Coal-based linkages and development in Mozambique: a political economy perspective

Abstract

Mozambique is currently moving from an aid dependent country to mineral dependent given the mining boom happening there thanks to the discoveries of huge reserves of coal, mineral sands and natural gas. The country is set to become one of the world's twenty top producers of natural gas and top ten largest producers of coal. This research is a case study focusing on coal-based linkages that can foster broad economic growth and development in Mozambique. Using a political economy perspective, the research investigates the question about how the country can optimise the mining boom through coalbased economic linkages to foster broader socio-economic development. The research finds that under the combination of its current fiscal and mineral regime with infrastructure problems plus the inexistence of a coal-based linkage policy, Mozambique will get negligible benefit from the exploitation of its finite coal resources. A major overhaul of these regimes is needed for it to make use of its coal to catalyse wider growth and development, before it is left with little other than large holes in the ground.