THE economic meltdown in Zimbabwe has the potential to put the brakes on economic growth throughout the whole of the southern African region, Mozambiqueâ€™s central bank governor said this week.
In his annual report, bank chief Ernesto Gove said that Mozambiqueâ€™s economy grew by 7,3% in 2007 but he warned that the situation across its western border was already impacting on the prospects of further progress. “In the Sadc region, the political and economic problems in Zimbabwe remained unchanged, with tendencies to escalate, creating adverse side effects for the neighbouring countries like Mozambique,” said Gove.
Zimbabwe has been one of Mozambiqueâ€™s biggest regional partners, using the countryâ€™â€™s ports of Beira and Maputo to access sea routes to move goods to and from international markets.
As Zimbabwe faces an increasing political and economic crisis, mass food shortages and sky high inflation, hundreds of thousands of Zimbabweans have fled to Mozambique in search of jobs. Mozambique, once one of the worldâ€™s poorest countries during its bloody 16-year civil war, has recorded a strong record of growth since the end of the conflict in 1992.
Since holding democratic elections in 1994 and achieving macro-economic stability in 1996 the country has averaged eight percent growth a year, with other factors beyond Mozambiqueâ€™s control posing a threat to growth.
However, despite global challenges of rising fuel and cereal costs the economyâ€™s growth was in line with initial forecasts, the report showed.
“In 2007 the economy grew 7,3%, in line with initial forecasts, even though the country was faced with exogenous shocks deriving from rising prices of crude oil and cereals in the international market, which dictated periodic adjustments in domestic prices.”
The increase in food and fuel costs internationally also impacted the bankâ€™s efforts to reduce inflation to a single digit, however inflation had slowed to 8,16% from 13% in 2006. â€” news24.