On the choice of appropriate development strategy: Insights gained from CGE modelling of the Mozambican economy

Abstract

This paper uses a 1997 Computable General Equilibrium (CGE) model to analyse three strategies which Mozambique can pursue in furthering a sustainable development process. They include (i) agriculture-first, (ii) agricultural-development-led-industrialisation (ADLI) and (iii) a primary-sector export-oriented strategy. ADLI dominates the two other approaches and the distributional implications of ADLI are attractive. We also find that there are important synergy effects to be reaped from balanced agricultural and agro-industrial development, and the primary-sector export-oriented strategy represents a potentially significant set of complementary policies. Finally, the importance of taking structural differences among household groupings into account when formulating comprehensive pro-equity and anti-poverty development strategies is prominent. © Centre for the Study of African Economies 2004; all rights reserved.