The start-up of the liquid natural gas projects in northern Mozambique’s is expected to boost the country’s balance of trade, but consumer demand is unlikely to pick up in the short term, according to the World Bank. This means that the growth in the logistics sector will be driven by project cargo and exports and imports from neighbouring countries rather than Mozambican consumers and manufacturers. There is also expected to be increased demand from the agricultural sector. “Growth is projected to be 4.5% in 2019 and 5.0% in 2020, driven by agriculture, which is continuing to recover from the 2015–16 regional drought, and extractive industries, with coal exports continuing to expand,” says the African Development Bank in its assessment of the Mozambican economy. “There are also bright prospects of increased foreign direct investment in gas-related megaprojects in the Rovuma Basin in 2019,” it adds. In its assessment of Mozambican prospects, the World Bank says the economy will receive a boost once major LNG projects come online, with significant export opportunities and inward investment. “However, spillover effects for most of the population will be extremely limited.” The country is still trying to deal with the after-effects of its 2016 “hidden debt” crisis which resulted from state-owned companies putting the country into US$2- billion debt for what Bloomberg News describes as “dubious projects”. “Macroeconomic conditions are improving, but the economic performance is yet to revert to the pre-crisis levels,” says the World Bank. Real gross domestic product (GDP) growth is estimated at 3.3% in 2018, down from 3.7% in 2017 and 3.8% in 2016. This is well below the 7% GDP growth achieved on average between 2011 and 2015. Small and medium enterprises have been hard hit, and their capacity to generate jobs has been restricted even further as credit supply and demand for goods and services remains constrained, according to the World Bank.
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