Mozambique - Poverty Assessment - Poverty Reduction Setback in Times of Compounding Shocks - June 2023

Jul 19, 2026

The report analyzes how compounding shocks have reversed poverty reduction progress in Mozambique, with a focus on COVID-19 and the broader 2015–2020 period. It connects lower growth and a tougher economic context to higher poverty levels, highlights geographic disparities, and explains how multiple deprivations constrain household welfare and economic opportunities. It also examines the link between economic growth and poverty elasticity, evaluates inequality trends during the pandemic, and profiles labor market outcomes, including unemployment, underemployment, and child labor.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages144

Reading Time6 h 3 min

Executive Summary

Introduction

Chapter 1: Back-to-back Shocks Have Erased Some of the Gains in Poverty Reduction

Turbulent Years in the Recent Past Have Put Mozambique on a Lower Growth Trajectory

A More Challenging Economic Context Translated Into Higher Poverty

The Uneven Distribution of Poverty Across the Mozambican Geography

Poverty Changes Were Driven by Compounding Shocks

In Addition to Low Incomes, Household Welfare and Economic Opportunities Are Constrained by Deprivations in Multiple Dimensions

The Relationship Between Economic Growth and Poverty

Chapter 2: Inequality Remains High but Fell with the Pandemic

Income Status and Location Largely Explain Which Household Benefitted from the Low Levels of Growth

As a Shock That Fell More Heavily on Urban Areas, COVID-19 Improved Overall Inequality

Growth, Inequality and Poverty Are Intertwined

Geography Matters for Poverty and Equity Outcomes

An Uneven Playing Field for Human Opportunities and Economic Capabilities

Chapter 3: Profiling the Labor Market: Low Economic Transformation, Low Availability of Productive Jobs

Labor Force Participation

Unemployment

Type of Employment

Underemployment

Child Labor

What Type of Labor Does the Market Demand?

Chapter 4: The Fiscal System and Private Transfers Influence Poverty and Equity – In Good and Bad Ways

Low-Income Households Are Not Necessarily Better-Off After the Net Effects of Paying Taxes and Receiving Public Transfers Are Considered

Public Disclosure Authorized Public Disclosure Authorized “Poverty Reduction Setback in Times of Compounding Shocks” Mozambique —Poverty Assessment— June 2023 Poverty and Equity Global Practice Africa Region Table of Contents EXECUTIVE SUMMARY ........................................................................................................................................... 8 INTRODUCTION ................................................................................................................................................... 11 CHAPTER 1: BACK-TO-BACK SHOCKS HAVE ERASED SOME OF THE GAINS IN POVERTY REDUCTION .................... 13 1.1 TURBULENT YEARS IN THE RECENT PAST HAVE PUT MOZAMBIQUE ON A LOWER GROWTH TRAJECTORY ....................................13 1.2 A MORE CHALLENGING ECONOMIC CONTEXT TRANSLATED INTO HIGHER POVERTY................................................................16 1.3 THE UNEVEN DISTRIBUTION OF POVERTY ACROSS THE MOZAMBICAN GEOGRAPHY ...............................................................19 1.4 POVERTY CHANGES WERE DRIVEN BY COMPOUNDING SHOCKS .........................................................................................25 Documenting the burden of COVID-19 on poverty ............................................................................................. 25 Other shocks during the 2015-20 period are responsible for half of the overall poverty increase ....................27 1.5 IN ADDITION TO LOW INCOMES, HOUSEHOLD WELFARE AND ECONOMIC OPPORTUNITIES ARE CONSTRAINED BY DEPRIVATIONS IN MULTIPLE DIMENSIONS..................................................................................................................................................31 Human capital accumulation ............................................................................................................................. 34 Education ........................................................................................................................................................... 34 Health and nutrition ...........................................................................................................................................37 Access to services (water, sanitation and electricity) ......................................................................................... 39 Housing conditions and assets ........................................................................................................................... 40 1.6 THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND POVERTY ...................................................................................41 Poverty elasticity and passthrough rates in Mozambique .................................................................................41 Poverty outlook ..................................................................................................................................................43 CHAPTER 2. INEQUALITY REMAINS HIGH BUT FELL WITH THE PANDEMIC ........................................................... 46 2.1 INCOME STATUS AND LOCATION LARGELY EXPLAIN WHICH HOUSEHOLD BENEFITTED FROM THE LOW LEVELS OF GROWTH ............46 2.2 AS A SHOCK THAT FELL MORE HEAVILY ON URBAN AREAS, COVID-19 IMPROVED OVERALL INEQUALITY ...................................49 2.3 GROWTH, INEQUALITY AND POVERTY ARE INTERTWINED ................................................................................................51 2.4: GEOGRAPHY MATTERS FOR POVERTY AND EQUITY OUTCOMES .......................................................................................53 2.5 AN UNEVEN PLAYING FIELD FOR HUMAN OPPORTUNITIES AND ECONOMIC CAPABILITIES ........................................................63 Intergenerational mobility .......................................................................................................................

FAQs

Which shocks are highlighted as drivers of higher poverty in Mozambique?

The report highlights COVID-19 and other shocks during the 2015–20 period as key drivers of overall poverty increases. It frames poverty changes as results of compounding shocks that accumulated over time.

How does the report explain differences in poverty across Mozambique’s geography?

It emphasizes the uneven distribution of poverty across Mozambican geography. It links these spatial differences to how shocks and constraints affect regions differently.

What labor market problems are examined in the profiling section?

The report reviews labor force participation, unemployment, type of employment, underemployment, and child labor. It also assesses what kinds of labor the market demands.

Jul 19, 2026

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