Econ­omy now in bet­ter shape

Finweek English Edition - - Economic trends & analysis - HOWARD PREECE

THE SE­VERE FLOODS THAT HIT Mozam­bique, once again, in Fe­bru­ary this year bore tes­ti­mony to the strong and on­go­ing progress the coun­try is mak­ing. In 2000-2001 cy­clones took a dev­as­tat­ing toll on the coun­try.

Over 700 peo­ple were killed and eco­nomic growth tum­bled to only 2,1% in 2001 com­pared to the an­nual av­er­age level in the decade be­fore (and in the pe­riod since) of 7%-8%. For all the eco­nomic and po­lit­i­cal progress it had made since the end­ing of bit­ter civil war in 1992, Mozam­bique still couldn’t be­gin to cope with those flood­ing dis­as­ters.

To­day the sit­u­a­tion is dra­mat­i­cally dif­fer­ent. Deaths in this year’s heavy flood­ing were con­tained to 10. The econ­omy has also shown vastly greater re­silience than in the cri­sis times of six to seven years ear­lier.

Mike Hughes, spokesman for the United Na­tions’ World Food Pro­gramme (WFP) says: “If you’re look­ing for a suc­cess story of an African gov­ern­ment that’s try­ing to make things bet­ter for its peo­ple, Mozam­bique is a very good ex­am­ple.

“Their re­sponse to flood­ing this time is mas­sively bet­ter. The gov­ern­ment is do­ing a lot this year to try and mit­i­gate the im­pact.

“They’ve evac­u­ated ev­ery­one from the re­ally crit­i­cal ar­eas. They’ve made sure that the UN and the aid or­gan­i­sa­tions are all work­ing to­gether to bring a co-or­di­nated re­sponse.”

Stan­dard Bank’s eco­nomics de­part­ment notes: “Nor­mal rains are ex­pected in the rest of this year, and food prices are ex­pected to ease over the short term as har­vests en­ter the mar­ket. “The in­creases in in­ter­na­tional oil prices and the dam­age done by the re­cent floods sug­gest that in­fla­tion will edge up­wards in the com­ing months.

“How­ever, the prom­ise of higher food sup­ply from up­com­ing har­vests should ease over­all in­fla­tion in the sec­ond quar­ter of 2007.”

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