To reform, Mozambique must stand up against pressure – report

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To reform, Mozambique must stand up against pressure – report

9:24 CAT | 22 May 2017

A report produced by the African Development Bank, the Organisation for Economic Co-operation and Development and the United Nations on African economic perspectives says the Mozambican government has to confront internal pressures, improve governance and guarantee the necessary fiscal consolidation to revive economic growth.

“A credible fiscal consolidation perspective is crucial to ensuring debt sustainability, based on commercial debt restructuring,” read the report released in Ahmedabad, India today. “The necessary political determination will face internal resistance, particularly when dealing with issues of governance and accountability, and in resolving political-military conflict,” it adds.

According to experts, economic growth in Mozambique slowed down to 4.3 percent last year, but will accelerate this year to 5.5 percent and to 6.8 percent next year.

“A recovery in coal and electricity exports, coupled with the foreseeable start of an offshore natural gas project” will be the main building blocks of Mozambican growth, which will still however remain below the average in recent years.

In the recent past, “traditional export revenues have fallen due to the slowdown in world demand”, and weather phenomena have also affected agricultural production, which, along with the logistical constraints created by the internal military political conflict, have exposed Mozambique’s vulnerabilities.

In the medium term, analysts conclude, “diversification of the domestic productive base is the path to inclusive development and economic resilience”.

Source: Lusa