Boom times con­tinue

Finweek English Edition - - Economic trends & analysis - HOWARD PREECE howardp@fin­week.co.za

LIKE OL’ MAN RIVER, the Mozam­bique econ­omy just keeps rolling along.

In the pe­riod 1992-2002, the coun­try en­joyed a higher av­er­age an­nual rise (8,4%) in real gross do­mes­tic prod­uct (GDP) than any other na­tion ex­cept China (mis­lead­ing re­cov­ery sit­u­a­tions in Bos­nia and Liberia aside). Mozam­bique con­tin­ues to boom. The Or­gan­i­sa­tion for Eco­nomic Co-op­er­a­tion and De­vel­op­ment (OECD) says growth was 7,7% in 2005.

Of­fi­cial Mozam­bique es­ti­mates put the rise in real GDP at 7,9% last year, and fore­casts for 2007 are sim­i­lar.

In the late Eight­ies, how­ever, Mozam­bique was a clas­sic “bas­ket case”. There was zero growth – which means a sharp de­cline on a per capita base – over 1982-92.

This was be­cause of a com­bi­na­tion of the dev­as­ta­tion of civil war and wretched eco­nomic mis­man­age­ment by the Marx­ist Fre­limo gov­ern­ment, headed for years by Samora Machel.

How­ever, though Fre­limo has held on to power – in the mid to late Nineties it was closely pressed by the Renamo op­po­si­tion, but that chal­lenge has faded – it has long dumped much of its old, de­struc­tive hard-line so­cial­ism.

As a re­sult, it has risen well off the bot­tom rung of the poor na­tions. Kenya, Zam­bia and Nige­ria are among many African coun­tries now trail­ing Mozam­bique.

The Econ­o­mist Intelligence Unit ex­pects con­sumer price in­fla­tion to ease ap­pre­cia­bly in Mozam­bique in 2007 to about 9,6% against 13,2% in 2007.

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