Chapo Admits that Economic Growth is not Benefitting the Majority of Mozambicans

By MOZTIMES

Maputo (MOZTIMES) - President Daniel Chapo recognised on Wednesday that decades of economic growth and of major investments have not been expressed in prosperity for most Mozambicans.

This was one of the clearest official admissions of the weaknesses of the country’s current development.

Speaking in Maputo at the opening of an International Conference on Inclusive and Sustainable Development, Chapo said that, despite the advances made since Agenda 2025, Mozambique still faces persistent poverty, inequalities, low productivity and difficulties in creating jobs.

“The truth is that we are growing, but we still need to transform this growth into productivity and prosperity for the Mozambican people”, declared the President.

Chapo’s statement is an explicit recognition of a reality, often stated by economists, namely that although Mozambique has made important discoveries of natural resources, and has received billions of dollars in investment, and although there have been periods of accelerated economic growth in the last two decades, these gains have had a limited impact on the living standards of the majority of the population.

Chapo identified what he regards as one of the greatest challenges facing his government.

“One of the greatest tasks of this new cycle of governance is precisely to reduce economic duality – that is to reduce the distance between the modern extractive economy, driven by large scale investments, and the domestic economy, which is still not very productive, and is where most Mozambicans live and work.

He was speaking at a time when the country is preparing to begin large scale projects to export liquefied natural gas, and attempt to transform this potential into more inclusive economic development.

According to Chapo, the benefits of large projects should be extended to commercial agriculture, to national industry, to tourism and to small and medium enterprises.

“Our challenge is to ensure that the dynamism of the large projects also drives commercial agriculture, national industry, tourism, small and medium enterprises and job creation throughout the country”, he said.

Despite the progress made in the past 25 years – including the expansion of the school network, of infrastructures, of access to electricity and to communications – the President admitted that structural problems persist.

“There are still levels of poverty, territorial and social inequalities, limitations of the productivity of our economy, as well as difficulties in industrialisation, and in the generation of income and of decent work for our people, especially for youth and for women”, said the President.

Faced with this diagnosis, Chapo announced a package of economic reforms which include new laws for the extractive sector, legislation on local content, the creation of a Development Bank, improvements in the business environment, digitalisation of public services, the fight against corruption and reforms in the public administration.

“The challenge of our generation is to transform natural wealth into national wealth and economic growth into inclusive and sustainable development”, the President said.

These declarations are part of the preparation of Agenda 2050, a strategic document which should guide the development of the country for the next 25 years.

However, the greatest challenge may not be defining a new vision for the future, but to implement a promise repeated over successive cycles of national planning: to ensure that economic growth finally ceases to be measured only by macro-economic indicators, and comes to be reflected in income, in employment and in the standard of living of Mozambicans. This is precisely what the President recognised that the country has not yet managed to achieve. (MT)

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