Poorest bear the brunt of low economic growth in Mozambique – World Bank

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Poorest bear the brunt of low economic growth in Mozambique – World Bank

1:10 CAT | 13 Dec 2016

AP (File photo)

Mozambique’s growth in 2016 will be 3.6 percent, slightly above half of the 6.6 percent last year, with half the country’s 26 million inhabitants bearing the brunt.

The figures are from the new update on Mozambique published yesterday by the World Bank, which notes that the country is plunged into a complex crisis brought on by the lower price of raw materials, natural disasters and conflict.

To compound the scenario, Mozambique is struggling with a withdrawal of support from key donors following the discovery of US$1.4 billion of hidden debt in April this year, which has also reduced investor confidence.

Foreign direct investment and exports have declined and are projected to fall 17 and eight percent, respectively, according to the World Bank.

The Mozambican currency depreciated by 42 percent against the US dollar in the first ten months of this year, putting the country in a worse situation than Angola and Nigeria, also exporters of raw materials.

“Price rises hit the poorest hardest,” says Shireen Mahdi, senior economist at the World Bank for Mozambique, noting that “since April, inflation is estimated to have been nine percent higher for the 40 percent poorest” Mozambicans.

The World Bank document notes that projected natural gas production in the north creates the expectation that the country will recover to 6.6 percent of economic growth by 2018, but it warns that restoring confidence and economic stability depends on success in debt restructuring and the results of the independent audit of the concealed debts.

Source: Voa Portugues