In this report by the CDD (Centro Para Democracia e Desenvolvimento), presents the evolution of Mozambique’s economic structure, showing how agriculture gradually lost importance to the growing extractive industry which in turn did not allow for strengthening of other sectors of the country economy. Mozambique is in fact moving towards an extractivist economy model. Below are some key findings and recommendations from the report.

Key findings

• Abundance of resources in a country does not automatically lead to economic development and improvement in the living conditions for the population.
• The Mozambican government aims to achieve inclusive growth and development through structural transformation based on diversification of production and import substitution as stipulated in the National Development Strategy 2015-2035.  
• From 2010 and 2018, the extractive industry absorbed on average 70% of the Foreign Direct Investment inflows.  
• The natural resource boom in Mozambique has not significantly contributed to economic growth, led to economic diversification, strengthened other sectors or contributed to poverty reduction. 
• More than 50% of the population lives in extreme poverty and with considerably high levels of food insecurity and malnutrition, with the central and northern regions being the most affected.

Strategies to use natural gas for national development 

• Use of gas for the generation of electricity. 
• Production of fuel and related products to substitute those that are imported.
• Promotion of manufacturing and services to generate economic opportunities along Liquid Natural Gas value chains under local content policies.
• Production of fertilizers in large quantities and at low cost to promote greater productivity in agriculture.