ABSTRACT
Complete transformation of a seriously distorted colonial economy was what the Mozambican liberation movement ‘Frente de Libertação de Moçambique’ (Frelimo) set out to achieve after independence in 1975. However, the command-type economic policies adopted by Frelimo proved unsuccessful. A bloody war and a range of deep-seated structural problems inherited from the colonial era also helped to pave the way to economic collapse. As a result, a fairly typical stabilisation and structural adjustment programme, the Economic Rehabilitation Programme (ERP), was launched in 1987 with the assistance of the International Monetary Fund (IMF) and the World Bank. Subsequently, focus in the economic reform effort in Mozambique has so far been on: (1) macroeconomic attempts to stabilise the economy, (2) liberalisation, through reductions in centralised administrative controls and increased use of indirect price and credit policies, rather than direct administrative intervention in the allocation of resource and (3) a process of privatisation.
