Macroeconomic impact of COVID-19 in Mozambique

On 15 April 2021, Rosário Betho, Senior Consultant at the Ministry of Economy and Finance of Mozambique, presents a recent research on the macroeconomic impact of COVID-19 in Mozambique. 

The presentation is based on the working paper ‘The macroeconomic impact of COVID-19 in Mozambique: A social accounting matrix approach’ (soon to be published in English and Portuguese). 

The presentation will be in Portuguese. 

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Please note that the presentations is recorded. The presentation slides and the recording will be shared with the seminar participants soon after the event. 

About the research 

The study aims to assess the economic costs of COVID-19 and the state of emergency implemented by the Government of Mozambique, relying on a social accounting multiplier model. It produces numerical results that represent the direct effect on (or “shocks” to) the economy associated with the pandemic. The paper distinguishes four channels—supply, demand, investment, and export—by which the state of emergency and other efforts influence economic activity. The simulation suggests that the Mozambican economy lost a total of 3.6% growth in 2020 and that total employment was 1.9% down compared to a scenario without COVID-19. The main part of this loss is foreign-instigated, resulting from a demand reduction for Mozambican products by the rest of the world. The most heavily affected economic sectors are trade & accommodation and mining. Furthermore, the simulation implies that the production factors of capital and urban labour are more impacted than rural labour. Moreover, the multiplier exercise brings out the high dependence of Mozambique on a small number of export items (including tourism). Accordingly, Mozambique should promote economic diversification and explore the potential of reducing Mozambique’s vulnerability to foreign shocks. 

About the IGM Seminar Series  

The online IGM Seminar Series provides a space to discuss research themes with a focus on the challenges of promoting inclusive growth in Mozambique at a time of overlapping crises: the economic and financial crisis of hidden debt, the climate crisis, and the global health crisis.