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Chapo’s economic rebalancing act

We are still waiting for details on how the government plans to diversify the economy away from extracting raw materials

President Daniel Chapo with João Machatine. Photo: Mozambican presidency

Good afternoon. President Daniel Chapo has said that he wants to reduce Mozambique’s economic reliance on exporting raw materials, and end what he calls the “extractivist paradigm” (see below). He was speaking yesterday as he inaugurated João Machatine, head of the new Office for Coordinating Reforms and Strategic Projects. This office is apparently intended, amongst other things, to monitor the work of companies in the natural resources sectors and make sure that they keep their promises to local people about delivering development projects. Failure to keep those promises — to build roads, schools, health centres and so on, or to provide jobs — is a common complaint.

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Chapo is right that the dominant role of raw materials in Mozambique’s exports is a colonial inheritance. But under his ruling Frelimo party, that dominance has only accelerated. Today as in colonial times, foreign firms are busily mining, cutting timber (often illegally) and exporting gas, in greater amounts than ever and with little or no processing taking place within the country, and few skilled jobs created. Until now, Frelimo has been happy to let this happen, as long as its elites take their share of the profits.

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