Mozambique’s economic growth forecast for 2024 is set to be downgraded from the earlier projection of 4.3%, with the International Monetary Fund (IMF) citing the dual impact of post-election unrest and the devastation caused by Cyclone Chido.
The country has been grappling with heightened political tensions following the October presidential election, where Daniel Chapo, representing the ruling Frelimo party, was declared the winner. Opposition groups have vehemently contested the results, alleging widespread electoral irregularities. This has led to violent protests, further exacerbating the already fragile political and economic environment.
The unrest has disrupted key business operations, particularly in the mining sector, and has at times forced the closure of essential trade routes. Mozambique’s Constitutional Council is scheduled to rule on the legitimacy of the election results on December 23, with fears that a confirmation of Frelimo’s victory could intensify the violence and contribute to further economic instability.
Olamide Harrison, the IMF’s resident representative for Mozambique, reported a notable slowdown in economic activity, with growth dropping from 4.5% in the second quarter to 3.7% in the third quarter. “Given the ongoing protests and the impact of natural disasters, we anticipate a further deceleration in economic performance in the fourth quarter, though we expect a modest recovery in 2025,” Harrison said. The IMF official also expressed deep sorrow over the loss of life during the protests, emphasizing that the situation remains under close observation by the global lender.
In addition to the political crisis, Cyclone Chido, which struck northern Mozambique over the weekend, has caused widespread destruction and claimed at least 34 lives. The cyclone’s impact has disrupted vital infrastructure and severely affected key sectors, including agriculture, compounding the country’s economic difficulties.
Harrison further noted that discussions regarding a potential three-year credit facility between the IMF and the Mozambican government will resume only once the political transition is complete. “We are awaiting the installation of the new government before continuing negotiations,” he said, explaining that this procedure is standard during political transitions in countries with ongoing IMF programs.
As Mozambique navigates these turbulent challenges, the country’s ability to stabilize politically and recover from the disaster will be crucial in determining the trajectory of its economic recovery.