The Mozambican government estimates that natural disasters have cost the country 1.3 percent of its gross domestic product (GDP) over the last 20 years, according to a report by the state news agency AIM.
The most devastating natural shocks to the economy were cyclones, floods, and severe droughts, as well as the most recent health crisis, the COVID-19 pandemic, said the AIM report released Thursday night.
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“As everyone knows, Mozambique is one of the countries most affected by natural disasters which, according to the most recent estimates, caused losses estimated at 1.3 percent of GDP over the last 20 years,” said the report, quoting Deputy Minister of Economy and Finance Carla Louveira as saying during an economic forum on the prospects for investment and financing for the economy.
The government estimates that in 2020 alone, COVID-19 negatively affected economic growth by 3.6 percent, reducing the employment rate by 1.9 percent, read the report.
The armed insurgency in Cabo Delgado province in the north, which has been exerting great fiscal pressure, also contributed to the contraction of the economy during the referred period. The insurgency ended up delaying the normal course of liquefied natural gas projects, and affected the commerce, accommodation, and mining sectors, according to the report.
Despite the adversities, the government expects an expansion of public investment for the coming years, influenced by the easing of restrictions on external financing with a new program by the International Monetary Fund, said the report.
Since 2022, there has been a notable positive evolution, with the country recording a real GDP growth rate of 4.1 percent, above the average level for the Southern African Development Community (SADC) region, which was 3.8 percent, reflecting the dynamics and recovery of the economy, said Louveira.
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The deputy minister said that the economic prospects for the medium term are positive, with an average growth rate of around 6.4 percent per year, thanks to the consolidation of economic recovery strongly influenced by the implementation of gas projects.