This study has been prepared within the two UNU-WIDER projects on Inequality and governance in unstable democracies-the mediating role of trust and on Inclusive growth in Mozambique-scaling-up research and capacity.

This study has been prepared within the project on Inclusive growth in Mozambique-scaling-up research and capacity implemented in collaboration between UNU-WIDER, University of Copenhagen, University Eduardo Mondlane, and the Mozambican Ministry of Economics and Finance. The project is financed through specific programme contributions by the governments of Denmark, Finland, and Norway.

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We would also like to members of the Centre for Applied Social Sciences, University of Zimbabwe, for supporting the fieldwork training and data entry and to member of the African Centre for Migration and Society for comments on early presentations of our preliminary. Special thanks to Mthente Consulting, Cape Town and in particular to Kudakwashe Matongo, for coordinating the preparation of survey instruments, facilitation of training and for overseeing data verification. The UK Department for International Development (DFID) supports policies, programmes and projects to promote poverty reduction globally. DFID provided funds for this study as part of that goal but the views and opinions expressed are those of the author(s) alone.

This study assesses the impact of COVID‐19 on household consumption poverty. To predict changes in income and the associated effects on poverty, we rely on existing estimated macroeconomic impacts. We assume two main impact channels: direct income/wage and employment losses. Our simulations suggest that consumption decreased by 7.1%–14.4% and that poverty increased by 4.3–9.9 percentage points in 2020. This points to a reversal of the positive poverty reduction trend observed in previous years. Poverty most certainly increased in the pre‐COVID period due to other shocks, so Mozambique finds itself in a deepening struggle against poverty.