The Remarkable Rise of Mozambique

The capital city of Maputo.
The bustling capital city of Maputo is a center of commerce and tourism. Source: nomoadtours.co.za

Since the 1990s, Africa has emerged as a region defined by rapid political and economic transformation. By establishing accountable, democratic governments and instituting new economic policies with limited barriers to trade and foreign investment, many of these emerging African nations are showing signs of profound growth and improvement in their standard of living. These developments in nations such as Mozambique reveal the potential for many states in the region to overcome the extreme poverty, authoritarianism, and intense economic exploitation that has undermined several African countries in the post-colonial period.

In 1962, Frente de Libertação de Moçambique, or Frelimo, a militant anti-colonial group, emerged in opposition to the colonial Portuguese government that had governed Mozambique for over four centuries. While other European countries had relinquished control of their colonies following World War II, Portugal remained dominant in this African state. After over a decade of sporadic warfare between the colonial government and Frelimo, Mozambique finally achieved independence in 1975 as the result of a successful coup d’etat in Portugal, which instigated the Carnation Revolution. This revolution was characterized by a general distaste for the colonialism that had bankrupted Portugal in its attempts to suppress the emergence of intense nationalism in Africa. One of the immediate results of the revolution was the dissolution of Portuguese colonial holdings, including Mozambique.

Immediately after Frelimo formed a new Mozambican government, over 200,000 Portuguese nationals fled the country, instigating an economic crisis as they held much of the country’s financial capital. Facing a brutal recession and a largely unskilled population of laborers, the young nation sought foreign aid to stimulate economic growth. As a result, Frelimo adopted Marxist political and economic principles to secure foreign capital from the Soviet Union, rejecting the United States as a potential investor. Given historical circumstances, it is clear why Frelimo aligned itself with the Soviet Union: the Mozambican government had already nationalized the factories and farms abandoned by Portuguese nationals, and the Soviet Union had demonstrated its willingness to invest in socialist, post-colonial African nations, and the Portuguese, whom Frelimo despised, supported western powers during the Cold War.

Yet just two years after independence had been declared, an anti-communist group, Resistência Nacional Moçambicana, or Renamo, emerged and contested the communist policies that dominated the new regime. Initially, Frelimo eliminated any legitimate political opposition by establishing a one-party communist state with restricted membership, but Renamo resisted those stringent measures and led an armed uprising to occupy territory throughout Mozambique. The resulting political divide instigated a destructive civil war in 1977. Additionally, Mozambique’s  adoption of socialist principles prompted the United States to halt its developmental aid to the country, while other western nations and their respective African colonies followed suit and imposed sanctions on the new government as well. Collectively, the war and these harsh economic restrictions triggered severe economic stagnation.

However, following the death of President Samora Machel in 1986, Joaquim Chissano, a more moderate member of Frelimo who had previously served as foreign minister, rose to power. Though Chissano retained a socialist doctrine for several years, he focused on improving relations with western nations such as the United States. Additionally, Chissano opted to schedule multi-party, democratic Presidential and Parliamentary elections in order to appease Renamo and end the ongoing civil war. He fulfilled his promise to hold multi-party elections in 1994 and carried 53.3% of the popular vote in the Presidential election. He even voluntarily resigned after serving two terms as president. As a result of these democratic reforms, many western powers lifted the economic sanctions and limits on developmental aid that existed during Mozambique’s socialist period.

Though GDP growth does not directly correspond to economic well being, Mozambique boasts some of the highest continual growth rates in the world, which have held steady between 6% to 9% for the past ten years. In comparison, from 1981 to 1992, Mozambique averaged a mere .2% GDP growth per year under the country’s socialist regime. As a result of the new democracy’s divergence from socialism, Mozambique has liberalized its economic policy, placing a stronger emphasis on international trade. In particular, trade between the United States and Mozambique has increased drastically in the past two decades: in 1994, the two nations volume of trade only amounted to $54.8 million, compared to $451.5 million in 2014, representing an 824% increase.

One of the best indicators of a population’s welfare is the United Nations’ Human Development Index (HDI), which is strongly tied to the standard of living in a country. The UN incorporates several key factors into its measurement, including life expectancy, education, and income levels, in order to determine how well a country is developing.

A cargo ship from Dubai docks in the port of Maputo, the capital of Mozambique, an indicator of the emergence of foreign trade that has brought considerable growth to the Mozambican economy. (Source: Rob Baker)
A cargo ship from Dubai docks in the port of Maputo, the capital of Mozambique, an indicator of the emergence of foreign trade that has brought considerable growth to the Mozambican economy. Source: Rob Baker

In 1985, at the height of socialist economic policies in Mozambique, the country’s HDI was an abysmal .205. For perspective, there is not a single country with such a low HDI today. Though Mozambique’s HDI was measured at .393 in 2013, albeit low in contrast to much of the world, this reflects an impressive 91.7% increase in just under thirty years. In comparison, the Democratic Republic of the Congo’s current HDI index stands at .304, up from just .294 in 1985.

Many of the improvements in standard of living and overall economic growth can be attributed to foreign aid, which has come in two main forms: official development assistance given directly to the Mozambican government, and private investment into various sectors of the  private economy. Mozambique receives $2 billion in aid per year, mostly from the West, and the majority of this money is used to address poverty. Moreover, this aid is contingent on the continuation of democratic governance in Mozambique. For example, in 2009, a dispute over the legitimacy of a Presidential election led donors to threaten to cut off aid, and ultimately, the government responded by passing legislation to accommodate these concerns. Thus, foreign aid reinforces democratic governance in Mozambique while simultaneously aiding the government in alleviating poverty. Though Mozambique remains largely impoverished, these measures helped facilitate an impressive reduction in poverty from nearly 70% to 54% from 1996 to 2008.

Although the agricultural sector still dominates much of the economy,  the discovery of valuable natural resources—from minerals to natural gas—has led to private foreign investment in the economy, and has strengthened these particular sectors immensely. These discoveries have the potential to be extraordinarily beneficial to Mozambique, as long as it does not become wholly reliant on its natural resources for growth (i.e. the infamous resource course). This is a key concern for Mozambique moving forward. For example, despite the Democratic Republic of the Congo’s (DRC)  expansive oil and mineral deposits, constant civil conflict coupled with high levels of corruption have limited HDI improvement. However, democratic governance and continued stability within the Mozambican government, comparatively nonexistent in the DRC, will potentially enable Mozambique to avoid the resource curse, provided the government effectively distributes the profits gained through resource extraction.

After just twenty years of democratic governance, Mozambique has shown hopeful signs of improvement in both its standards of living and economic growth. A key component of these successes has been substantial foreign aid and investment from developed nations, which have placed conditions on this aid  to ensure governmental accountability and transparency. However, it is also Mozambique’s political stability that has facilitated the expansion of this aid; foreign investors are far more likely to invest in a state where law and order exists and contractual obligations are fulfilled. Furthermore, the growth of the energy sector of the economy along with continued democratization indicates that the resource curse may not manifest itself in Mozambique. It is however crucial to recognize the circumstances from which Mozambique has risen as a nation. Though the state remains largely undeveloped and a large percentage of the population does indeed face poverty, one cannot ignore the impressive developments taking place within its borders. However, Mozambique is not alone: the past several decades have been defined by a massive wave of democratic governance throughout much of Sub-Saharan Africa, and the region’s economic development and improvements in the standard of living of its inhabitants indicate that sustained progress is underway.