The Prime Minister, Carlos Agostinho do Rosário, says that the Mozambican currency, has been registering a gradual stability in the exchange market, “a scenario that feeds the hope of solidity of the price level with the response from the production side”.
Speaking a few days ago in Maputo at the Assembly of the Republic, the Mozambican Parliament, on the first day of the Government’s information session, the Prime Minister explained that, at the macroeconomic level, Mozambique recorded a depreciation trend of the Metical against the US dollar by the end of 2020.
The depreciation trend of the Metical “is mainly due to the strong demand for foreign currency for the import of goods and services, as well as the trend of strengthening of the US dollar in the international market.
The Prime Minister assured that given the projections that pointed to scenarios of rising general price levels, combined fiscal and monetary measures were taken in order to ensure macroeconomic stability.
The ruler outlined a gloomy picture due to the combination of several adversities, especially Covid-19, which caused, for the first time in the last 30 years, the Mozambican economy “to have a negative economic growth that stood at -1.3%, in 2020, against a growth of 2.2% in 2019.”
According to Carlos do Rosário, in the case of Mozambique, the Covid-19 pandemic came to worsen the impacts resulting from the heinous actions practiced by the terrorist groups in Cabo Delgado, and by the self-proclaimed Renamo Military Junta, in the Central zone, as well as by the occurrence of natural disasters.
He said the unprecedented economic contraction is ravaging the whole world, caused by restrictive measures taken by several governments at the level of the Southern African Development Community (SADC) region and at the international level in order to contain the spread of Covid-19.
With the exception of China, almost all developed, emerging and developing economies recorded negative growth rates. “Indeed, by 2020 the world economy is estimated to have contracted by 3.5% and Africa’s by 2.1%, the largest economic contraction recorded on our continent in the last 50 years.”
According to the Prime Minister, “this situation has been having a negative impact on the lives of families and on the productive sector, mainly, on small and medium enterprises, due to its effect in reducing employment opportunities, income, and purchasing power.
As if that were not enough, indicated the Prime Minister, in the first months of this year, Mozambique, like all SADC countries and other quadrants of the world, is being ravaged by a second wave of Covid-19, characterized by a new increase, this time more pronounced, in the number of infections, hospitalizations and deaths.
The emergence of the second wave is related, among several causes, to the emergence of new variants of Covid-19, especially the so-called South African variant which is much more transmissible and has spread rapidly throughout all countries in the SADC region, including Mozambique, as well as to non-compliance with general measures to prevent and combat the pandemic.
