Just how much of an African success story is Mozambique?

I've spent the past few days travelling around the country, thinking about that question.

On the face of it, the country deserves all the praise it gets. The economy has grown at around eight per cent per annum for 15 years now.

I lived in Mozambique in the early 1990s, and I can see the sometimes dramatic differences between then and now.

Then, the country was on its knees, and many provincial towns were little more than rows of ruined buildings, their populations kept alive by foreign aid.

Maputo was a gently decaying but charming capital. Now, it's a brasher, noisier place, with more cars, lots of construction, and many new businesses, (and, inevitably, perhaps a little less charm).

And yet, clearly, not everything is going right.

At the beginning of this month, the government raised the price of bread, water and electricity.

The public reaction was instantaneous, furious and overwhelming.

Widespread riots and looting could only be suppressed with brutal force. When the smoke cleared after a couple of days, about a dozen people had been killed by the police who apparently used live ammunition, and hundreds were injured ... (take a look at this You Tube video which shows somebody shooting from a building belonging to the ruling Frelimo party).

In Maputo, I spoke to Jose Luis Cabaco, an academic and former government minister.

Cabaco was a prominent Frelimo member for many years, but he speaks candidly about the state of Mozambique today.

He agrees that despite so many years of growth, an enormous part of the population lives on the "extreme edge of survival" where even a tiny fluctuation "of just a metical" in the prices of daily essentials pushes families into disaster.

He also says that Western donors have had a vested interest in talking up Mozambique's success, precisely because the country is so often praised for making a model transition from a socialist to market economy.

Boom town

Tete, in northwestern Mozambique, is a good place to see how the country is changing.

I remember it as a dusty back-water, a stopover for truckers travelling to and from Malawi and Zimbabwe.

Today, it is a boom town, with the few hotels booked up months in advance, and traffic clogging the narrow bridge over the River Zambezi.

The reason is coal mining specialists say the reserves around Tete are the most valuable to have been discovered anywhere in the world for 50 years.

Brazilian, Indian and Australian companies have been given concessions, and economists in Maputo say that once production begins, Mozambique's (admittedly small) GDP could grow by an astonishing 30 per cent.

There is a lot of talk these days about a new scramble for Africa, driven by India and China's demand for raw materials.

Well, Tete is as good a place as any to see that scramble. The railway to the port of Beira, ruined in the war, is being repaired by an Indian company, and there are thousands of new jobs in mining and construction. 

But a prominent Mozambican economist, Carlos Nuno Castel-Branco, sounds a note of caution.

The jobs will dry up, he argues, once the initial phase of construction is over.

Besides, the coal reserves are polluting and perhaps of variable quality. More ominously, he says that some of the deals signed between the Mozambican government and foreign companies have been opaque and somewhat secretive.

The implication is that Mozambique is in danger of repeating the mistakes of other African countries whose economies are based on extractive industries, where corruption has enriched a small elite, but brought few benefits to the majority.

Much will depend on the quality of governance in Mozambique.

Here's an Economist article on the riots and their aftermath.

Frelimo’s grip on power is stronger than ever the opposition Renamo party (the former rebel movement), is weak and increasingly irrelevant.

Once upon a time, Frelimo was known as a disciplined, idealistic movement.

But much of the old guard has now faded away, and a younger generation has fewer compunctions about getting rich.

I sense that Mozambique is at a crossroads there is the real possibility of a much more prosperous future, with the benefits shared by many.

But there is also the danger of growing frustration and inequality. Now, more than ever, Mozambique's leaders have to be careful not to lose touch with the vast majority, for whom life is still such a difficult struggle.