africa development Economy Government Mozambique

Mozambique: Plan for 2019 envisages 4.7 per cent growth rate

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Mozambican Prime Minister Carlos Agostinho do Rosario on Tuesday presented to the country’s parliament, the Assembly of the Republic, the government’s economic and social plan for 2019, which envisages a growth rate of 4.7 per cent.

Growth in 2017 was 3.7 per cent, and fell to 3.3 per cent in the first half of this year. Nonetheless the optimistic forecast for 2018 as a whole is for growth of 5.3 per cent.

The 2019 growth rate relies heavily on mining. The extractive industry is expected to grow at a rate of 14 per cent. Among the main contributors to this will be the graphite mines in the northern province of Cabo Delgado (where production is expected to increase by over 273 per cent), rubies (up by 92 per cent), tantalite (91 per cent increase), and coking coal (up by 18 per cent).

It will still be some years before the natural gas in the Rovuma Basin, off the Cabo Delgado coast, comes on stream. Production of gas from the Pande and Temane fields in the southern province of Inhambane is expected to remain steady at around 194 million gigajoules a year. But production of the condensate associated with the gas is expected to rise by 62.5 per cent to over 675,000 barrels.

Agriculture is forecast to grow at 5.5 per cent in 2019. There should be a 12 per cent growth in grain production to 3.5 million tonnes, and a 13 per cent rise in root crops (mostly cassava) to 16.9 million tonnes.

A six per cent growth s forecast or the fisheries sector. Most of this will come from artisanal fishermen, whose predicted catch is about 389,000 tonnes. This compares with only 28,000 tonnes from commercial fishing and 5,500 tonnes from aquaculture.

Manufacturing industry is expected to grow at 3.1 per cent. Most of the growth will be in cement industry (10 per cent), food processing (nine per cent), and drinks (six per cent).

An overall growth rate of 2.8 per cent is forecast for transport. Within this sector the largest growth, 15.6 per cent, is projected for rail traffic.

The other major macro-economic targets for 2019, Rosario said, are an annual inflation rate of around 6.5 per cent, a rise in the value of the country’s exports from 4.9 billion US dollars this year, to 5.2 billion dollars, and net international reserves sufficient to cover six months’ imports of goods and non-factor services.

Inflation is already low, at just 2.87 per cent for the first ten months of 2018, as measured by the consumer price indices of the three largest cities (Maputo, Nampula and Beira). Yearly inflation (1 November 2017 to 31 October 2018) was 4.75 per cent. There is thus a very good chance that inflation for all of 2018 will be well under five per cent.

Rosario noted that in October 2016, the annual inflation rate had been 26 per cent. Cutting inflation to the current level was “another notable gain resulting from implementing the government’s five year programme”.

He stressed that, in the coming year, the government “will prioritise diversification of the economy, improving the business environment, and implementing combined fiscal and monetary measures that will stimulate the economy and keep inflation stable”.

Source: AIM via Club Of Mozambique

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