Mozambique’s industrialization

Abstract

Typescript prepared by Lisa Winkler at UNU-WIDER. UNU-WIDER gratefully acknowledges the financial contributions to the research programme from the governments of Denmark, Finland, Sweden, and the United Kingdom. The World Institute for Development Economics Research (WIDER) was established by the United Nations University (UNU) as its first research and training centre and started work in Helsinki, Finland in 1985. The Institute undertakes applied research and policy analysis on structural changes affecting the developing and transitional economies, provides a forum for the advocacy of policies leading to robust, equitable and environmentally sustainable growth, and promotes capacity strengthening and training in the field of economic, and social policy-making. Work is carried out by staff researchers and visiting scholars in Helsinki and through networks of collaborating scholars and institutions around the world.

Economic development and institutions in Mozambique: Factors affecting public financial management

“…Simultaneously, a civil war broke out with the Mozambican National Resistance (MNR), which later took the designation Renamo. As a result of these armed conflicts and the poor performance of the economy from 1981 onwards, including the international oil crisis in 1979-80, the economy entered a period of recession until 1986 (Cruz et al 2014;Sulemane 2002; Figure 1). Prices were highly distorted; the official exchange rate was 40 meticais to US$1, but 1,500 meticais to US$1 in the parallel market (World Bank 1989).…”

“…The privatization programme was ambitious and coincided with the increase in the share of manufacturing value added in total GDP between 1995 and 1999 (Cruz et al 2014). However, parts of industries collapsed during the privatization process, as was the case for the cashew-nut industry (McMillan et al 2002).…”

“…However, parts of industries collapsed during the privatization process, as was the case for the cashew-nut industry (McMillan et al 2002). A few authors have written about the privatization challenges in Mozambique (Castel-Branco et al 2001;Cruz et al 2014;Pitcher 1996). The state reduced the public cost of managing non-profitable enterprises in the 1990s, but the lack of a consistent industrial policy led to deindustrialization of the economy, and even prevented re-industrialization.…”