Mozambique WT/TPR/S/209/Rev.1 
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I. ECONOMIC ENVIRONMENT 
(1) MAIN FEATURES OF THE ECONOMY  
1. Mozambique is situated on the south east coast  of Africa, on the Indian Ocean.  Mozambique 
shares common borders with Tanzania to the north , South Africa to the south, and (landlocked) 
Zimbabwe, Zambia and Malawi to the west, for whic h Mozambique acts as a transport gateway.  In 
2007, its population was around 20.4 million (Table I.1), and demographic growth was 2.4% per 
annum on average over the 2001 -07 period.  Along with several of its neighbours, and in particular 
with leading trade partner South Africa, Mozambique is a member of the Southern African Development Community (SADC), whose central objec tive is regional integration (Chapter II(3)(ii)), 
and Mozambique benefits from preferential access to  the markets of the European Communities and 
the United States. 
2. In 2007, Mozambique's GDP was estimate d at around US$8.1 billion (excluding the 
contribution of the informal sector), and was estim ated at US$9.7 billion in  2008.  Per capita GDP 
was estimated at US$398 in 2007, about 50% higher than the level of 2001, which was US$231;  income distribution remains a problem. (Table I.1) .  Mozambique has made an impressive economic 
recovery since the end of the civil war in 1992.  However, as a least developed country (LDC) its 
human development index is relatively lo w;  in 2005, Mozambique ranked 172
nd (out of 
177 countries) on the UNDP’s human development index.1  In 2007, life expectancy in Mozambique 
was about 42 years;  the prevalence of HIV/AIDS among the population aged 15 to 49 was estimated at 16.2% in 2004
2, and HIV/AIDS was declared a national emergency in that year. 
Table I.1 
Selected macroeconom ic indicators, 2001-08  
  2001 2002 2003 2004 2005 2006 2007 2008a 
Miscellaneous         
Population ('000) 17,653.0 18,078.0 18,514.0 18,962.0 19,420.0 19,889.0 20,367.0 20,846.0 
Life expectancy 44.5 44.0 43.6 43.2 42.9 42.5 42.1 42.1 
Secondary school enrolment 
ratio, gross (per cent) 7.0 8.0 9.5 11.0 13.0 13.2 13.2 13.2 
GDP (US$ million) 4,075. 7 4,201.0 4,666.7 5, 698.3 6,578.8 7,215. 0 8,106.0 9,728.0 
GDP per capita at constant 
price 2003 (US$) 230.8 243.4 252.1 279.6 289.8 362.9 398.2 466.7 
Real GDP (percentage change, 
constant prices, 2003 = 100) 12.3 9.2 6.5 7.9 8.4 8.5 7.3 7.0 
Terms of trade (annual 
percentage change) -2.9 -3.7 -1.3 9.4 5.3 27.3 4.4 .. 
Gross official reserves (end of 
period - US$ million) 727 825.0 988. 0 1,160.0 1,103.0 1,241.0 1,524.0 .. 
   In months of imports, c.i.f. 5.2 5.4 5.4 5.8 4.6 4.4 5.0 .. 
Net present value of public 
external debt to exports of 
goods and services (%) 109.8 92.0 102.0 92.0 108.0 63.0 55.0 .. 
Debt service ratiob (end-period)   6.9 6.4 6.1 4.7 4.6 5.3 5.4 .. 
Table I.1 (cont'd) 
                                                      
1 UNDP (2007). 
2 HIV/AIDS - The picture.  Viewed at:  http://www.unicef.org/mozambique/hiv_aids_2045.html 
[21 July 2008]. WT/TPR/S/209/Rev.1 Trade Policy Review 
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  2001 2002 2003 2004 2005 2006 2007 2008a 
Sectoral distribution of GDP Percent of GDP 
Agriculture including livestock, 
hunting, forestry and fisheries 25.2 25.6 25.4 24.6 24.2 24.7 24.5 23.0 
Mining and quarrying 0.5 0.5 0.6 0.9 0.9 0.8 1.3 1.3 
Manufacturing 13.7 13.6 15.0 15.7 14.8 14.5 13.3 13.5 
Electricity and water 4.4 4.4 4.6 4.9 5.3 5.5 5.6 5.6 
Construction 3.3 3.3 3.4 3.0 3.1 3.4 3.2 3.4 
Commerce 9.9 9.5 9.5 9.5 9.8 10.0 10.9 10.8 
Vehicle repair 0.5 0.4 0.4 0.4 0.4 0.4 0.3 0.4 
Hotels and restaurants 1.5 1.5 1.5 1.4 1.5 1.5 1.6 1.6 
Transport, storage and communication 9.8 9.7 9.4 9.5 9.5 9.6 10.0 10.1 
Financial activities 3.0 3.2 3.3 3.9 5.3 5.5 5.6 5.5 
Real estate and location 
services 10.9 10.1 9.6 9.4 8.8 8.2 7.7 7.5 
Public administration, defence, 
and obligatory social insurance 3.9 3.8 3.7 3.6 3.6 3.6 3.6 3.6 
Education 3.4 3.2 3.3 3.4 3.5 3.5 3.7 3.8 
Health and social work 1.2 1.2 1.2 1.2 1.2 1.2 1.3 1.4 
Other collective service 
activities  2.4 2.2 2.1 2.0 1.9 1. 8 1.7 1.7 
Total value added (basic prices) 93.5 92.4 93.0 93.5 93.8 94.2 94.3 .. 
Financial intermediation 
services indirectly measured  -1.5 -1.7 -2.6 -2.8 -2.7 -3.2 -3.3 2.8 
Taxes 8.0 9.2 9.6 9.3 8.9 9.0 9.0 .. 
National accounts  
   Consumption 85.9 100.5 101.5 99.2 96.2 91.9 91.2 .. 
        Private  72.4 88.2 88.7 85.4 83.3 79.5 79.2 .. 
        Government  13.5 12.3 12.8 13.8 13.0 12.3 11.9 .. 
   Gross fixed capital formation 20.0 30.0 22.3 18.6 18.7 17.7 18.0 .. 
   Changes in inventories 5.9 -0.4 0.2 -0.3 -1.0 -0.7 -0.9 .. 
Exports of goods and non-
factor services 21.2 24.9 26.3 29.8 30.5 30.4 28.1 .. 
       Goods  17.0 17.7 20.6 25.8 26.5 26.9 24.2 .. 
Non-factor services 4.1 7.2 5.6 4.0 4.0 3.5 3.9 .. 
Imports of goods and non-
factor services 32.9 55.1 50.2 47.3 44.4 39.3 36.3 .. 
       Goods  26.1 43.7 39.4 39.0 36.1 31.9 30.1 .. 
Non-factor services 6.8 11.3 10.8 8.3 8.3 7.4 6.2 .. 
Gross domestic savings 
(excluding grants)  7.6 10.5 6.0 6.2 1.9 3.1 2.8 3.1 
Government  -1.0 -1.1 -1.4 -1.6 0.2 0.8 0.6 0.2 
Prices and interest rates     
Inflation (CPI, percentage 
change)c 9.1 16.8 13.4 12.7 7.2 13.2 8.2 7.3 
Interest rate (time deposit)d 6.3 7.5 8.2 7.5 7.4 8.8 10.3 10.1 
Table I.1 (cont'd ) Mozambique WT/TPR/S/209/Rev.1 
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  2001 2002 2003 2004 2005 2006 2007 2008a 
Monetary aggregates (end 
period)    
Money supply (M1)  16.3 16.1 17.1 16.5 18.2 20.0 20.9 21.8 
Money supply (M2)e  29.2 28.0 28.3 24.9 28.6 30.9 33.3 34.6 
Credit to private sector   12.6 12.9 11.4 9.4 11.8 13.4 13.8 15.1 
Exchange rate         
Conversion rates: meticais per 
US$ (annual average)  20.7 23.9 23.9 18.9 24.2 26.0 23.8 24.1 
Real effective exchange rate 
(end of period)f .. -6.3 -2,7 17,5 -6,3 1,8 6.5 .. 
Nominal effective exchange 
rate (end of period)f .. .. -10,9 17,9 -14.0 -3.0 2.2 .. 
Central Government finances         
Total revenue and grants 26.1 22.7 22.4 19.6 20.7 26.1 26.0 29.7 
    Tax revenue 11.0 11.0 12.0 11.3 12.2 13.2 14.4 14.4 
    Non-tax revenue 1.4 1.5 1.0 0.9 1.9 2.1 2.0 2.4 
    Grants 13.7 10.3 9.5 7.3 6.6 10.8 9.6 12.8 
Total expenditure and net 
lending 32.1 27.9 26.5 23.7 22.9 27.5 29.0 35.1 
    Recurrent expenditure 13.5 13.9 14.4 13.8 13.9 14.4 15.8 16.6 
    Capital expenditure 15.4 12.5 11.7 9.1 8.6 12.0 12.1 16.6 
    Net lending 3.2 1.5 0.4 0.8 0.4 1.0 1.1 2.0 
Overall balance (before arrears 
clearance, cash basis) -19.9 -17.3 -14.0 -11.7 -8.9 -12.5 -13.5 -18.3 
Overall balance (after arrears 
clearance, cash basis) -6.1 -7.0 -4.5 -4.4 -2.3 -1.7 -3.9 -5.5 
.. Not available. 
a Data are based on projections. 
b Percent of exports of goods and services;  2006 and 2007 data are based on projections. 
c Index (2000 = 100), period averages. d Six-month time deposit at commercial banks - weighted average of monthly deposit rates. 
e Includes all foreign currency deposits held in commercial banks. 
f Minus sign means depreciation. 
Source: IMF (2008), Country Report No. 08/15 , January;  IMF (2008), Country Report No. 08/220 , July;  IMF (2005), 
Country Report No. 05/311 , August;  IMF (2005), 2005 Article IV Consultation, Country Report N° 05/318 , 
September;  IMF (2004), Statistical Appendix, Country Report N° 04/51 , March;  Government of Mozambique 
(undated),  Instituto Nacional de Estatistica. Viewed at: http://www.in e.gov.mz/indicadores_macro_ 
economicos/cn/indicadores_m acro_economicos/cn/PIB/pib_oDespesa;  IMF (2008), International Financial 
Statistics , IFS Cd-Rom, version 1.1.82;  an d African Development Bank (2008), Selected Statistics on African 
Countries, Vol. XXVII. 
3. The leading sector of the Mozambican econom y is services (accounting for approximately 
55% of nominal GDP in 2007), followed by agriculture, including fisheries, livestock and forestry 
(25%), and manufacturing (13%).  The agriculture sector, however, occupies about three quarters of 
the population, mostly engaged in subs istence farming on an informal basis.3  This explains the 
central role assigned to the agriculture sector in achieving the poverty-reduction objectives set out in 
the Action Plan for the Reduction of Absolute Pove rty (PARPA II), aimed at reducing the incidence 
                                                      
3 A study on workers engaged in the informal sector conducted in 2004 by the Instituto Nacional de 
Estatística  (INE) found that the labour force consisted of about 10.2 million people of which 1.7 million were 
not employed, 802,000 were formally employed, and 7. 7 million were engaged in informal activities.  With 
respect to the latter, 90% were engaged in agricultural activities (INE, 2006). WT/TPR/S/209/Rev.1 Trade Policy Review 
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of poverty from 54% of the population in 2003 to 45% in 2009.4  Megaprojects (i.e. investment in 
excess of US$500 million over project life), includi ng those established under the Industrial Free 
Zone (IFZ) regime, have made a substantial contribution to GDP and export growth since 
Mozambique's first Trade Policy Review in 2001 (Chapter III(3)(vi)).5  Mozambique has considerable 
mining resources, which are not yet fully exploited;  as a result, the contribution of the sector to GDP 
remained low, at 1.3% in 2007, and is estimated to  remain at the same level in 2008, albeit an increase 
from 0.5% in 2001 (Table I.1).  New megaprojects in  mining, where production is scheduled to start 
in the near future, include the Mozambique Titani um Mineral project (Moma), and a coal project 
(Moatize).  Persistent supply-side constraints incl ude inadequate access to credit, insufficient supply 
of water and electricity, transport and telecommuni cations services, a shortage of skilled labour, and 
an environment for doing business that is char acterized by high costs and poor governance. 
(2) RECENT ECONOMIC DEVELOPMENTS  
4. Since its first TPR in 2001, Mozambique has continued its economic reforms.  In 2007, 
Mozambique was upgraded from the IMF Poverty Reduction and Growth Facility (PRGF) and has 
since pursued a macroeconomic stabilization and stru ctural reform programme for the 2008-10 period, 
supported by a three-year Policy Support Instrument (PSI).6  The reforms are aimed at improving 
budgetary performance, improving the management  of Mozambique’s natural resources, and 
addressing supply-side constraints to reduce the costs of doing business (Chapter II(2)).  Other components of the structural reform programme include the restructuring of state-owned enterprises, such as PETROMOC, which would reduce associated subsidies and improve efficiency of fuel 
supplies.  Overall, the various reforms are exp ected to improve the business environment and create 
favourable conditions for private investment. 
5. These reforms have sustained Mozambique’s eco nomic growth, which has remained strong 
since its first TPR, with an annual average growth rate of 8.7% during 2001-07 (Table I.1).  Economic 
growth has been driven mainly by megaprojects in, inter alia , construction, electricity, and aluminium 
manufacturing and mining, with solid growth in restaurants and hotels, as well as transport and 
telecommunication services;  average annual growth  of the agriculture sector has been below the 
national average, and was disrupted by floods in 20 02 (and more recently in 2008).  Demand has been 
sustained by increased public sector spending (large ly financed by substantial inflows of aid), 
megaproject-driven investment, and rising exports;  growth of private consumption was weaker. 
6. Public spending reached approximately 29% of GDP in 2007 (down from 32.1% in 2001), of 
which slightly less than half was on public invest ment.  Total fiscal revenue amounted to 16.4% of 
GDP (from 12.4% in 2001);  grants were estimated  at 9.6% of GDP (Table I.1).  A group of 
19 foreign aid donors comprise Mozambique’s Program Aid Partners (PAPs), contributing directly to 
finance a substantial share of the State’s budget.
7  The authorities have improved the budgetary 
expenditure management process since 2001, and th e tax administration and collection system, by 
implementing the SISTAFE programme (Chapter II(2)).  On the revenue side, reliance on trade taxes 
has been reduced by the lowering of tariff rates in  2002, nevertheless, these remain important.   
Revised personal income tax, corporate income  and VAT regimes were adopted in 2007 for 
                                                      
4 IMF (2007b). 
5 The three most important megaprojects are:  Mozal, which produces aluminium billets from imported 
alumina, using electricity generated by the Cahora Bassa hydroelectric plant, itself a megaproject;  and the 
Southern Africa Gas project, a pipeline financed by SASOL of South Africa. 
6 IMF (2008b). 
7 The PAPs concluded their joint annual review of performance on 30 April 2008.  Mozambique News 
Agency, AIM report, No. 358 , 9 May 2008.  Viewed at: http://www.poptel.org.uk/mozambique-news/ 
newsletter/aim358.html#story9 [25 September 2008]. Mozambique WT/TPR/S/209/Rev.1 
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application in 2008, and a new excise tax regime was to be adopted in 2008.  In 2002, the incentives 
made available to investors were harmonized and co nsolidated into a single Code of Fiscal Benefits, 
and incentives for mining and petroleum investment  projects have been regulated separately since 
2007 (Chapter II(4)).  In addition, the new Go vernment Procurement Code provides a legal 
framework which, in principle, favours competitive bidding and should contribu te to the improved use 
of public resources (Chapter III(4)(iv)). 
7. Monetary policy and the issuance of the nationa l currency have been managed by the Central 
Bank, the  Bank of Mozambique (Banco de Moçambique , BoM), since its establishment in 1992.8  
Since 1 July 2006, the currency has been the "N ew Family" Metical, following the currency reform.9  
In 2007, the BoM set out its monetary policy with  "price stability" as the central objective, aiming for 
an annual inflation rate of 6-6.5%;  it sets rese rve money as the operational target, and the broad 
monetary aggregate (M3) as the intermediate target.10  Established in June 2007, the BoM’s Monetary 
Policy Committee (MPC) meets monthly and issues a press release on its deliberations to ensure greater transparency.  The instruments of monetary  policy used by the BoM are the standing lending 
facility and standing deposit facility (at 14.5% and 10 .25% respectively since th e last adjustment in 
January 2008), and the compulsory reserve require ment (9% for overall deposits since April 2008), in 
the context of an on-going assessment of economic growth and price developments.  The BoM also 
manages liquidity by intervening in the market for treasury bills, as well as in the interbank foreign 
exchange market. 
8. Price developments are officially monitored on the basis of the Consumer Price Index (CPI) 
for the capital city of Maputo.  During the review  period, exogenous shocks, such as the increases in 
petroleum and cereal prices have contributed to dom estic inflationary pressures.  The CPI for Maputo 
recorded an annual rate of increase of 8.2% in  2007, down from 13.2% in 2006.  The BoM will 
continue to target base money to reach its inflation target in 2008.  The real effective exchange rate 
has fluctuated over the period (Table I.1). 
9. Mozambique’s foreign exchange regime c ontinues to be governed by a 1996 law
11, which 
applies to all persons located with in the Mozambican territory.  Acco rding to the Regulations in force 
in 200812, all foreign exchange operations are subject to  registration and authorization by the BoM, 
and residents are allowed to hold foreign currency accounts abroad or in Mozambique.  All operations 
regarding the import or export of goods and services are domiciled w ith a bank.  Repatriation of net 
profits and dividends is subject to authorization, an d application must be made for this purpose;  a 
simplified procedure applies to megaprojects.13  Mozambique’s Parliament is considering a new 
foreign exchange law submitted in September 2007, and following its adoption and the issuance of its 
regulations, Mozambique intends to accept Article VIII of the IMF Agreements.14 
                                                      
8 Banco de Moçambique online information.  Viewed at:  http://www.bancomoc.mz. 
9 Law No. 7/2005 of 20 December 2005.  The law established a conversion rate of 1,000 units for the 
metical, so that Mt 1,000 in circulation in 2005 was converted to Mt 1.00 of the New Family.  See Banco de 
Moçambique (undated b). 
10 Banco de Moçambique (undated a). 
11 Law No. 3/96 of 4 January 1996.  See BIS (1999). 
12 Notice No. 5/GGBM/96 of 19 July 1996.  These regulations were last revised in 2006 to enter into 
effect on 1 January 2007, but accord ing to information provided by th e authorities, these revisions were 
suspended. 
13 The BoM’s Regulations on the Imports and Exports of Goods and Services were last revised in 2006 
to enter into effect on 1 January 2 007, but according to information provide d by the authorities, these revisions 
were suspended. 
14 IMF (2008), Appendix I. WT/TPR/S/209/Rev.1 Trade Policy Review 
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10. Since its first TPR in 2001, Mozambique has greatly reduced the level of its external 
indebtedness, as a result of debt relief.  In September 2001, Mozambique reached the completion 
point under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative, with total debt relief 
worth US$4.3 billion.15  In 2005, Mozambique was granted 100% multilateral debt relief by the 
IMF16, and was pursuing debt rescheduling agreements w ith bilateral creditors in 2008.  As a result, 
its external debt (net present value) as a percenta ge of exports of goods and services decreased from 
109.8% in 2001 to 55% in 2007, and the debt service ratio declined from 6.9% to 5.4% (Table I.1). 
(3) TRADE AND INVESTMENT  
(i) Trade in goods and services 
11. Mozambique’s ratio of trade in goods and servi ces to nominal GDP increased to 64.4% in 
2007, compared with 54.1% in 2001, as a result of  the expansion of bot h exports and imports 
(Table I.1).  Exports of goods amounted to US$2, 412.1 million in 2007 (Table I.2), while imports of 
goods were US$2,811.1 million, up by a factor of 2. 7 since 2001.  Megaprojects accounted for 70% of 
exports of goods and 24% of impor ts of goods in 2006;  net exports by megaprojects amounted to 
US$1 billion in 2006, up from US$210 million in 2001.17  Mozambique is a net importer of services, 
including in the sub-categories of transportation, tr avel, and construction services (Chapter IV(5)(ii)).  
Net aid inflows more than doubled during the review  period.  Overall, the external current account 
remained in deficit throughout the period accounting for 9.8% GDP in 2007. 
Table I.2 
Balance of payments, 2001-07 
(US$ million) 
 2001 2002 2003 2004 2005 2006 2007 
Current account -657.2 -869.2 -816.5 -607.4 -760.7 -773.2 -795.0 
   Trade account -271.3 -666.6 -604.2 -345.8 -497.1 -267.7 -399.0 
      Exports (f.o.b.) 726.0 809.8 1,043.9 1,503.9 1,745.3 2,381.1 2,412.1 
      Imports (f.o.b.) -997.3 -1,476.5 -1,648.1 -1,849.7 -2,242.3 -2,648.8 -2,811.1 
   Services (net) -368.7 -237.6 -270.0 -275.8 -306.7 -371.7 -396.9 
      Credit 249.7 339.4 303.9 255.6 341.9 386.4 458.7 
         Travel 63.6 62.9 97.6 95.3 129.6 139.7 163.4 
         Transportation 55.7 101.7 90.5 80.0 89.3 105.0 128.6 
         Other 130.4 174.8 115.8 80.3 122.9 141.7 166.8 
      Debit -618.4 -577.0 -573.9 -531.4 -648.6 -758.1 -855.6 
         Travel -114.3 -113.0 -139.8 -134.2 -176.1 -179.5 -180.0 
         Transportation -157.8 -179.5 -190.5 -190.7 -229.9 -273.1 -294.7 
         Other -346.2 -284.5 -243.6 -206.5 -242.6 -305.5 -380.8 
   Income (net) -234.7 -603.2 -165.5 -299.5 -359.9 -634.5 -591.6 
      Credit 56.0 52.2 55.9 74.5 98.9 159.8 193.6 
      Debit -290.7 -655.3 -221.4 -374.0 -458.8 -794.3 -785.2 
   Transfer (net) 217.5 638.3 223.1 313.8 403.0 500.7 592.4 
      Credit 254.6 827.0 293.2 370.5 479.0 574.5 657.8 
         Workers' remittances 41.0 29.0 29.9 2.5 5.8 15.8 30.9 
      Debit -37.1 -188.7 -70.0 -56.7 -76.0 -73.8 -65.4 
         Workers' remittances -32.2 -16.3 -20.5 -11.3 -10.8 -12.3 -25.9 
Table I.1 (cont'd)  
                                                      
15 IMF (2001). 
16 IMF Press Release No. 05/298, "IMF to Extend 100 Percent Debt Relief to Mozambique Under the 
Multilateral Debt Relief Initiative".  Viewed at: h ttp://www.imf.org/external/np/sec/pr/2005/pr05286.htm 
[22 July 2008]. 
17 IMF (2008b);  IMF (2005);  and IMF (2007d).  Mozambique WT/TPR/S/209/Rev.1 
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 2001 2002 2003 2004 2005 2006 2007 
Capital and financial account 232.0 -509.7 643.6 531.6 283.1 -1,167.2 771.5 
   Capital account (net) 256.8 222.1 270.7 578.1 187.9 334.5 415.1 
      Credit 256.8 222.5 271.2 581.2 191.8 336.8 416.1 
      Debit 0.0 -0.4 -0.5 -3.1 -3.9 -2.3 -1.0 
   Financial account (net) -24.8 -731.7 372.8 -46.5 95.2 -1,501.7 356.4 
    Direct investment abroad 0.0 0.0 0.0 0.0 0.0 -0.4 0.3 
    Direct investment in Mozambique, n.i.e. 255.4 347.6 336.7 244.7 107.9 153.7 427.4 
    Portfolio investment assets 0.0 32.2 5.0 -25.4 -88.8 -124.2 -117.5 
    Portfolio investment liabilities. , n.i.e. 0.0 0.0 0. 0 0.0 0.3 0.4 0.3 
    Other investment assets -33. 8 -207.7 -77.1 -88.7 -78.5 -13.8 -375.3 
    Other investment liabilities., n.i.e.  -246.4 -903.8 108.2 -177.1 154.3 -1,517.5 421.2 
Net errors and omissions -59.6 -60.0 208.2 216.4 281.0 141.7 79.6 
Overall balance -484.9 -1,438.8 35.3 140.7 -196.6 -1,798.8 56.1 
Reserves and related items 484.9 1,438.8 -35.3 -140.7 196.6 1,642.6 -56.1 
Indicator (%)        
   Trade account/GDP -6.7 -15.9 -12.9 -6.1 -7.6 -3.7 -4.9 
   Current account/GDP -16.1 -20.7 -17.5 -10.7 -11.6 -10.7 -9.8 
   Overall balance/GDP -11.9 -34.2 0.8 2.5 -3.0 -24.9 0.7 
Source:  IMF International Financial Statistics CD-ROM, and IMF, BOP CD-ROM;  and Government of Mozambique 
(2007), Boletim Annual da Balança de Pagamentos , Ano 4, No. 04, p. 43. 
12. Mozambique’s structure of exports has not ch anged significantly since 2001 (Table AI.1);  
aluminium and aluminium alloys (processed from al umina imported from Australia) continue to be 
Mozambique's main exports as a result of the expa nsion of the smeltering cap acity of the megaproject 
Mozal (Chart I.1).  The EC is the principal export market for Mozambique’s aluminium (Chart I.2 and 
Table AI.2), where it benefits from preferential a ccess.  Other important export categories include 
fuels (electricity and natural gas), making South A frica a leading export destination in Africa.  Raw 
and processed sugar exports are also significant.  Furt her diversification of exports is anticipated from 
the exploitation of Mozambique’s mineral sands and coal resources.  Mozambique’s structure of 
imports has remained largely unchanged (Table AI.3), as it continues to import all of its oil 
requirements (10% of imports in 2007), as well as food, medicines and other consumer goods, 
cement, machinery, and equipment.  In 2007,  South Africa and Australia were Mozambique’s 
principal import sources (Table AI.4).  
 WT/TPR/S/209/Rev.1 Trade Policy Review 
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0%20%40%60%80%100%
2001 2002 2003 2004 2005 2006 2007
0%10%20%30%40%50%60%70%80%90%100%
2001 2002 2003 2004 2005 2006 2007Chart I.1
Structure of merchandise trade, 2001-07
(a) Exports
(b) Imports
Source: WTO Secretariat calculations, based on UNSD, Comtrade database (SITC Rev.3), mirror statistics.Aluminium and aluminium alloysTobacco Fuels
Other food OtherWood, non-coniferous
Electrical machines Iron and steelRice, milled Chemicals
Textiles and clothing Other food
OtherOther semi-manufactures
Fuel Non-electrical machinesTransport equipment
 Mozambique WT/TPR/S/209/Rev.1 
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%2001200220032004200520062007Chart I.2
Direction of merchandise trade, 2001-07
0% 20% 40% 60% 80% 100%2001200220032004200520062007(a) Exports
(b) Imports
Source: WTO Secretariat calculations, based on UNSD, Comtrade database (SITC Rev.3), mirror statistics.South AfricaGermany ChinaOther EC(25) Italy
Belgium South AfricaUnited Kingdom Other Africa
United States China
Japan Other AmericaAustralia EC(25)
OtherOtherOther Asia
 WT/TPR/S/209/Rev.1 Trade Policy Review 
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(ii) Foreign direct investment 
13. FDI trends have followed mainly the course of megaproject commitments.  Both the absolute 
and relative (to GDP) levels of FD I rose sharply in 2002 and 2003, coinciding with the expansion of the 
Mozal aluminium plant and the construction of the SASOL gas pipeline (Tables I.2 and I.3).  Actual 
inflows amounted to US$427.4 million in 2007, altho ugh approved FDI was substa ntially larger because 
of the pledged commitments to develop Mozambiqu e’s coal and titanium sa nds resources in 2007. 
Table I.3 
Foreign direct investment, 2003-07 
(US$ million) 
 2003 2004 2005 2006 2007 Totals Share of totals 
Actual FDI 336.7 244.7 107.9 153.7 427.4 1,270.4  
Approved projects 120.0 113.2 164.6 163.4 5,696.3 6,257.5 100.0% 
  Agriculture and agri-industry 26.1 19.0 41.4 20.8 85.9 193.2 3.1% 
  Fisheries and aquaculture 1.1 8.6 0.6 8.2 9.8 28.2 0.5% 
  Banking and insurance 0.1 - 1.9 2.4 1.1 5.5 0.1% 
  Construction 3.6 1.6 4.0 3.4 11.5 24.1 0.4% 
  Industry 8.9 15.1 16.5 17.4 192.8 250.7 4.0% 
  Mining 4.2 1.6 3.8 7.4 5,177.3 5,194.4 83.0% 
  Transport and communications 60.5 12.2 4.9 7.7 25.6 111.0 1.8% 
  Tourism 11.1 50.7 84.0 76.6 138.7 361.1 5.8% 
  Other 4.3 4.3 7.5 19.4 53.7 89.3 1.4% 
Source:  Mozambican authorities. 
 
(4) OUTLOOK18 
14. Mozambique remains committed to pursuing prudent  fiscal and monetary policies.  Therefore, 
its macroeconomic conditions are expected to rema in stable.  The medium-term economic outlook for 
Mozambique, for 2009-11 remains positive, barring natural disasters such as floods, droughts or 
cyclones.  Real GDP growth of 7% is expected for 2009 and 2010, followed by a deceleration to 6.4% in 2011.  Inflation is to slow, though less than previ ously envisaged due to fuel and food price shocks.  
Counting on a continued and sustained increase in fo reign aid inflows, public investment should 
remain high, representing 16%, 15%, and 14% of GDP in  2009, 2010, and 2011 respectively.  Exports 
(in U.S. dollars) are expected to continue to incr ease, but at more moderate rates than over 2001-06, 
rising by just 15% over 2007-11, while imports are for ecast to rise by 28%, widening the trade deficit.  
Megaprojects are expected to continue to make a positive annual average contribution to net exports, 
of about US$1.1 billion for 2007-11. 
15. Prospects for continued economic growth a nd for consolidating macroeconomic stability, 
while reducing poverty, depend largely on the continuati on of the reform process.  This is to focus on 
public sector reform, improving the business environmen t to enhance private-sector development, and 
ensuring that natural resources are managed transparen tly.  An important aspect of the reforms is the 
development of human capital.  Hence, health  and education provided to a wider group of 
beneficiaries, through a more efficient system, a nd infrastructure are expected to consume over 65% 
of expenditure.  The authorities anticipate continue d substantial FDI flows to  megaprojects in the 
mining sector;  this will improve management of na tural resources and increase the net contribution of 
megaprojects to the national economy, a central government objective.  The Ministry of Finance is closely examining the fiscal incentives to be granted prior to project approval, and the new incentives 
scheme for mining and petroleum projects will be strictly implemented.  
                                                     
 
18 IMF (2008b).