The ruling party, Frente de Libertação de Moçambique (Frelimo), is set to remain the dominant figure in the political and economic landscape throughout the forecast period, following its crushing but flawed victory in the legislative and presidential elections held in October 2009. After more than five years in power, the president, Armando Guebuza, has consolidated his influence, wielding near-total control over his party, and can rely on the support of the security services. Mr Guebuza's micromanagement and the centralisation of power in the presidency have weakened the tradition of debate inside Frelimo. As a result, there are grave concerns that this is undermining the effectiveness of government decision-making and management.

Bloody riots that erupted in the capital, Maputo, in September 2010 over the cost of living pose a greater threat to Frelimo's hegemony than do the enfeebled opposition parties. The unrest was brutally repressed by the security services, resulting in several deaths, before the government was forced to capitulate and reinstate some price controls. Although the restoration of food subsidies and cuts to planned price increases for water and electricity are likely to assuage popular anger in the short term, widespread subsidies are fiscally unsustainable. Moreover, the government's acquiescence may set a precedent for social unrest to win concessions. Consequently, the risk of further such instability in 2011-12 is considerable. In addition to price rises, other triggers of future unrest include power cuts, a localised rise in unemployment or a delayed official response to a disease outbreak or flooding. Overall, the Economist Intelligence Unit expects political stability to deteriorate slightly in the forecast period.