(Adds death toll given by govt)
MAPUTO, Feb 16 (Reuters) - Tropical storm Dineo has killed seven people in Mozambique since it hit the eastern coast on Wednesday, the government's disaster centre said on Thursday.
The storm, has brought heavy rain and winds of up to 160 km an hour (100 mph), raising the risk of flooding and crop damage in the impoverished southern African country.
Mozambique's emergency operational centre said in a statement about 130,000 people living in the Inhambane province, 500 km north of the capital Maputo, had been affected by the storm. About 20,000 homes were destroyed by heavy rains and fierce winds.
One of the world's poorest countries and also in the throes of a financial crisis, Mozambique is prone to flooding. It is especially vulnerable after a major drought last year as soils degraded or hardened by dry spells do not easily absorb water.
"The system will pose a great risk for the next 36 to 48 hours, particularly in terms of further exceptionally heavy rainfall and resultant flooding," the South African Weather Service said in a statement.
The Mozambican government said the situation was less severe in Gaza, which has the popular resort town of Xai-Xai as its capital and is near the border with South Africa.
Government said however that it feared flooding in the area due to the torrential downpour.
Experts said the storm should weaken as it moves over land, but that it could still bring heavy rainfall.
Damage could be inflicted on Mozambique's multi-million dollar macadamia nut industry. Subsistence maize farmers recovering from last year's El Nino-triggered drought are also at risk.
Floods in 2000 and 2001 killed hundreds of people in Mozambique and two cyclones in January 2012 killed 26 and displaced more than 125,000, according to official data. (Writing by Ed Stoddard and Mfuneko Toyana; Editing by Robin Pomeroy and Angus MacSwan)