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Malawi vs. Mozambique

Economy

MalawiMozambique
Economy - overview

Landlocked Malawi ranks among the world's least developed countries. The country's economic performance has historically been constrained by policy inconsistency, macroeconomic instability, poor infrastructure, rampant corruption, high population growth, and poor health and education outcomes that limit labor productivity. The economy is predominately agricultural with about 80% of the population living in rural areas. Agriculture accounts for about one-third of GDP and 80% of export revenues. The performance of the tobacco sector is key to short-term growth as tobacco accounts for more than half of exports, although Malawi is looking to diversify away from tobacco to other cash crops.

The economy depends on substantial inflows of economic assistance from the IMF, the World Bank, and individual donor nations. Donors halted direct budget support from 2013 to 2016 because of concerns about corruption and fiscal carelessness, but the World Bank resumed budget support in May 2017. In 2006, Malawi was approved for relief under the Heavily Indebted Poor Countries (HIPC) program but recent increases in domestic borrowing mean that debt servicing in 2016 exceeded the levels prior to HIPC debt relief.

Heavily dependent on rain-fed agriculture, with corn being the staple crop, Malawi's economy was hit hard by the El Nino-driven drought in 2015 and 2016, and now faces threat from the fall armyworm. The drought also slowed economic activity, led to two consecutive years of declining economic growth, and contributed to high inflation rates. Depressed food prices over 2017 led to a significant drop in inflation (from an average of 21.7% in 2016 to 12.3% in 2017), with a similar drop in interest rates.

At independence in 1975, Mozambique was one of the world's poorest countries. Socialist policies, economic mismanagement, and a brutal civil war from 1977 to 1992 further impoverished the country. In 1987, the government embarked on a series of macroeconomic reforms designed to stabilize the economy. These steps, combined with donor assistance and with political stability since the multi-party elections in 1994, propelled the country's GDP, in purchasing power parity terms, from $4 billion in 1993 to about $37 billion in 2017. Fiscal reforms, including the introduction of a value-added tax and reform of the customs service, have improved the government's revenue collection abilities. In spite of these gains, about half the population remains below the poverty line and subsistence agriculture continues to employ the vast majority of the country's work force.

Mozambique's once substantial foreign debt was reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives. However, in 2016, information surfaced revealing that the Mozambican Government was responsible for over $2 billion in government-backed loans secured between 2012-14 by state-owned defense and security companies without parliamentary approval or national budget inclusion; this prompted the IMF and international donors to halt direct budget support to the Government of Mozambique. An international audit was performed on Mozambique's debt in 2016-17, but debt restructuring and resumption of donor support have yet to occur.

Mozambique grew at an average annual rate of 6%-8% in the decade leading up to 2015, one of Africa's strongest performances, but the sizable external debt burden, donor withdrawal, elevated inflation, and currency depreciation contributed to slower growth in 2016-17.

Two major International consortiums, led by American companies ExxonMobil and Anadarko, are seeking approval to develop massive natural gas deposits off the coast of Cabo Delgado province, in what has the potential to become the largest infrastructure project in Africa. . The government predicts sales of liquefied natural gas from these projects could generate several billion dollars in revenues annually sometime after 2022.

GDP (purchasing power parity)$19.741 billion (2019 est.)

$18.914 billion (2018 est.)

$18.333 billion (2017 est.)

note: data are in 2017 dollars
$38.91 billion (2019 est.)

$38.042 billion (2018 est.)

$36.775 billion (2017 est.)

note: data are in 2017 dollars
GDP - real growth rate4% (2017 est.)

2.3% (2016 est.)

3% (2015 est.)
3.11% (2018 est.)

3.7% (2017 est.)

4.07% (2017 est.)
GDP - per capita (PPP)$1,060 (2019 est.)

$1,043 (2018 est.)

$1,038 (2017 est.)

note: data are in 2017 dollars
$1,281 (2019 est.)

$1,290 (2018 est.)

$1,284 (2017 est.)

note: data are in 2017 dollars
GDP - composition by sectoragriculture: 28.6% (2017 est.)

industry: 15.4% (2017 est.)

services: 56% (2017 est.)
agriculture: 23.9% (2017 est.)

industry: 19.3% (2017 est.)

services: 56.8% (2017 est.)
Population below poverty line51.5% (2016 est.)46.1% (2014 est.)
Household income or consumption by percentage sharelowest 10%: 2.2%

highest 10%: 37.5% (2010 est.)
lowest 10%: 1.9%

highest 10%: 36.7% (2008)
Inflation rate (consumer prices)9.3% (2019 est.)

12.4% (2018 est.)

11.7% (2017 est.)
2.7% (2019 est.)

3.9% (2018 est.)

15.4% (2017 est.)
Labor force7 million (2013 est.)12.9 million (2017 est.)
Labor force - by occupationagriculture: 76.9%

industry: 4.1%

services: 19% (2013 est.)
agriculture: 74.4%

industry: 3.9%

services: 21.7% (2015 est.)
Unemployment rate20.4% (2013 est.)24.5% (2017 est.)

25% (2016 est.)
Distribution of family income - Gini index44.7 (2016 est.)

39 (2004)
54 (2014 est.)

47.3 (2002)
Budgetrevenues: 1.356 billion (2017 est.)

expenditures: 1.567 billion (2017 est.)
revenues: 3.356 billion (2017 est.)

expenditures: 4.054 billion (2017 est.)
Industriestobacco, tea, sugar, sawmill products, cement, consumer goodsaluminum, petroleum products, chemicals (fertilizer, soap, paints), textiles, cement, glass, asbestos, tobacco, food, beverages
Industrial production growth rate1.2% (2017 est.)4.9% (2017 est.)
Agriculture - productssweet potatoes, cassava, sugar cane, maize, mangoes/guavas, potatoes, tomatoes, pigeon peas, bananas, plantainssugar cane, cassava, maize, milk, bananas, tomatoes, sweet potatoes, rice, sorghum, potatoes
Exports$10.718 billion (2019 est.)

$10.326 billion (2018 est.)

$9.658 billion (2017 est.)
$3.349 billion (2019 est.)

$3.874 billion (2018 est.)

$2.505 billion (2017 est.)
Exports - commoditiestobacco, tea, raw sugar, beans, soybean products, clothing and apparel (2019)coal, aluminum, natural gas, tobacco, electricity, gold, lumber (2019)
Exports - partnersBelgium 16%, United States 8%, Egypt 7%, South Africa 6%, Germany 6%, Kenya 5%, United Arab Emirates 5% (2019)South Africa 16%, India 13%, China 12%, Italy 7%, United Arab Emirates 5%, Germany 5% (2019)
Imports$12.818 billion (2019 est.)

$12.372 billion (2018 est.)

$11.631 billion (2017 est.)
$7.371 billion (2019 est.)

$7.614 billion (2018 est.)

$5.076 billion (2017 est.)
Imports - commoditiespostage stamps, refined petroleum, packaged medicines, fertilizers, office machinery/parts (2019)refined petroleum, chromium, iron, bauxite, electricity (2019)
Imports - partnersSouth Africa 17%, China 16%, United Arab Emirates 9%, India 9%, United Kingdom 8% (2019)South Africa 31%, India 18%, China 17% (2019)
Debt - external$2.102 billion (31 December 2017 est.)

$1.5 billion (31 December 2016 est.)
$10.91 billion (31 December 2017 est.)

$10.48 billion (31 December 2016 est.)
Exchange ratesMalawian kwachas (MWK) per US dollar -

762.4951 (2020 est.)

736.6548 (2019 est.)

732.335 (2018 est.)

499.6 (2014 est.)

424.9 (2013 est.)
meticais (MZM) per US dollar -

74.12 (2020 est.)

63.885 (2019 est.)

61.625 (2018 est.)

39.983 (2014 est.)

31.367 (2013 est.)
Fiscal year1 July - 30 Junecalendar year
Public debt59.2% of GDP (2017 est.)

60.3% of GDP (2016 est.)
102.1% of GDP (2017 est.)

121.6% of GDP (2016 est.)
Reserves of foreign exchange and gold$780.2 million (31 December 2017 est.)

$585.7 million (31 December 2016 est.)
$3.361 billion (31 December 2017 est.)

$2.081 billion (31 December 2016 est.)
Current Account Balance-$591 million (2017 est.)

-$744 million (2016 est.)
-$3.025 billion (2019 est.)

-$4.499 billion (2018 est.)
GDP (official exchange rate)$7.766 billion (2019 est.)$14.964 billion (2019 est.)
Ease of Doing Business Index scoresOverall score: 60.9 (2020)

Starting a Business score: 77.9 (2020)

Trading score: 65.3 (2020)

Enforcement score: 47.4 (2020)
Overall score: 55 (2020)

Starting a Business score: 69.3 (2020)

Trading score: 73.8 (2020)

Enforcement score: 39.8 (2020)
Taxes and other revenues21.7% (of GDP) (2017 est.)26.7% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-3.4% (of GDP) (2017 est.)-5.6% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 40.5%

male: 33.1%

female: 47.7% (2017 est.)
total: 7.4%

male: 7.7%

female: 7.1% (2015 est.)
GDP - composition, by end usehousehold consumption: 84.3% (2017 est.)

government consumption: 16.3% (2017 est.)

investment in fixed capital: 15.3% (2017 est.)

investment in inventories: 0% (2017 est.)

exports of goods and services: 27.9% (2017 est.)

imports of goods and services: -43.8% (2017 est.)
household consumption: 69.7% (2017 est.)

government consumption: 27.2% (2017 est.)

investment in fixed capital: 21.7% (2017 est.)

investment in inventories: 13.9% (2017 est.)

exports of goods and services: 38.3% (2017 est.)

imports of goods and services: -70.6% (2017 est.)
Gross national saving11% of GDP (2019 est.)

9.1% of GDP (2018 est.)

8.2% of GDP (2017 est.)
17.8% of GDP (2019 est.)

12.9% of GDP (2018 est.)

12.5% of GDP (2017 est.)

Source: CIA Factbook