An analysis of development indices among countries in the Southern African Development Community (SADC) and worldwide has revealed that Mozambique is among the worst in several respects. The report of the Commitment to Inequality Reduction Index (CRII) shows that the country performs poorly in public services and labor rights, but slightly stronger in taxes, writes Oxfam.

Public service spending in Mozambique falls short of global and regional targets in all three key sectors (7% in education, 8% in health, and 5% in social protection). This contributes to very poor outcomes, with less than 1% of the poorest children completing secondary education, 54% of Mozambicans without universal health care, and only 13% of the population receiving any social protection (pre-covid). Public services are reducing inequality by 5%, but could do much more.

The country's tax system is relatively progressive on paper, but low income earners start paying income tax at very low income levels, just as poor consumers pay high VAT with no minimum threshold to exempt small traders and their poor customers.

In addition, taxes on wealth are very low or non-existent. Mozambique levies very little tax on people's income, and tax exemptions (especially for companies in economic and industrial and special zones, but also on VAT for products and institutions that do not benefit the poor) exceed 2.3% of GDP. As a result, taxes are increasing inequality by about 3%.

At the SADC level it ranks ninth, 18th out of 47 countries in Africa, and 116th out of 158 countries analyzed in the CRI, in the inequality reduction index.

"The findings of this analysis are shocking, but they confirm the reality of many countries in this resource-rich but poor and unequal region," says Dailes Judge, Oxfam's Program Director in Southern Africa. "Inequalities in most countries in the region are the main drivers of reduced economic growth and weakened essential services, such as quality healthcare and education.