Intra-SADC Trade Performance Review 2006: Chapter 4: Mozambique

Year of publication: 
2006
Author(s): 
Adriano Ubisse, Mozambique Ministry of Planning and Development
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Mozambique's economic growth for the last decade has averaged more than 5% per annum. However, like most SADC countries, the structure of trade in Mozambique has not changed over the medium term, owed in part to supply-side constraints such as the shortage of skilled labour and the lack of free market institutions to support economic growth, as well as the lack of infrastructure including a well-maintained telecommunications system. Mozambique’s trade deficit is very large and is a result of the economy’s low productive base and existing pattern of exports (mostly primary products) and imports (mostly manufactured goods).

The country’s main export commodities include traditional crops such as cashew nuts, cotton, tobacco, marine products and sugar, and significantly, new commodities such as natural gas, electricity, and aluminium. Gas and electricity are exported to South Africa and aluminium is exported to the EU. Imports are more diversified than exports, both in terms of commodity composition and sources, and imports are comprised predominantly by consumer and capital goods, especially those needed by the country’s mega-projects.

Mozambique’s high dependence on export revenue from a few export products poses serious concerns for the government, especially in terms of its economic growth and poverty reduction goals.