Mozambique is a rich country with a vast expanse of land. It has diverse natural resources from Rovuma to Maputo and from Zumbo to the Indian Ocean. Liquefied natural gas alone, the export of which begins in November 2022, has a gigantic wealth, with more than 120 billion cubic feet hidden in the province of Cabo Delgado.

And the most extraordinary thing is that, according to experts in the sector, estimates of commercially recoverable gas could double in the next few years and put the country on the list of the world's biggest producers. However, all this wealth of resources that the country has available and is exploiting is far from being transformed into real wealth in the lives of Mozambicans.

The country is still mired in deep poverty. And that's what the various national and international statistics show. And reality also shows the same.

The National Development Strategy (ENDE) 2025-2044, approved by the Council of Ministers, indicates that poverty has increased by around 87% in 10 years, with the biggest increase occurring in the period when the main partners had stopped providing financial assistance to the country, following the discovery of the hidden debts scandal.

According to Global Finance magazine's 2023 ranking, Mozambique is the sixth poorest country in the world (with a GDP per capita of 1556 dollars). It is also currently the 11th worst country in the world to live in, according to the 2024 World Human Development Index (HDI).

What's failing? 

Economists, researchers and academics contacted by MZNews almost converge on what may be the real causes that put Mozambique on the list of the poorest countries in the world, even with an abundance of natural resources.

They say there is an urgent need to invest in key sectors and in the creation of infrastructure for the country's economic development with the revenues that come from natural resources.

But the problem is also the high burden of public debt, which is growing by leaps and bounds year after year. Last year alone the government accumulated a debt of more than 15 billion dollars, an increase of around 5.2% according to data from the Ministry of Economy and Finance. This is where things start to get ugly for Mozambique.

There is also a strong dependence on foreign aid derived from an unsustainable public debt, which is over 80%. "This is more than double what is recommended by international institutions," says Elcídio Bachita, an economist and university lecturer.

"The country is still mired in deep poverty, even though it has vast natural resources." 

This is why Mozambique is also on the list of the five most indebted countries in the world. As part of the solution, Bachita says that the state must urgently look for efficient mechanisms to reduce public debt, especially external debt, at the risk of jeopardizing the country's development over the next 20 or 30 years.

"What the country manages to produce, it spends on loan repayments rather than on investment in socio-economic sectors, which represents a delay in the country's progress," he explains.

The academic and professor Lourenço do Rosário takes a different view. He believes that the problem stems from our country's colonial history. And it seems that this is still the case today. He says that the relationship between the developed world and the countries that were colonies remains the same: "extraction of our wealth that goes abroad and does not benefit our people". He also says that "mentally and economically we are still a colony".

"Our natural resources continue to be extracted to enrich the countries that once dominated us," says the academic. Do Rosário goes further and says that as a nation we are lost. "While you are lost, you don't have a strategy, you don't have a state agenda that is common to all Mozambicans, which is to defend the sense of sovereignty with the autonomy of our own technical staff for development."

Somewhat along the same lines is the opinion of researcher and economist Moisés Siúta. According to Siúta, the first thing to think about is whether or not the projects are actually designed in a way that benefits the people.

• "The state must urgently look for efficient mechanisms to reduce public debt, especially external debt, at the risk of jeopardizing the country's development over the next 20 or 30 years."

"The criticism that has often been leveled by civil society is that the projects are not designed in such a way as to leave additional revenue and benefits for Mozambique." For the economist, "there is a need in this matter of the projects we already have, to strengthen the verification processes, of what can be done better so that the country benefits from more revenue".

Constantino Marrengula, also an economist and university lecturer, questions the functionality of political institutions in capitalizing on these resources to make gains for the people. He believes that political will plays a major role in changing this scenario.

"The biggest issue is our political institutions and how they are organized to produce results that favour Mozambique, where we are still some light years away from what would be desirable," says Marrengula.

Ways forward

Natural resources alone won't be enough to pull the country out of the doldrums if there aren't profound changes in the way the gains from these resources are managed.

Rui Mate, a researcher at the Center for Public Integrity (CIP) in the field of extractive industries, talks about the misapplication of the benefits that come from natural resources. He blames the lack of development-oriented policies on the part of government authorities.

He advocates the creation of bases so that the exploitation of these resources has visible, evident and golden benefits not only for the generation that is exploiting them directly, but also for future generations. "And this happens through the creation of infrastructures, services and the diversification of the economy itself," he stresses.

There is no doubt that resource revenues are an asset for economic growth when they are applied to key sectors. Countries like Norway, the Netherlands and others are examples of this.

"Our resources continue to be extracted to enrich the once dominant countries." 

Bachita says that the income from these resources needs to be used to create job opportunities for the majority of young people leaving university and technical and professional education.

"It is these human resources that will be able to drive the country's economic development," says the economist.

Not least because we are dealing with exhaustible resources. The way forward may also consist of better inclusion of the Mozambican business sector in major projects.

This requires an equally capable private sector in order to cope with the demand from major projects. Not only that, it requires the installation of local processing industries to transform what is produced. Suita believes that better inclusion could improve and accelerate the country's economic growth.

Simone Santi, president of EuroCam-Association of European Chambers of Commerce in Mozambique agrees that the business sector is crucial to accelerating the country's economic development. She says that the government's priority should be to create a strong national business sector, with the transformation of the national product.