Remarkable progress was achieved in Mozambique, over the last 20 years in
promoting macroeconomic growth and stability. Nonetheless, poverty rates remain high and labour market activity is dominated by smallholder farming. We use recent household survey data to dig into these trends and provide an updated analysis of transformation in the labour
market. We find that movement of labour out of agriculture has contributed to aggregate growth. But, this trend is slowing and is leading to a saturation of the services sector. Moreover, productivity growth is weakening within more labour-intensive sectors. We conclude by reflecting on policy challenges, including demographic trends.
