Recession pushes 63.7% of the Mozambique population below poverty line – Report

MAPUTO, Mozambique

The African Development Bank (AfDB) estimates that the contraction of Mozambique’s economy last year took an additional 850,000 people below the poverty line, now at 63.7% of the population.

“The economic contraction was expected to drag 850,000 people below the international poverty line in 2020, an increase of 1.2 percentage points to 63.7% of the population, according to the World Bank, while GDP per capita was expected to contract by –3.4% in 2020.,” a report by the AfDB reads.

It further predicts economic growth of 2.3% this year and 4.5% in 2022, insufficient to compensate for a 3.4% drop in gross domestic product (GDP) per capital last year.

According to the report ‘African Economic Outlook 2021’, themed ‘From Debt Resolution to Growth: The Road Ahead for Africa‘, Mozambique’s “growth prospects are more positive for the medium-term, with GDP expected to grow by 2.3% in 2021 and 4.5% in 2022, when it will surpass the pre-pandemic level on the back of gas investments.”.

“The onset of the COVID–19 pandemic caused a sudden stop to Mozambique’s good economic performance. Real GDP contracted by an estimated 0.5% in 2020, the first decline in 28 years, after growing 2.2% in 2019. A slowdown in construction, tourism, and transport, and a decrease in demand for commodities exports were the main drivers of the deceleration. Economic activity was also hurt by the escalating conflict in the northern province of Cabo Delgado, which has displaced more than 250,000 people and resulted in more than a thousand deaths,” reads the AfDB’s African Economic Outlook 2021 .

In the report, the AfDB estimates growth for the continent of 3.2% this year, after last year’s 2.1% recession resulting from the Covid-19 pandemic.

“Africa is projected to recover in 2021 from its worst economic recession in half a century” due to the pandemic,”projected to grow by 3.4 percent in 2021, after contracting by 2.1 percent in 2020″, the report reads.

The document emphasises that, although the economic impact of the pandemic was differentiated according to region, “the anticipated recovery is generic”.

-      You may read the full AfDB’s African Economic Outlook 2021 – From Debt Resolution to Growth: The Road Ahead for Africa  HERE