Mozambique is currently defined as an “authoritarian regime,” with a rating of less than four out of ten possible points, according to the Democracy Index of the Economist Intelligence Unit (EIU).
Noting that Mozambique’s neighbours Zimbabwe and eSwatini (Swaziland) have the same classification, the EIU reported the index for Mozambique had worsened, falling from 4.02 points in 2016 and 2017, considered a “hybrid regime”, to 3.85 points in 2018, and coming under the classification of “authoritarian regime.”
The latest report on Mozambique said that four indicators remain unchanged, but there has been a drop in the ranking of the country’s electoral process due to irregularities and violence against members of the opposition during and after the municipal elections held in October. 2018.
In economic terms, the EIU report “roughly” maintains forecasts from the previous one report, with a weak growth rate of 3.4% in 2019, before increasing to an average of 5.3% per year in the 2020/2023 period.
The document once again refers to the fact that the economy should start to benefit from preparations for natural gas operations in two blocks in the Rovuma basin. The parties have said they expect to start operating in 2023/2024.
But it also said that there is an over-supply in the world market for natural gas, and it is very likely that major onshore construction works, particularly processing plants, will start only after 2020.
The EIU said that bank credit has been contracting for some key sectors, such as agriculture, telecommunications and construction, due to a stricter monetary policy, which suggests that the performance of these sectors will be weak throughout 2019.
Private consumption, which is expected to grow at 3.7% this year, will tend to slide to negative levels by 2023, offset by public spending, which will see growth rates of between 4.0% in 2019 and 5.9 % by 2023.
Gross fixed capital formation, or investment, which fell by 12.5% in 2018, is expected to grow 8.2% this year, before almost literally exploding at rates of between 55.0% in 2020 and 30% in 2023. (macauhub)