Mozambique is considered a country with low economic freedom, according to the Index of Economic Freedom report, published annually by the Heritage Foundation. In 2024, the country dropped seven places from the previous year, ranking 141st out of 184 countries in the world. In the Sub-Saharan Africa ranking, Mozambique is 34th out of 48 nations, with a score of 50.7, which is slightly below the regional average.
According to the Heritage Foundation’s Index of Economic Freedom 2024, whose report celebrates the 30th anniversary of its publication this year, the sub-Saharan African region has only one country with a high degree of economic freedom (Mauritius) and four more with an average level (Botswana, Cape Verde, São Tomé and Príncipe and Seychelles, in that order). This is followed by a group of 29 nations, including Mozambique, with a low level and, finally, 14 countries where economic freedom does not exist or is strongly repressed.
In this index, which aims to distinguish countries that have more (or less) favourable environments for business, Mozambique obtained a final score of 50.7 (the score ranges from zero to 100), slightly below the regional average of 52.4. The performance in 2024 reversed a consistent upward trend that had begun in 2018 and culminated last year with a score of 52.5, equivalent to 134th place in the world ranking. This year, however, the country dropped to 141st in the world (a loss of seven positions) and 39th in sub-Saharan Africa (it was 29th in 2023), ahead of neighbouring countries such as Zambia and Zimbabwe, but behind Tanzania, Madagascar, Kenya, South Africa and Eswatini.
Monetary freedom is Mozambique’s best criterion
In terms of indicators, Mozambique has some very positive scores in items such as “Monetary Freedom” (76.1 points), “Weight of Taxes” (75.3), “Freedom of Trade” (70.8) and “Public Expenditure” (70.6) and also shows a good performance (above 50 points) in “Health of Public Accounts” (65.9) and “Financial Freedom” (50). The country’s worst criteria in this year’s ranking are, in that order, “Government Efficiency” (27.1), “Property Rights” (31.2), “Investment Freedom” (35), “Business Freedom” (36.1), “Judicial Efficiency” (44.6) and “Labour Market Freedom” (47.8).
At the top, Singapore is the country with the most economic freedom, followed by Switzerland and Ireland. Rounding off the top 10 are Taiwan, Luxembourg, New Zealand, Denmark, Estonia, Sweden and Norway. The least business-friendly countries are Iran, the Central African Republic, Burma, Guinea-Bissau and Bolivia.
CHAMPIONS OF ECONOMIC FREEDOM IN THE WORLD…
- Singapore 83.5
- Switzerland 83
- Ireland 82.6
- Taiwan 80
- Luxembourg 79.2
.. AND IN THE SUB-SAHARAN AFRICA REGION
- Mauritius 71.5 (19th)
- Botswana 68 (36th)
- Cape Verde 62.9 (57th)
- São Tomé and Príncipe 60.5 (77th)
- Seychelles 60.4 (68th)
- Mozambique 50.7 (141st)
Score varies from 0 to 100 (the higher the score, the greater the economic freedom). World ranking in brackets.
Source: Heritage Foundation, February 2024
What is the Index of Economic Freedom?
Published annually by the Heritage Foundation, it is considered the most widely used indicator for measuring countries’ level of economic freedom. The basic premise is that there is a positive correlation between nations with greater economic progress and those that offer a more favourable environment for business.
The index analyses the performance of 184 countries around the world on various indicators, grouped into four broad categories: “Rule of Law” (property rights, efficiency of the judicial system and integrity of government); “Weight of the State in the Economy” (tax burden, public spending and health of public accounts); “Regulatory Efficiency” (business-friendly legislation, the labour market and the monetary and exchange rate system) and “Market Openness” (freedom in trade, investment and financial transactions).
The scores range from zero to 100. Countries with scores below 50 are considered to have no economic freedom. Between 50 and 60 points, economic freedom is considered scarce and between 60 and 70 moderate. Above 70 points, the economic environment is classified as free (partially between 70 and 80 and fully above 80).
Jaime Fidalgo
