Mozambique's Economic Outlook for 2024

By Wendell Roelf

CAPE TOWN (Reuters) – Mozambique's projected economic growth for 2024 is expected to be revised down from an earlier estimate of 4.3%. This adjustment is primarily due to post-election civil unrest and the repercussions of Cyclone Chido, according to a senior official from the International Monetary Fund (IMF).

In October, Daniel Chapo of the ruling party Frelimo was declared the winner of the presidential election, a result that has faced accusations of voting irregularities from opposition factions. These disputed results have led to protests from opposition supporters, escalating violence, and disruptions to business operations, notably impacting mining companies and leading to temporary closures of key trade corridors.

Mozambique's Constitutional Council is set to decide on the election count's validity on December 23. Many civil society organizations and analysts are concerned that upholding Frelimo’s victory could provoke further violence and economic instability.

IMF representative Olamide Harrison noted that growth dropped from 4.5% in the second quarter to 3.7% in the third quarter, even before the protests commenced. “In light of the protests and natural disasters, we anticipate an additional slowdown in the fourth quarter, followed by a modest recovery in 2025,” he stated.

Harrison expressed the IMF's sorrow for the loss of lives amid the protests, describing the situation as “difficult” and an issue that the organization is monitoring closely. Additionally, Cyclone Chido recently impacted northern Mozambique, resulting in at least 34 fatalities and further diminishing growth expectations.

Harrison indicated that discussions regarding a three-year credit facility between the IMF and Mozambican authorities will recommence once a political transition is finalized. “We will wait until the new government is established before resuming negotiations,” he explained, referring to the standard procedure followed during political transitions amid ongoing IMF lending agreements.