Sunday, May 26, 2024

See which activities sustain GDP growth in Mozambique

Mozambique, like many African countries, has a diversified economy, driven by various sectors that play a key role in economic development. In this article, we will learn about the main activities that contribute to the growth of the country’s Gross Domestic Product.

Agriculture is Mozambique’s main economic activity, employing around 70% of the total working population and accounting for 26% of GDP (2023). There is a wide variety of crops and agricultural products in Mozambique, and according to the FAO, the country is the world’s 18th largest producer of cassava (2022). The most cultivated products include oilseeds, maize, beans, rice and sugar. 9% of the total active population works in the industrial sector. Important mineral exports include aluminum, coal, iron ore, gold, bauxite, graphite, marble and tantalite.

Recent figures released by the Bank of Mozambique revealed that the extractive industry contributed around 1.7 billion dollars to exports for the year 2022, with the products that stood out the most being mineral coal, heavy sands, natural gas, rubies, sapphires and emeralds. Currently, the sector has seen significant growth, rising from 1.8 of the Gross Domestic Product in 2011 to close to 10.6 in 2022.



In addition to the export goods mentioned above, electricity is one of Mozambique’s most valuable exports. Cahora Bassa is one of the largest dams in the world. 65% of the electricity produced by Hidroeléctrica de Cahora Bassa (HCB) is exported to South Africa. The remaining 35% is divided between electricity for the northern regions of Mozambique and exports to Zimbabwe.

An important natural resource found in Mozambique is liquefied natural gas (LNG). Foreign energy companies such as ENI have discovered significant deposits of natural gas in the Rovuma Basin, off the coast of Cabo Delgado. Considering the large size of the gas reserves, Mozambique has the potential to be one of the largest LNG markets in the sub-Saharan region. There are three major LNG projects with investments in Mozambique’s LNG industry. For example, in 20222, the country made its first gas export from the Coral Sul project, raising millions of dollars.

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