5 Meticais – Mozambique

Following independence in 1975, Mozambique inherited the Portuguese colonial currency, the escudo, but swiftly moved to establish monetary sovereignty as a cornerstone of its new socialist identity. In 1980, the country introduced its own currency, the metical (MZM), replacing the escudo at par. This was a deeply symbolic act, named after a historic unit of gold weight used in pre-colonial trade, representing a deliberate break from the colonial past and an assertion of national economic control under the ruling FRELIMO government.

However, the economic backdrop for this launch was severely challenging. The country was engulfed in a devastating civil war (1977-1992) that crippled infrastructure, agricultural production, and trade. Simultaneously, the government's commitment to central planning and state-run industries, combined with the severe disruption of the war, led to widespread shortages, declining productivity, and a growing budget deficit. Consequently, while the metical was introduced at parity with the old escudo, it entered a reality of a command economy with fixed prices and exchange rates that bore little relation to its actual market value or the country's economic output.

Thus, in 1980, the Mozambican metical began its existence in a state of profound fragility. The official economy was characterized by scarcity and controlled prices, while a burgeoning black market for goods and foreign currency (especially the South African rand) quickly emerged to fill the gaps. This dual-system undermined the new currency's stability from the outset, planting the seeds for the severe devaluations and hyperinflation that would follow in the late 1980s, necessitating eventual economic liberalization.