In 1990, Mozambique was estimated to be the world's poorest nation; since then, the country has been in transition toward a more market-oriented economy and the prospect of raising its standard of living. Mozambique remains an overwhelmingly agricultural and poor country, however, with the majority of its workers engaged in traditional subsistence cultivation of such crops as cassava, corn, coconuts, potatoes, and sunflowers. The principal cash crops are cotton, cashews, sugarcane, tea, sisal, citrus, and tropical fruits. Cattle and goats are raised, but their numbers are kept low by the tsetse fly. There are forestry and fishing industries, including prawns. The country's mineral wealth has not been determined fully; however, titanium, zircon, petroleum, and natural-gas deposits have been developed by foreign investors and are now exported. There are also significant coal deposits, which are being developed more extensively, as well as hydropower. Many citizens work abroad in South African mines.

Mozambique's industrial sector includes the processing of raw materials (mostly food, cotton, and tobacco) and the production of chemical fertilizer, aluminum, petroleum products, textiles, and glass. Electricity from the giant Cahora Bassa hydroelectric project (located on the Zambezi near Tete) is exported to South Africa. A smaller hydroelectric plant is situated at Chicamba Real (near Beira) on the Revùe River. The economy is also reliant on foreign aid.

Mozambique has a substantial trade imbalance, although export earnings have increased in recent years. The principal imports are machinery and equipment, motor vehicles, fuel, chemicals, metal products, food, and textiles; chief exports are aluminum, prawns, cashews, cotton, sugar, citrus, timber, and bulk electricity. The Netherlands and South Africa are the country's main trading partners. Mozambique also derives income from handling foreign trade for nearby countries; goods are shipped on rail lines that terminate at the ports of Maputo, Nacala, Lumbo (near Moçambique), and Beira. A toll road that opened in 1998 carries goods from South Africa's industrial north to Maputo.

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