Mozambique. Despite impressive economic growth over a
number of years and major investments in infrastructure
development, the government of Mozambique has not
significantly succeeded in raising the population's living
standards. About 55 percent of residents are estimated to
live in poverty, a level that has been stuck for several
When the government in early September allowed the price
of bread to rise by about 30 percent and also raised the
price of gasoline and electricity, severe unrest erupted in
several cities. At least 14 people were shot dead by the
police and hundreds were arrested. The bread became so much
more expensive, according to analysts, both because of a
sharp rise in wheat prices on the world market and a falling
value for Mozambique's currency, which increased imports
from South Africa.
COUNTRYAAH, the government announced that the price increase for
bread was "unstoppable" but backed down after only a few
days. To a certain extent, the subsidies on gasoline and
electricity were also reintroduced. As a result of the
crisis, the Minister of Agriculture was dismissed and
replaced by the Minister of the Interior, who had taken a
tough stance and defended the shootings during the unrest.
Earlier in the year, Mozambique's state power company and
a Portuguese partner had signed a contract to expand the
country's electricity grid to a sum of about SEK 11 billion.
The World Bank and the Norwegian government are largely
responsible for the financing.