countryaah, Mozambique's economy has since been severely affected by
civil war and natural disasters, as well as by a shortage of
educated labor and foreign currency. This has led, among
other things, to a large debt burden and trade deficit.
The economic problems led Mozambique, with the support of
the International Monetary Fund, to introduce an economic
re-adjustment program in 1987 with the aim of increasing the
efficiency of the economy through liberalization and
privatization. For a large part of the population, the
re-adjustment program initially caused considerable
financial strain. From a national perspective, the program
seemed to have the intended effects, and the late 1990s were
characterized by increasing economic growth. The peace
agreement that set the stage for the civil war in 1994 was
not least important in this trend.
In 2000, the positive development of a major flood
disaster, which devastated large parts of the infrastructure
and hit the agricultural sector, was severely broken. Aid
efforts from the outside world and foreign investment led
the country to recover, and for over a decade Mozambique
experienced strong economic growth. However, Mozambique is
still one of the world's poorest countries.
Agriculture is Mozambique's most important industry in
terms of employment. However, the consequences of civil war
and drought cause agricultural production to fluctuate
widely. The main forage crops are cotton, sugar and cashew
nuts. The most important food crop is cassava, but corn,
bananas, rice and coconuts are also grown for self-catering.
However, the country is not self-sufficient with food. It
depends, among other things, on infrastructure deficiencies,
which prevent transport from the fertile northern parts of
Agricultural policy after independence was characterized
by an investment in a collective village-oriented
agriculture. In 1976, more than 1,500 villages and several
agricultural cooperatives and state-owned large farms had
been formed. Most state agriculture, however, has proven to
be uneconomical, and the need to increase production from
smallholder farmers has meant increased cutting and
privatization of state agriculture and increased support for
The flood disaster of 2000, which left some 1 million
people homeless, hit the agricultural sector hard.
The forest industry has developed along the railroad from
Harare in Zimbabwe to Beira and in the rainier Zambéziia
district. Exports from the forest industry mainly consist of
sawn timber and timber for the construction industry and are
mainly directed to South Africa. The majority of felling is
used as firewood.
Fishing has become increasingly important for
Mozambique's economy. Not least, shrimp fishing is very
important, and shrimp are among the country's most important
export goods. Mozambique has worked with South Africa since
the early 1980s to develop the fishing industry. The country
has also signed development agreements with Italy and Japan.
Several countries in the EU have purchased fishing rights in
Mozambique has large mineral deposits, but the extraction
was limited for a long time as a result of the civil war.
Coal is mined at Moatize near Tete, iron at Cassinga and a
larger yet untapped deposit at Namapa. Gold deposits are
found in the drainage area of the Revue and Chua rivers
and bauxite deposits near Tete. Mozambique also has large
deposits of tantalum, but only a limited amount is exported.
New deposits of manganese, graphite, platinum, nickel,
uranium, asbestos, iron, diamonds and natural gas have also
In 2000, the operation of the large Mozal aluminum
smelter began just outside Maputo. The smelter is the
largest foreign investment made in Mozambique and was
financed by South African and Japanese companies as well as
with loans from the World Bank.
Mozambique's commercial energy supply comes mainly from
the hydroelectric power plant at the Cabora Bassa dam and a
coal power station in Maputo. As a result of an agreement
from the 1980s, almost all electricity produced is exported
cheaply to South Africa, but through several large power
plant projects and plans to renovate the power grid, a
larger proportion will stay in the country, while Mozambique
will be able to become a major electricity exporter to
several countries. However, for the majority of the
population, firewood is still the most important source of
energy. In parallel, investments are being made in the
extraction of natural gas, coal and oil. A 1,000 km long gas
pipeline extends from the Pande and Temane gas fields in the
province of Inhambane to South Africa.
Although the state encourages the spread of industry to
Beira and its northern parts, nearly half of Mozambique's
industrial companies are located in Maputo or its vicinity.
However, during the early 1980s, the industrial base
expanded somewhat through the growth of, among other things,
the textile industry and the brewery industry.
The industrial sector, like many other sectors, was
adversely affected by the fact that many educated Portuguese
left the country at independence, the lack of raw materials
and spare parts, and transport disruptions due to the civil
war. After the end of the war, the industrial sector was
privatized. The aluminum smelter Mozal, which accounts for
much of the country's exports, is of great importance.
Mozambique's trade and current account balance is
characterized by large deficits. The civil war was one cause
(including reduced exports and tourism and costs of
importing military equipment). Other factors include
occasional falling world market prices for important export
goods as well as a reduction in Mozambican labor in the
South African mining industry.
Exports are dominated by aluminum, shrimp, cotton and
sugar. Imports are dominated by machine parts, vehicles and
fuel. Dominant export markets are India, the Netherlands and
South Africa, while South Africa, China and the United Arab
Emirates are the most important importing countries. Trade
with neighboring countries such as Malawi and Zimbabwe is