Growth without Change? A Case Study of Economic Transformation in Mozambique

Abstract

Abstract Mozambique is generally perceived as having experienced rapid economic growth and urbanization. In this paper we re-evaluate structural transformation in Mozambique through a variety of data. We find that the structural transformation of Mozambique is dualistic in several dimensions. The composition of output has changed rapidly on the back of various industrial “mega-projects”, yet both the share of agriculture in total employment and the national poverty rate have scarcely declined at all. In agriculture, there has been some promising growth in the cash crop sector, yet productivity of major food crops stagnated for most of the 2000s. And while the south of the country is significantly urbanized, spatially disaggregated population estimates suggest that Mozambique has experienced much less urbanization than UN data would suggest. These facts suggest that a more pro-poor strategy should exploit the pro-poor growth potential of the agricultural sector, as well as improving the business environment for the small and medium enterprise sector.