Oct. 26 (Bloomberg) -- Mozambique’s economy should remain strong this year and next, fueled by new coal exports and a natural gas find, World Bank economist Ricardo Gazel said.
The southern African country’s economy is expected to expand 7.25 percent this year and 7.5 percent in 2012, Gazel said in a telephone interview today from Maputo, Mozambique’s capital. The economy grew 6.8 percent last year, according to International Monetary Fund data.
“Big projects in coal mining and gas will contribute to strong growth in Mozambique in coming years,” said Gazel, the Washington-based lender’s economist for Mozambique and Angola. “There are risks coming from a global economic slowdown, which could weigh on exports, foreign investment and external aid to Mozambique.”
He said a giant natural gas discovery off Mozambique by Italy’s Eni SpA and the first exports of coal from the country in 20 years may bring new wealth to Mozambique. The government is “making an effort” to increase government transparency and attract foreign investment, though more should be done to develop farming and reduce unemployment, Gazel said.
Over half of Mozambique’s 23.3 million people lived below the national poverty line in 2008 and life expectancy at birth in 2009 was 49 years, according to data from the World Bank.
“Economic growth in Mozambique is still very much concentrated on big projects,” said Gazel.
Eni announced on Oct. 20 it had found a “giant” natural gas field off Mozambique that may hold enough gas to supply the U.K. for more than four years.
Brazil’s Vale SA started exports of coal this year from its Moatize mine in Mozambique. The company is studying doubling the output capacity of the mine to 22 million metric tons per year, newspaper Valor Economico reported on Sept. 29.
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