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Republic of Mozambique and the IMF

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Finance & Development
A quarterly magazine of the IMF
March 2006, Volume 43, Number 1

Country Focus


Since the end of the civil war in 1992, Mozambique has made impressive progress on growth (about 8 percent a year from 1994 to 2004) and poverty reduction (from 69 percent in 1996/97 to 54 percent in 2002/03), thanks to prudent macroeconomic policies, far-reaching structural reforms, and substantial donor assistance.

Agricultutal catch-up initially led economic growth and was later supported by industry and services.Prudent monetary and fiscal policies have helped stabilize the economy.Exports soared, complementing aid inflows and FDI, leading to a comfortable external position.The health of the banking sector has improved recently following privatization and restructuring.Although almost a third of the population still lives on less than $1 a day, broad-based growth has led to one of the lowest levels of inequality in Africa.The Millennium Development Goals for infant mortality and income povery are in reach, but more effort is needed to achieve the primary education goal.