Mozambique is among the ten African countries with the highest growth in foreign reserves in 2023, according to data published on Thursday, August 29, by the Business Insider Africa news portal. The country recorded a 32.3% increase in its reserves, placing it eighth in the continental ranking.
According to the portal, the growth of foreign reserves is fundamental to maintaining a country’s financial health, especially in Africa, where fluctuations in export revenues, particularly oil, have a significant impact on national economies.
“Oil accounts for more than 36% of exports in Africa, which means that the prices of raw materials play a crucial role in the exchange rate and foreign reserves, generating important profits for African nations,” highlights the Business Insider Africa report.
Even in the face of an adverse global economic scenario and pressure from raw material prices, crude oil sales have been decisive in the recovery of the continent’s foreign exchange reserves. According to Afreximbank’s 2024 report on African trade, entitled “Climate Implications of AfCFTA Implementation”, Africa’s foreign exchange assets increased by around 2.6% in annual terms, totaling 26 trillion meticais (411.9 billion dollars) in 2023, a positive reversal compared to the 2.3% drop recorded in 2022.
In addition to commodity prices, the report attributes the improvement in foreign reserves to factors such as the sustained inflow of capital, support from international, bilateral and regional development finance organizations, and the increase in tourist arrivals and emigrant remittances.
These developments have contributed to a slight improvement in the region’s average import coverage, which will rise from four to five months in 2023, above the minimum requirement of three months stipulated by the IMF.
According to Business Insider Africa, the ten African countries with the highest growth in foreign reserves in 2023 are: São Tomé and Príncipe (105.4%), Chad (83.6%), Republic of Congo (59.7%), Liberia (43.4%), Central African Republic (35.9%), Lesotho (35.3%), Equatorial Guinea (32.3%), Mozambique (32.3%), Eritrea (30.1%) and Tunisia (28.1%).
