Mozambique: Economic development underpinned by major projects

21 December 2007

Maputo, Mozambique, 21 Dec – Mozambique’s economy is recording notable advances, but this growth is largely supported by major projects, an International Monetary Fund official said Wednesday.

Felix Fisher, the IMF’s Maputo-based representative, said Mozambique lacks strong growth among its small to medium-sized enterprises, which has an impact on job creation. Major projects make less of a contribution to boosting employment, although they provide more tax revenues to state coffers.

Briefing reporters in Maputo on the IMF’s evaluation of it Policy Support Instrument (PSI) accord with Mozambique in the area of economic policy, Fisher said the country’s economy had expanded by 7.6 percent in the first six months of this year.

“The economy is growing mainly due to the major projects and extensive agriculture. There is also growth in construction, owing to growth in mega-projects,” added Fisher.

“The government is working to adopt a tax system so that this contribution will be more than in the past,” he added, a reference to the widening of the tax base and better efficiency in collecting revenues.

The IMF approved its PSI for Mozambique in June, 2007, with the intention of supporting economic reform, consolidating macroeconomic stability in the face of increasing foreign assistance, promoting structural reforms and implementing a wide agenda of policies under Maputo’s action plan to reduce absolute poverty. (macauhub)