Huge drop in spending showsMozambicans poorer than adecade ago, says new IOF survey

A dramatic drop in household spending in the past five years is shown in the 2019-20

Family Expenditure Survey (Inquérito sobre Orçamento Familiar, IOF). Median spending dropped 17% in five years, making most people poorer than they were a decade ago. Urban spending fell 24% while rural spending dropped 13%. Gaza (down 42%), Maputo city (down 38%) and Cabo Delgado (also down 38%) were hit hardest. All spending, including food, was sharply reduced.

The IOF is a very detailed structured survey conducted every five years by the National Statistics Institute (Instituto Nacional de Estatística, INE) and the 2019-20 survey was published on 24 September. Comparing with the IOF's of 2014-15 and 2008-09, shows that there after six years of significant growth in household spending (and increased inequality) up to the 2014-15 survey, Mozambicans were hit hard in the next five years to 2019-20.

The fall in the past five years is so large that it wiped out all the gains of the previous six years. Median spending per month per person was $27.60 in 2019-20, lower than the $28.80 of the 2008-09 IOF.

The survey shows that 75% of Mozambican spend less than $1 per day, more than 90% are under the World bank international poverty line of $1.90 per day. The survey also shows huge inequality, noting that the poorest "50% of the population accounts for 14.7% of the total expenditure. The share of the poorest 10% of the population is only 0.8% of total national expenditure, and the richest 10% of the population account for 43.1% of total expenditure."

Looking separately at urban and rural and comparing 2019-20 to 2014-15 shows the scale of the drop. In constant 2019/20 Meticais, urban residents cut their spending by one quarter in those five years, and urban spending is more than double rural spending. (Constant meticais means adjusting 2014-15 according to the consumer prices index.) But if one looks at the US dollar value, the huge devaluation in 2016 due to the secret debt crisis had a major effect. In $ terms, rural spending fell by one-third, but urban spending fell by 41% - from $2.36 per person per day to $1.37.

The changes by province are also notable, with major drops of spending in the south and Cabo Delgado and Nampula, but little change in the centre - Manica, Sofala, Tete and Zambezia.


Statistics are political

The IOFs and every ten year censuses are done by the National Statistics Institute (Instituto Nacional de Estatística, INE) and are very well done and trusted. However, what is done with those statistics can be highly political. In 2019 the government justified inflating the voters role in Gaza by more than 200,000 voters by saying the national census undercounted huge number of voting age adults. The respected heads of the INE and of the census spoke out to defend the census and were both dismissed.

The INE produces the IOF but its parent Ministry of Economy and Finance (MEF) later produces a report on the impact on poverty. In both its reports on the 2002-03 and 2014-15 IOFs, MEF "adjusted" the poverty line to show a significant decrease in poverty. If this is done with the 2019-20 IOF, INE officials will remember the warning to stay quiet.


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