Mozambique: Economic Diversification is Essential But is Not Happening, Says ENDE

GDP has been growing at 7% per year for two decades, yet poverty increases. Changing this requires "economic diversification", which is not happening, admits ENDE. In 2022, 75% of the workforce was in the primary sector - agriculture and natural resources - but the dominance of low-tech farming means the primary sector is only 37% of GDP.

"The extractive sub-sector is heavily dependent on mega-projects that are not labour-intensive" and most people still depend on very low productivity farming. There is little access to inputs such as fertilizer and modern technologies, extension services are limited, and there is little agro-processing. Farming and fishing is "mainly carried out by individuals with no formal education and who have never attended school."

ENDE does not say so, but from Europe to Bangladesh and including Mozambique neighbours Malawi and Zimbabwe, agricultural changes are dependent on subsidies and market intervention, which has never been allowed in Mozambique and are not included in the ENDE priorities. Instead ENDE sticks the old programme of development corridors without saying how they would work.

The manufacturing sector remains tiny, with little investment and poorly qualified workers. Share of the workforce in manufacturing has remained at 4%, but in the past two decades its share of GDP has dropped from 19% to 12%.

The third sector is services, transport and tourism. Share of GDP has dropped from 61% in 2000 to 50% 2022, but workforce has doubled from 9% to 20% of the total, suggesting low pay in the informal sector.

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