(2009-12-10) The Mozambican economy has managed to withstand the international financial crisis, and, according to the Bank of Mozambique, the latest statistics indicate a real annual GDP growth rate of 6.5 per cent.
The spokesperson for the central bank's board of directors, Waldemar de Sousa, told reporters on Wednesday that this growth figure refers to the 12 month period ending on 30 September. It compares to an eight per cent annual growth rate recorded in the third quarter of 2008, and 5.2 per cent in 2007.
The sectors which most contributed to growth between October 2008 and September 2009, were agriculture (with growth of nine per cent), financial services (18 per cent), public administration (13.2 per cent), hotels and restaurants (8.6 per cent), construction (eight per cent) and transport and communications (4.3 per cent).
In sharp contrast, manufacturing industry shrank by 5.2 per cent.
Where the international crisis hit hardest was in the demand for Mozambican exports. Export earnings fell by 37.2 per cent, from 2.05 billion US dollars in the first three quarters of 2008 to 1.29 billion in the same period in 2009.
The price of Mozambique's main export, the aluminium ingots produced at the MOZAL smelter on the outskirts of Maputo, has recovered somewhat. The aluminium price in October was 1,876 dollars a tonne, a 22 per cent increase on the price at the start of the year (but this was still a 27.3 per cent decline on the 2,524 dollars a tonne recorded in September 2008).
Aluminium exports for the first three quarters of the year brought the country 610 million dollars - which is a fall of over 47 per cent when compared with the 1.16 billion dollars earned by aluminium exports between January and September 2008.
Several other export products also experienced a sharp decline due to the fall in demand. Thus natural gas exports shrank by more than half, from 116 to 57.6 million dollars. Much less gas was exported than in 2008, due to plummeting demand by South African industry.
Only 16 million dollars worth of Mozambican prawns were exported, compared to 48 million dollars in the first three quarters of 2008. This was blamed on a slump in demand, which forced some of the prawn fishing fleet to stay in port.
Exports of raw cashew nuts fell by almost two thirds, from 15 million to 5.4 million. But this was due largely to a poor marketing season. Peasant farmers sold only 63,700 tonnes of nuts in the 2008/09 cashew campaign, compared to 96.500 tonnes the previous year.
Exports of processed cashew kernels showed a significant increase - from 9.4 million dollars in January-September 2008, to 10.7 million this year, an indication that the processing industry is beginning to recover.
Another traditional export crop, cotton, took heavy tumble. Cotton exports fell by 48 per cent, from 36.2 million dollars in the first three quarters of 2008 to 18.9 million in the same period this year. This fall resulted from the combination of a 21 per cent drop in the international price of cotton, and a more than 20 per cent drop in the amount exported.
The sugar industry, despite its expansion plans, exported almost 40 per cent less sugar in the first nine months of this year than in January-September 2008. So although sugar prices held up, Mozambique's earnings from sugar exports fell from 63.6 to 43.8 million dollars.
There are a couple of bright spots. There was a 10.4 per cent rise in earnings from Mozambique's second most important export, the electricity generated at the Cahora Bassa dam on the Zambezi. Electricity exports (to South Africa and Zimbabwe) rose from 179 to 197.7 million dollars.
Earnings from exports of Ilmenite, from the dredge mine at Moma, in Nampula province, operated by the Irish company Kenmare Resources, more than doubled, from 14.1 to 31.9 million dollars. Problems that occurred with Kenmare's equipment in 2008 have been corrected, and the mine is now working at full capacity.
There was also a fall of 18.3 per cent in the cost of imports. This was largely because fuel is much cheaper this year than it was in 2008. Total fuel imports fell by almost 54 per cent, from 461 million dollars in January-September 2008 to 214.1 million in the first nine months of this year. Fuel had accounted for 17.4 per cent of the total import bill in 2008, and this has now fallen to 9.9 per cent.
Grain imports fell by 2.8 per cent, from 153 to 149 million dollars, and the import of vehicles dropped by 11.5 per cent, from 196 to 174 million dollars. The import of capital goods rose by four per cent, from 355 to 369 million dollars.
Sousa also announced that Mozambique's net international reserves have steadily increased this year, and stood at 1.85 billion dollars at the end of September, enough to pay for seven months of imports of goods and services (excluding those for the mega-projects - if the large projects are included, the figure falls to 5.9 months). This is much larger than the government's target, which was for reserves of 1.49 billion dollars in September
Inflation has fallen dramatically. In the year ending September 2008, average annual inflation was 10.69 per cent. This fell to 4.61 per cent in September 2009, and 3.41 per cent in November.
Inflation from January to December 2008 was 6.19 per cent. From January to September 2009, price rises were a mere 1.37 per cent, but had risen to 2.55 per cent by the end of November. No doubt part of this success can be attributed to the government's fuel subsidy, which has frozen the prices of diesel, petrol and kerosene since March.
Since the start of the year Mozambican currency, the metical, has depreciated against the US dollar (by nine per cent), the euro (by over 16 per cent), and the South African rand (by 40 per cent).
Hence the steep increase in the prices of goods imported from South Africa. Sousa thought the depreciation useful in terms of boosting Mozambican exports. "This trend in the nominal exchange rate has allowed a recovery in the competitiveness of Mozambican exports, at an international conjuncture that is adverse from the point of view of the balance of payments", he said.
Welcome Visitor 1835128. Today is Friday, July 30th 2010
(2009-12-10) The Mozambican economy has managed to withstand the international financial crisis, and, according to the Bank of Mozambique, the latest statistics indicate a real annual GDP growth rate of 6.5 per cent.
