The Prime Minister of Mozambique, Carlos Agostinho do Rosario has predicted that his country’s economy is recovering, after the crisis of 2016, and the government expects the growth rate to rise to eight percent a year, as from 2022.”But this is entirely dependent on the liquefied natural gas (LNG) projects in the Rovuma Basin, off the coast of the northern province of Cabo Delgado”, Do Rosario told the Mozambican parliament on Wednesday.
The economy grew 4.6 percent last year driven by recovering of coal, aluminium, gas and improved farm output.
Do Rosario said the Mozambican economy is set to return to levels of economic growth seen before its crippling 2016 debt crisis,
The Prime Minister admitted that gas revenues are a narrow basis on which to build the economy.
“Our economy cannot be dependent only on the extractive industry and to generate more employment and income, we have to bank on diversifying our economy” he said.
That meant, in the first instance, banking on agriculture “in its entire value chain, from production to agro-processing and marketing, in order to capitalise on the job opportunities generated in the various phases” he added.
He said “banking on agriculture is the right path to increasing income, reducing the cost of living, and increasing self-sufficiency in foodstuffs, which will allow the country to reduce its outside dependence”.
He blamed the economic crisis that had hit the country in 2016 on such factors as the fall in the prices of some of Mozambique’s key exports, natural disasters such as the floods of early 2015, and the severe drought of 2016, and the suspension of financial aid from the 14 donors who used to provide direct support to the Mozambican state budget.
The shocks the Mozambican economy suffered in 2015-2016, the Prime Minster said, led the government to conclude “we must continue efforts to improve our productive base through measures to stimulate increased production and productivity, and thus we will be able to export more and generate resources to finance imports”.
The government was working to restore confidence in Mozambique among the international financial markets, and to bring the country’s public debt down to sustainable levels.
For the first time, he revealed that the government has negotiated a restructuring of Mozambique’s debt with China and India “in order to release resources to finance the priority actions of the government’s five year programme”.