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 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. Moreover, there are reports that Mr Guebuza's high-handed style and perceived cronyism are alienating many within Frelimo. A split within the ruling party is therefore conceivable, possibly pitting the new generation of meritocrats against the old guard of civil war veterans. The risk of this is set to increase as the presidential election in 2014 approaches.

Bloody riots that erupted in September 2010 in the capital, Maputo, 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. The government's acquiescence may set a precedent for social unrest to win concessions. New schemes to supply subsidised fuel and food to the most vulnerable groups should assuage popular anger in the short term. However, the imminent withdrawal of general price subsidies may provoke the ire of groups that miss out. Moreover, even the new scheme is fiscally unsustainable, particularly given rapid commodity price rises on global markets. Consequently, the risk of further such instability in 2011-12 is considerable. In addition to price rises, other triggers for future unrest could 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.