Like many countries in Africa, the country of Mozambique was a European colony before achieving independence from Portugal in the late 20th century. The country is situated on the east side of Africa (directly to the west over the Indian Ocean from Madagascar), and it borders Tanzania, Malawi, and Zambia to the north and west; Zimbabwe to the west; and South Africa and Swaziland to the south.
Poverty has been a major challenge for Mozambique since independence in 1975, when the country was listed as one of the world’s poorest. Even today the country ranks among the lowest in human development, life expectancy, and inequality, ranking 165 out of 169 on the Human Development Index. Dramatic improvements have been achieved in Mozambique’s economy in the last thirty years, but 40% of Mozambique’s 2012 budget came from foreign assistance. The year 2012 also saw over half of Mozambique’s population under the poverty line. Even though the country has rich farmland in its northern regions and vast, untapped sources of coal and natural gas, Mozambique is suffering for a number of reasons.
4 Leading Causes of Poverty in Mozambique
1. Civil war aftermath. The major obstacle to development in Mozambique after independence was the Mozambican Civil War, which lasted from 1977 to 1992. The first Mozambican government was founded on Marxist principles and received support from the Soviet Union and its allies. Within two years a civil war broke out, one often seen as a “proxy war” that coincided with the ongoing global Cold War between the United States and the USSR. For twenty years the pro- and anti-communist groups (FRELIMO and RENAMO, respectively) fought a bloody war that killed almost a million people and displaced five million civilians before peace was achieved in 1992. This war stunted Mozambique’s development past subsistence agriculture and halted regional economic activity that could have made the country prosperous.
2. External debt. By 1998, six years after the Mozambican Civil War ceased, foreign debt was over $5 billion. In 1999, the government paid four times more to creditors than they spent on health and education. Even though Mozambique was the first African country to receive debt relief from the International Monetary Fund and the World Bank through the Heavily Indebted Poor Country (HIPC) Initiative, Mozambique still has billions of dollars in external debt. Restructuring and forgiveness of these debts has alleviated some of the pressure, allowing Mozambique to go from $8 billion in 1998 external debt, to $4 billion in 2010, but external debt stocks measured 43.8% of gross national income that same year. External debt service payments take away much-needed funds from infrastructure and health care projects, retarding education and quality of life development.
3. Workforce dependence on agriculture. Because only twenty years have passed since the fighting in Mozambique ended, sectors other than agriculture have taken a while to catch up. Subsistence agriculture remains the largest sector by work force, but productivity is considerably poor, and less than 7% of Mozambique’s land is arable. The future of Mozambique’s economy has long been said to be in the hands of foreign investors who can tap into Mozambique’s vast natural resources of coal and natural gas, but these foreign investors often cause more problems than they claim to help solve.
4. Lack of quality health and social service access. According to the CIA Factbook, the degree of risk for major infectious diseases such as malaria and tuberculosis is very high in Mozambique. Lack of improved water sources is a major issue for both urban and rural populations, with less than half of the population with access to running water. More than half of Mozambicans must walk more than an hour to reach the nearest health facility, according to the Global Health Initiative. Meanwhile, 15% of the population between 15-49 years of age are infected with HIV/AIDS. Only 8% of the government’s budget is allocated for health spending, and of that health budget 70% comes from external resources or donor support. Sexual health and education programs are also difficult to spearhead because of Mozambique’s literacy rate of 56%.
On the whole, Mozambique faces severe challenges, but its vast natural resources pose a great opportunity for responsible foreign investment — responsible being the key word. IRIN News asserts that “mega-projects” (foreign-financed projects that make investment more attractive) must be accompanied by smaller projects that individually address poverty in rural areas. But Andre Olivenca of How We Made It in Africa argues that many of the “mega-projects” serve as experience-building for domestic development: “Improving the country’s export capacity will lead to increased government revenues which can then be reinvested into other infrastructure sectors across the country,” Olivenca says. The potential is certainly there for Mozambique to capitalize on its many resources, but foreign assistance — both large- and small-scale — may be the key to ensuring this capital helps Mozambicans themselves.
– Naomi Doraisamy