Almost African countries won the independence, because after the Second World War Europeans nations were weakened and this created possibilities for African colonies to fight for freedom, Except for Portuguese colonies, Portugal had been neutral during World War II and the “Estado Novo” or Portuguese dictatorship drove the country and all the colonies with “the sweet iron hand” until April 1974.
Mozambique became independent from Portugal on June 25, 1975. The Front for the Liberation of Mozambique (FRELIMO) made the first government with a strong influence from the Soviet Union, FRELIMO established a one-party and the Socialist State. After a few years the civil war exploded, and it lasted 16 years starting in 1977 and finishing 1992.
Formed in 1975 the Mozambican National Resistance (RENAMO), was the main objector to Mozambique’s government. RENAMO intensified the fights in 1990, supported by U.S. forces, South Africa and the newly independence country, Zimbabwe, thus in November 1990 FRELIMO government adopted a new constitution that guaranteed multiparty state and periodic elections.
62 In October 1992, the cease-fire agreement was signed in Rome between opponents and in 1994 Mozambique had the first free elections: the FRELIMO party won the election and after one year Mozambique joined the Commonwealth of Nations, hence the ex-Portuguese colonial is the only member of Commonwealth of Nations, that never been part of the British Empire.
By mid-1995, around 5.7 million refugees returned to their homes, over 1.7 million refugees who had sought asylum in neighboring countries had returned to Mozambique and the internally displaced completed this number (Mozambique Government report 2010).
Mozambique has 799.380 square kilometers and 10 provinces, the country have fought very successfully against the extreme rural poverty, this was reduced from 83,9 percent in 1990 to 47,9 percent in 2005 (World Bank data). Then again, extreme rural poverty trend changed after 1995 and poverty reduction was accelerated between 1995 and 2002, unfortunately after 2002, rural poverty reductions come back of the first year’s rhythm of 1990s.
The income GDP per capita following poverty reduction lasted until 2002, after that we saw a dichotomy of the data. Until 1995 both indexes remained relatively stable, after this year the rural poverty reduction and income GDP per capita statistics improved considerably, the income GDP per capita fluctuated between 2000 – 2002, but rural poverty reduction kept its good performance. After that income GDP per capita restarted growing well, on the other hand, rural poverty reduction slowed the accomplishment.
1995 was a significant also for the agricultural gross per capita production index (API), it grew 22 points in a year, but that was the unique sprint, while between 1996 and 2005 API remained stable. This climb of the API level helped the agricultural trade balance of Mozambique that reduced the deficit during the three successive years (chart 4.11).
63 Chart 4.11: Mozambique macroeconomic environment
Source: Agricultural trade balance and gross per capita produciton index by FAOstat and rural poverty line and GDP per capita by The World Bank data.
To explain the low performance of the agricultural sector, we should be aware of Mozambique particularity, the northern and central provinces have a fine agro-ecological conditions and good potential to develop agro-business, on the other hand southern provinces have a very poorer soil and scarce rainfall, in addition are subject to recurrent droughts and floods.
Furthermore, the majority of the farms in Mozambique have produced goods for subsistence or the regional market. Typically a farm has on average 1,3 hectares, has no deed of property and never had access to credit market. (IFAD 2004).
On the other hand, 83 percent of the employees who earn a salary and 70 percent of urban population are in the south region, and in addition Mozambique has ones of the worst transports systems in SSA. According IFAD (2004), to carry agricultural goods for more than 50 kilometers, it takes more than a week and the average cost of transporting is bigger than the product value.
As a consequence only one quarter of the arable land was cultivated in 2004 (IFAD 2004), the south of the country imported food from South Africa and Europe. And the central and north regions have a slow development and have carried out the “informal”
trades with Malawi and Zambia (Abdula and Tschirley 2007).
64 Not only the agriculture sector suffered with Mozambique's mismatch, all the domestic credit to private sector shrunk between 1990 and 2005 in percentile of GDP from 17,58 to 11,84. But again the IFAD estimated that rural sector suffered more and in 2004 got around 3,5 percent of the credit from the private sector. Although Mozambique in this period did not has big problems with macroeconomics numbers, because the foreign direct investment net was on average 3,51 percent of the GDP between 1990 and 2005, it overtook by an average of 40 percent the budget government deficit (World Bank data).
In spite of the access to finance, in Mozambique there were bigger problems for entrepreneurs there, according to the EnterpriseSurveys (2007) to have access to finance in Mozambique is 40 percent more difficult than SSA averagely. On the other hand, corruption of public officials is around 20 percent lower than SSA average, hence the contraction of credit private sector has other starting point, probable owing to regulation, taxes or the bureaucratic system.
Apparently the bureaucratic system affected also the gross school enrollment ratio at the primary level, which increased only by 0,10 percent between 1990 and 1998, from 62.89 percent in 1990 to 63.80 percent in 1998, but the index changed the trend and soared significantly, between 1998 and 2005 from 63.80 percent to 101.10 percent rose on average 5,44 percent per year.
The life expectancy at birth followed the inverse movement of education level and improved regularly, between 1990 – 1998 it rose from 43.34 years to 47.17 years. After 1998 the life expectancy level remained stable and in 2005 it was 47,61 years (World Bank data). Although the mortality rate per thousand births improved sharply from 155.2 children 1990 to 109.1 in 2005, this happened because HIV/AIDS pandemic dramatically affected all the health system (UN data).
Official numbers of people who died because of AIDS in Mozambique, sky-rocketed, in 1990 the number was 2.200 people per year but in 2005 it was 71.000 people, and the UN estimated that around 1.400.000 of people were living with HIV, that means 11.5 percent of population, so this phenomenon produced around 670.000 orphans in that period.
65 Also we can say that the infrastructure situation in Mozambique seems a nightmare, notwithstanding a good geographic position, with 4.571 kilometers of coastline on Indian Ocean and three countries that must use it infrastructure to access international market – Malawi, Zambia and Zimbabwe – the road and rail lines densities persist in the same density.
Road density in 1990 was 3,36, and arrived to 3,78 in 2005 while rail lines density had the same numbers during these sixteen years; 0,38 kilometers per 100 square kilometers of land area. For the farmers in Mozambique worse than density numbers is the government strategy that has invested in the so called “corridors”.
The corridors always have latitudinal position toward the east – west linkages, they leave the north arable land and south consumers without linkage, furthermore, the conditions of the main road, which has longitudinal direction and connects north – south areas, are in fair or poor conditions, depending on part of road (Dominguez-Torres and Briceño-Garmendia 2011).
Currently, the Mozambique exports have with main partners the Netherlands (47%), South Africa (20,8%) Portugal (5%) and China (3%). The main goods exported are unwrought aluminum, electrical energy and unmanufactured tobacco. On the other hand Mozambique imported mainly; motor vehicles, petroleum and commodities foods to South Africa (43%) Portugal (3,7%) India (2,8%) U.S. (2,6%) in 2005 (CIA data).
EU 27 is the major partner and represented 43,6 percent of the Mozambique international trades, exporting USD 858,6 million and importing USD 1.136,5 million.
The EU 27 had a negative balance exporting mainly machinery and importing basically aluminum. However, Mozambique's international trade was historically negative in 2005 (Eurostat).
We observed which this phenomenon, the problem of trade balance, can does resolve with a higher integration within Mozambique regions, using the agricultural potentials, and improvement of the environment business.
66 The Mozambique environment business has positives and negatives points: unlike most SSA countries, Mozambique does not have problems with the electricity supply, apparently corruptions levels and tax rates are lower than SSA average. In contrast, entrepreneurs in Mozambique have to deal with problems like access to finance, a huge informal sector and highs transport costs; all these items have higher levels than SSA average.
Despite all negative events, the agricultural business continued to grow constantly, harvest areas leapt from 3.564 thousands hectares in 1990, to 4.429 thousands hectares in 2005. Unfortunately the majority's area is mostly using subsistence or “food crops” as maize and cassava, while traditional crops like sorghum have been replaced by cash crops like cotton (chart 4.12).
Chart 4.12: Mozambique main crops
Source: FAOstat
The percentile of GDP share in Mozambique had changed after the democratic period and industry value had been increasing. Here we can see other example that did not follow the classic hypothesis (Lipton and Ravallion 1993, Roemer and Gugerty 1997, Delgado, et al 1998), despite Mozambique has unused arable land, the agriculture in Mozambique is underdevelopment and the country has problems with supply foods, although the urban areas and local industry have been stocked by food imported (chart 4.13).
67 Chart 4.13: Mozambique percentile of GDP share
Source; The World Bank data