In the last 10 years, Mozambique's economy has grown steadily at an impressive rate of 7.7 percent per year, driven by the service sector, light industry, and agriculture. This pace is expected to continue or even increase with the massive influx of already-planned investment on the order of $15-20 billion.
Mozambique's infrastructure is well developed in some sectors, including its east-west transport infrastructure, power grid, and water and sanitation networks. But the nation still faces critical challenges in these and other areas, including developing north-south transport connections, properly managing the water system, and expanding hydroelectric generation to meet potential.
Mozambique spent about $664 million per year on infrastructure during the late 2000s, with as much as $204 million lost annually to inefficiencies. Comparing spending needs with existing spending and potential efficiency gains leaves an annual funding gap of $822 million per year.
Mozambique could reduce inefficiency losses by positioning itself as a key power exporter. The country could reach infrastructure targets in 20 years through a combination of increased finance, improved efficiency, and cost-reducing innovations.
Author: Dominguez-Torres, Carolina ; Briceno-Garmendia, Cecilia. Document Date:2011/11/01.Document Type: Policy Research Working Paper.Report Number: WPS5885. Volume No:1 of 1
