishing fell by 60% compared to 2019. Reserves of $4 billion would cover six months of imports.

The exchange rate has been steady in 2019 but value of the Metical fell by 18.3% from $1 = MT 63 in December 2019 to $1 = MT 74.5 in December 2020. In the 3rd quarter, the biggest exports were aluminium ($661 mn), coal ($490 mn), and electricity ($348); the biggest agricultural export was tobacco ($91 mn).

The Balance of the Execution of the Economic and Social Plan for 2020 also contains details of education and health and is on https://www.mef.gov.mz/index.php/documentos/instrumentos-de-gestao/plano-economico-social-pes/pes-2020/-42/1204–272/file (194 pages)

Even more detailed is the Relatorio da Execucao do Orcamento do Estado (REOE) published 18 February on https://www.mef.gov.mz/index.php/documentos/instrumentos-de-gestao/-21/reo-2019/791-reo-janeiro-a-dezembro-de-2019 (761 pages)

The 2021 Economic and Social Plan for 2021 (presented to parliament 23 December 2020) is on https://www.mef.gov.mz/index.php/documentos/instrumentos-de-gestao/plano-economico-social-pes/pes-2021-1/1181–255/file (143 pages)

By Joseph Hanlon

Source: News reports & clippings