Over the past two decades Mozambiqueenjoyed robust and accelerating economic growth, yet strongeconomic progress only translated into modest povertyreduction. Not only poverty fell at slower pace thanexpected but the gains in income and consumption growth areunevenly distributed across the country and across groups ofpeople. Some parts of the country –especially the center andthe north– account for a disproportionate share of the poor.Overall, urban provinces tend to have lower poverty ratesthan rural provinces, particularly those in the central andnorthern parts of the country. Three factors contribute tothe low equity outcomes in Mozambique: (i) unequal access toeconomic opportunities across regions and income groups;(ii) low productivity and market-based growth inagriculture; and (iii) high vulnerability to weather shocks.Growth could have had a much larger impact on povertyreduction in Mozambique if its effects had not been offsetby the observed increase in inequality. Accelerating povertyreduction requires addressing structural factors thatundermine the inclusiveness of growth. The returns to growthhave to be distributed more widely to invest in the mostisolated parts of the country in for these regions to beable to seize the economic opportunities brought about byeconomic expansion and close the gap with the rest of thecountry. There is a need to deepen the investments in thehuman, physical and institutional capital of the country.Finally, given the high exposure of Mozambique to naturaldisasters, it is necessary to strengthen formal and informalrisk management systems to avoid that the living standardsof the population are highly influenced by major shocks outof their control.
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