MUTASA SUPERIOR INSTITUTE

ORGANIC UNIT OF CHIMOIO

THE IMPACT OF THE COVID 19 PANDEMIC (SOCIAL, ECONOMICAL)

NAME OF THE STUDENT:

SALEZIO SETE

BACHELOR'S DEGREE IN PUBLIC ADMINISTRATION

Chimoio, March 2023

 MUTASA SUPERIOR INSTITUTE

ORGANIC UNIT OF CHIMOIO

THE IMPACT OF THE COVID 19 PANDEMIC (SOCIAL, ECONOMICAL)

TEACHER:

DR. ZVIDZAI XAVIER

PERFORMED BY:

SALEZIO SETE

BACHELOR'S DEGREE IN PUBLIC ADMINISTRATION

Chimoio, March 2023

ÍNDICE

Content

CHAPTER I: INTRODUCTION.....................................................................................................1

1.1 Contextualization...............................................................................................................1

1.1 Objectives...............................................................................................................................1

1.2.1 General.............................................................................................................................1

1.2.2 Specifics...............................................................................................................................2

1.3 Methodology...........................................................................................................................2

1.4 Work structure........................................................................................................................2

CHAPTER II: DEVELOPMENT.....................................................................................................3

2.1 COVID-19 in Mozambique....................................................................................................3

2.2 The Socioeconomic impact of COVID-19 in Mozambique...................................................6

CHAPTER III: CONCLUSION.....................................................................................................10

CHAPTER IV: BIBLIOGRAPHICAL REFERENCES................................................................11

CHAPTER I: INTRODUCTION

1.1 Contextualization

The Government of Mozambique has done its utmost to contain the spread of the
COVID-19 pandemic while simultaneously aiming to avoid a very costly (and possibly
unrealistic1) lockdown. At the end of March 2020, President Filipe Nyusi announced the
implementation of a state of emergency (Cruz et al., 2018).

It was initially in place for 120 days and after a short interim period got renewed for
another 30 days before new legislation addressing calamities took effect. The first 120 days were
coined by the attempt to prevent the disease, while the later stage of the emergency/ calamity
seems to recognize both the existence of the virus, and the need for envisaging a “new normal”
combined with a slow opening up of the economy (CoM, 2020b).

While the government has so far managed to avoid the extreme of implementing a
complete lockdown, the pandemic combined with the mitigation measures have come with a
heavy cost to the economy. To come better to grips with the impact and the policy dilemmas
involved, with a view to designing optimal policy responses, it is of the utmost importance to
improve our understanding of the impact of the pandemic and its consequences across the
economy (Cruz et al., 2018).

The main part of the growth and employment losses results from a demand reduction for
Mozambican products by the rest of the world. The most affected economic sectors are mining
and trade and accommodation. Furthermore, the results indicate that the production factors
capital and urban labour are more impacted than rural labour. Our simulation brings out
Mozambique's high dependence on a few export items (including tourism) (CoM, 2020b).

1.1 Objectives

1.2.1 General

 Analyze the impact of the COVID 19 pandemic (social, economical).

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1.2.2 Specifics

 Characterize COVID-19 in Mozambique;

 Describe the Socioeconomic impact of COVID-19 in Mozambique

1.3 Methodology

According to Furlanetti and Nogueira (2013), the methodology is the sequence of

procedures that are fundamental to describe how the research will be elaborated, because it will
answer how it is possible to reach the established goals. Therefore, methodology displays the
universe in which the research is carried out, the type, the method of analysis and which
instrument is used to collect data to carry out the research.

The bibliographical research was elaborated through books, internet, already published
articles, in a qualitative way, in which it is a non-statistical study. According to Vergara (2016),
qualitative data are coded, analyzed and exposed in a more structured way. Bibliographic
research will contribute to the understanding of possible consequences related to Nutrition,
specifically the composition of foods.

The material was collected from the teacher's didactic material databases, Google,
Google Scholar and SciELO. Journals with full texts in the area under study were selected.

1.4 Work structure

The present work is organized in chapters, with that for a better illustration follows
below the summary of the structure: Chapter I: Introduction containing the objectives, the
structure of the work and Methodology; Chapter II: Development; Chapter III: Conclusion;
Chapter IV: Bibliographical References (according to the APA rule).

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CHAPTER II: DEVELOPMENT

2.1 COVID-19 in Mozambique

In this section, we discuss the development of the COVID-19 pandemic and the
government response as well as the existing literature related to the economic impact of the
pandemic in Mozambique. The impact of COVID-19 began in Mozambique some time before the
virus itself arrived. While Europe, Asia and America already reported increasing numbers of
COVID-19 cases during the first quarter of 2020, Mozambique remained disease free and
initially implemented a series of countermeasures in an attempt to prevent the virus from
entering. The government also developed a four-stage plan to deploy mitigating measures
conditional on how the COVID-19 situation would evolve.

The measures became gradually stricter and more restrictive with each stage. Level 1
was put in place during the beginning of March. The implemented measures included the
screening of people entering the country from countries with high numbers of active cases,
quarantining travellers arriving from high risk countries, training of technical health teams to
detect and investigate suspicious cases, and the procurement of individual protection material
(CoM, 2020b).

Furthermore, state travel was banned as well as events with more than 300 participants
(CoM, 2020c). While these efforts managed to delay the pandemic, the first COVID-19 case was
reported on 22 March 2020 (CoM, 2020e). As a response, the government introduced further
measures to reduce the spread of COVID-19 such as the closure of all schools, the banning of
gatherings with more than 50 people and the suspension of issuing entry visas.

A Technical Committee was also created to analyse the trend of the pandemic (CoM,
2020h, 2020i). Furthermore, the government revised the state budget, prioritizing the health
sector and increasing the initial allocation to the sector by a further US$20 million to US$50
million (CoM, 2020g). The Bank of Mozambique (BdM) introduced a currency credit line of
over US$500 million to provide liquidity to the economy, relaxed customer credit restructuring

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conditions and reduced the level of mandatory foreign and national currency reserves (CoM,
2020f). H.E. Adriano Maleiane, Minister of Economics and Finances, also requested US$700
million from Mozambique's external partners to help mitigate the impact of COVID-19 (CoM,
2020g).

At the end of March, President Filipe Nyusi moved the alert to level 3 of the government
plan and declared for the first time in Mozambique's modern history that the country was in a
state of emergency, which started on 1 April (CoM, 2020j). The state of emergency was
announced in Decree 12/2020 and ratified by the Republic Assembly in Law 01/2020 on 31
March. The decree and the law include a set of measures to prevent the spread of COVID-19, and
some of the measures affect economic activities. These measures are of particular interest for our
analysis. They include, for example, quarantine regulations, suspension of entry visas,
cancellation of public and private events, closure of commercial and public establishments, and
mandatory social distancing.

Further articles of the Decree 12/2020 have indirect impacts on the economy. For
example, the closure of all educational institutions and the prohibition of religious and cultural
meetings reduce the need for transportation. On 9 April, IMF and the World Bank injected 21
billion meticais into the State Budget (CoM, 2020m). The government extended the exemption of
cooking oil and hygiene products from the 17% Value Added Tax (VAT) and discharged the
payment of late tax payments fees. Furthermore, the use of masks became mandatory in all public
and private passenger transport (CoM, 2020l). The government and INSS provided funds to small
and medium enterprises (SMEs) through the National Bank of Investment (BNI) in the amount of
1600 million meticais to support affected sectors by the state of emergency (CoM, 2020n), and
the electricity price was reduced by 10% as of June (CoM, 2020o).

Ever since the first implementation of the state of emergency on 1 April, some forms of
mitigation measures affecting the economy have been in place. The severity of the mitigation
measures depended on the development of the pandemic. As of 31 December 2020, Mozambique
had tested 271,947 people for COVID-19, and 18,642 (7%) were tested positive (Figure 1).
Among the positive cases, 18,326 were caused by local transmission, and the remaining 316
cases were imported from abroad. Mozambique had registered 166 deaths due to COVID-19.

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Among positive cases, 16,663 cases have recovered (Ministry of Health, 2020b). Figure 1 shows
the development of COVID-19 since March 2020.

Compared with neighboring countries, Mozambique was hit on a similar level except for
South Africa. In all categories of cases and deaths, it was South Africa that suffered by far the
most in southern Africa. Zambia, Zimbabwe and Malawi suffered from the pandemic on a similar
level as Mozambique and in terms of deaths per 1 million Mozambique suffered the least.

Within Mozambique, the spread of the virus was more severe in the south of the country.
The capital Maputo Cidade and Maputo Province accounted for 69% of the cases at the end of
2020. The remaining nine provinces only accounted for 31% of COVID-19 cases. In terms of
deaths, the picture is similar; however, this time, it is Maputo Cidade alone that carries the lion's
share. Some 80% of COVID-19 deaths in 2020 occurred in Maputo Cidade, while the remaining
20% are spread out rather evenly over the remaining 10 provinces (Ministry of Health, 2020b).

While the Government of Mozambique puts a lot of effort into testing and tracing
COVID-19 cases, it is very likely that the real number is significantly higher than officially
reported numbers. Rigorous testing is complicated in Mozambique for several reasons. The
country lacks infrastructure in rural areas, and the damages due to the recent cyclones Idai and
Kenneth continue as barriers in reaching the whole population (CoM, 2020p, 2020r). The
situation is exacerbated by the ongoing violent conflicts in the north and centre regions of the
country, which have displaced many people from their homes, making COVID-19 less of a
priority (RM, 2020; SAPO, 2020).

As in other countries, COVID-19 also highlights social problems leading to increased

trust issues between the population, the government and the police. Especially, reports about the
misuse of power by the police in implementing the restriction measures seem to accumulate
(Kyed, 2020). The government tries hard to avoid a full lockdown knowing very well that many
Mozambicans are too poor and cannot simply remain at home (Egger et al., 2020a). For the poor,
it has in many cases become a question between risking contracting COVID-19, penalization by
the police or starvation (Kyed, 2020).

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2.2 The Socioeconomic impact of COVID-19 in Mozambique

Mozambique reported its first COVID-19 case on 22nd March 2020. Since then, the
country has registered a total of 137,413 cases of confirmed COVID-19 infections and 1,690
official COVID-19 deaths (see Figure 1). Actual figures are likely to be significantly higher,
given Mozambique’s weak healthcare system, as well as its limited coverage beyond urban and
periurban parts of the country.

As elsewhere around world, the COVID-19 pandemic has had a very significant social
and economic impact in Mozambique. A number of concurrent demand and supply shocks hitting
Mozambique since the beginning of the pandemic account for this. These range from the sharp
slowdown experienced by the world economy and its impact in Mozambique, which has one of
the most open economies in Sub-Saharan African, to the adoption by government of stringent
social distancing and lockdown measures.

Altogether, these shocks have severely affected economic activity and disrupted the
lives and livelihoods of Mozambicans across the country. At the macroeconomic level,
Mozambique’s economy experienced in 2020 its first contraction in almost thirty years, largely
due to the pandemic, with GDP falling by 1.23 percent, according to the National Institute of
Statistics (see Figure 2).The hardest hit sectors were tourism, services, transport, manufacturing
and construction, all of which contracted in 2020.

Extractive industries, which in 2019 accounted for 7 percent of GDP, also experienced a
very sharp decline of 15.1 percent, although this was largely driven by industry-specific factors,
not by the impact of COVID-19. Figure 1: COVID-19 figures for Mozambique, daily new cases
and cumulative deaths.

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 On the demand side, this sharp slowdown in economic activity has also reflected in
Mozambique’s weak external sector performance, with the value of exports dropping by 15
percent in 2020, that of imports falling by 0.4 percent, while foreign direct investment in projects
other than mega-projects experiencing a very sharp decline, from US$ 875.3 million in 2019 to
only US$ 212.5 million in 2020. Aggregate consumption, on the other hand, fell by 7.2 percent in

2020, with reductions in both private and public consumption, of 2.1 and 19.3 percent,
respectively (INE, 2021). While the most recent macroeconomic figures released by INE point
towards a recovery of economic activity, Mozambique’s short to medium-term outlook remains
lukewarm, with the IMF projecting GDP to grow by only 2.1 percent in 2021 and by 4.7 percent
in 2022.

An important driver behind the sharp contraction in economic activity in Mozambique,

experienced since the beginning of the pandemic, has been the adoption of a range of
confinement and social distancing measures by government since the beginning of the pandemic
aimed at reducing the spread of COVID-19 in the country. Since the introduction of State of
Emergency legislation at the end of March 202015, the country has seen measures being
introduced to reduce business hours, limit and, in some cases, ban certain type of business
activities (e.g. gyms, the sale of alcohol, tents, etc.), reduce mobility and limitations on social

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gatherings, close down international air traffic, limit access to public spaces (e.g. beaches),
tighten controls on international freight and travel, or rotation schemes for both public and private
sector workers, among others.

In addition, the disruption of international and, especially, regional supply chains, also
played an important role. This is particularly the case for supply chains with neighboring South
Africa, a country which in 2019 accounted for 28.5 percent of Mozambique’s imports and on
which it relies for the supply of all type of goods, from spare parts, to equipment, construction
material, fresh food, or consumer goods.

Figure 2: Mozambique, GDP and GDP growth, 1995-2020.

Unsurprisingly, the impact of the COVID-19 pandemic has been heavily felt in both
businesses and families. At the household level, INE and the World Bank’s High Frequency
Survey16, which has been regularly monitoring the situation of urban households since early in

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the pandemic, helps illustrate the severe distress faced by families across the country. Results for
the first six rounds of the survey, covering the June to November 2020 period, point towards a
significant impact on food security, with around 60 percent of households surveyed consistently
reporting having missed a meal as a result of the crisis, and with up to 37 percent of families
having gone without eating for a whole day during the early stages of the pandemic. The survey
also suggests a considerable impact on (un)employment as a result of the crisis.

A nationally representative survey of 1,333 adults conducted in February 2021 as part of

the Partnership for Evidence-based Response to COVID-19 paints a similarly bleak picture.
Hence, 30 percent of respondents reported having difficulty getting medicines in the three months
prior to the survey, while 23 percent indicated they had skipped or delayed health care visits
during the six months prior to the survey as a result of the COVID-19 crisis. On the other hand,
61 percent of respondents claimed to have experienced income loss because of the pandemic and
54 percent reported missing meals. Key barriers to foods access reported in this survey included
reduced income, higher food prices, food markets being closed, mobility restrictions and food
supply shortages.

Against this backdrop, Barletta et al (2021) estimate that the COVID-19 crisis could
result in a drop in household consumption of between 7.1 and 14.4 percent in 2020, and an
increase in consumption-based poverty of between 4.3 and 9.9 percentage points, with up to 2
million additional people entering poverty. Accordingly, the impact of poverty is likely to have
been more intense in rural areas, as consumption levels there were already low prior to the
pandemic.

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CHAPTER III: CONCLUSION

This study offered an analysis of the macroeconomic impact of COVID-19 on the

performance of the Mozambican economy in 2020. We used a SAM-based multiplier analysis,
which allows us to estimate the total impact of COVID- 19 on the economy and distinguish
between the contributions of foreign and domestic shocks to changes in production and
employment across a range of economic sectors. Our estimates indicate that economic growth in
2020 was 3.6 percentage points lower because of COVID-19 than it would have been otherwise.

Accordingly, and given the overall contraction of the Mozambican economy of_1.3%, as
reported by INE (2021a), we estimate growth would have been 2.3% in 2020 without the
COVID-19 shock. Furthermore, the results show that employment was 1.9 percentage points
lower due to COVID-19 in 2020 and that the two sectors hit the hardest by the pandemic were the
mining and trade & accommodation sector.

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CHAPTER IV: BIBLIOGRAPHICAL REFERENCES

AfDB. (2021). “African economic outlook 2021. From debt resolution to growth: The road
ahead for Africa.” https://www. afdb.org/en/knowledge/publications/african-economic-outlook

Arndt, C., Davies, R., Gabriel, S., Harris, L., Makrelov, K., Robinson, S., Simbanegavi, W., Van
Seventer, D., & Anderson, L. (2020). “Impact of Covid-19 on the South African economy—An
initial analysis.” SA-TIED Work. Pap. 111. SA-TIED Working Paper 111. SA-TIED Working
Paper. https://sa-tied.wider.unu.edu/sites/default/files/pdf/SA-TIED-WP- 111.pdf

Barletta, G., Castigo, F., Egger, E. M., Keller, M., Salvucci, V., & Tarp, F. (2021). “The impact
of COVID-19 on consumption poverty in Mozambique.” 2021/94. WIDER Working Paper.
https://doi.org/10.35188/UNU-WIDER/2021/034-4

BdM. (2021). “Balança de Pagamentos.” http://www.bancomoc.mz/fm_pgLink.aspx?id=222

Bulmer-Thomas, V. (1982). Input-output analysis in developing countries: Sources, methods and

applications. John Wiley & Sons, Australia Limited.

CoM. (2020a). “Mozambican miners return to South Africa as COVID-19 blockade lifts.” Club of
Mozambique, 1–4. https:// clubofmozambique.com/news/mozambican-miners-return-to-south-
africa-as-covid-19-blockade-lifts-166332/

CoM. (2020b, March 12). “MISAU Communique: Government reinforces Covid-19 prevention
measures—Unabridged.” Club of Mozambique.

CoM. (2020c, March 14). “Mozambique reinforces COVID-19 prevention measures.” Club of
Mozambique. https:// clubofmozambique.com/news/just-in-mozambique-reinforces-covid-19-
prevention-measures-155170/

CoM. (2020d, March 21). “Exclusive: Coronavirus, gas slump put brakes on Exxon's giant
Mozambique LNG plan.” Club of Mozambique. https://clubofmozambique.com/news/exclusive-
coronavirus-gas-slump-put-brakes-on-exxons-giantmozambique- lng-plan-reuters-155825/

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CoM. (2020e, March 22). “Mozambique reports first case of Covid-19.” Club of Mozambique.
https://clubofmozambique. com/news/mozambique-reports-first-case-of-covid-19-155872/

CoM. (2020f, March 23). “Covid-19: Bank of Mozambique announces measures to support
companies and families.” Club of Mozambique. https://clubofmozambique.com/news/covid-19-
bank-of-mozambique-announces-measures-to-supportcompanies- and-families-155956/

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