Mozambique: Extreme Inequality Constraining Growth
By Joseph Hanlon
“An imbalanced growth path disproportionally benefitted the better-off and caused increasing inequality, especially in more recent years, curbing the necessary reduction of poverty”, concludes a new study by the United Nations University World Institute of Development in Helsinki. This significant increase in inequality is “characterised by the emergence of a non-subsistence economy in Maputo and other urban areas, in a resource-based country, with a shrinking public sector, the expansion of education and the emergence of a small but highly educated elite.”
The study notes that inequality is higher in Mozambican urban areas than the Africa average. Maputo city has the highest inequality.
Nearly half the population remains below the poverty line and inequality is increasing, especially in recent years, “due to consumption disproportionately increasing among the better off”.
Statistics are often misused or misunderstood in Mozambique, so the study is particularly useful because it confirmed increasing inequality with various methods, including Gini, Lorenz and Generalised Entropy.
The paper on the South African Journal of Economics is by Carlos Gradin and Finn Tarp and is available, free.