Mozambique - Services

Accounting for approximately 48 percent of GDP, the service, or tertiary sector, is the most valuable area of economic activity in the Mozambican economy. Approximately 13 percent of the labor force is engaged in the service sector (est. 1998), though this figure does not take into consideration the many people that work in the informal sector . The largest contributor to the service sector is business, which constituted 19.5 percent of GDP alone in 1999. The business class consists of a small elite, whose main activities are trading and distribution. Other important service activities include finance, tourism, transport, communication, and retail . The latter, which includes a small number of restaurants and stores in the urban centers, is dominated by small-scale street vendors, many of whom form part of the informal sector. Informal sector activities include carpentry, motor vehicle repair, tailoring, hawking , and selling various fruits, vegetables, and other commodities. Recent studies, such as those conducted by researchers of the Centro de Estudos Africanos of the University Eduardo Mondlane in Mozambique, indicate that informal activity has increased substantially as a result of SAP-related cuts to the social sector, unemployment and rising food prices. Unfortunately, the burden caused by these developments has been shouldered unequally by women, who have taken the responsibility of ensuring the survival of the family. In 1994, as much as 75 percent of all women in Maputo were forced to participate in the informal sector in order to earn their chief incomes. Such women make as little as $0.20 a day, plus food.

As a result of the destruction caused by the civil war, there is a massive lack of shops and service activities in the rural areas. Moreover, the rebuilding of the retail sector in the rural areas has been slowed by a banking sector that is reluctant to provide capital to prospective entrepreneurs with very few assets. Though there are many international donor agencies funding rural service-related income-generating projects, the pace of reconstruction remains protracted (delayed).

On the whole, tourism is a relatively marginal component of the Mozambican economy. Indeed, restaurants and hotels accounted for a meager 1.2 percent of GDP in 1999—a slight increase from 1995, when they constituted 0.7 percent of GDP. At the same time, however, there is a strong potential for the development of the tourism sector, given the country's long coastline with superb beaches, the existence of several attractions of historical interest, and the great diversity of flora and wildlife.