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Country analysis > Mozambique Last update: 2020-11-27  

Beating the odds: Sustaining inclusion in Mozambique's growing economy

Louise Fox et al.

The World Bank

January 2008

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Life for most Mozambicans improved dramatically in the decade following the end of the civil war and the first free elections in 1994. Household incomes and asset holdings increased, as did access to and the quality of publicly provided services. Despite this improvement, many Mozambican households are still among the poorest in the world. More than half the population lives in poverty, with persistent gaps between farmers and city dwellers, women and men, and poor and rich. To extend the transformation that began in the mid-1990s, policymakers can benefit from taking stock of past successes while understanding more clearly the gaps and shortcomings. They need to find new ways to accelerate improvements in the living standards of all Mozambicans.

As specified in the government’s five-year plan (PARPA II), one goal is to pursue propoor growth—by promoting agriculture and the private sector (box 1). A second is to build human capital—by improving access to basic public services, especially for the poor. A third is to improve governance and accountability—by getting government closer to its citizens. To do all this, the government will need to increase the value for money in its spending on public services. It will also need to target services on the rural poor and enlist poor communities in identifying needs and co-managing the delivery of those services.

To promote agriculture and the private sector, the government should improve research and extension for commercial farmers, large and small, and for subsistence farmers, especially women. It should build infrastructure to increase farmers’ access to markets and their ability to tap new technology. And it should strengthen producer associations to increase the benefits of linking farmers to domestic food supply chains and to high-value, export-oriented supply chains. So that the private sector can create jobs and boost incomes in urban areas, the government should encourage labor-intensive manufacturing exports rather than focus only on high-profile megaprojects, which do little for employment and broad-based income growth. It should also develop new policies and programs to reduce risk and increase incomes for household businesses in the informal sector—businesses that will continue to be important for sustaining growth and reducing poverty.

Box 1 - The government’s poverty reduction strategies: PARPA I and PARPA II
The detailed poverty reduction strategy (PARPA—Plano de Accao para a Reducao da Pobreza Absolouta) articulates the Mozambican Government’s strategic vision for poverty reduction by promoting increased productivity and by improving the capacities and opportunities for all Mozambicans. The first PARPA was prepared in December 1999, and after public discussion, it was revised and presented to donors as the basis for donor support in 2001-05. PARPA I elaborated priority policies and programs that would foster human development and broad-based economic growth. Emphasizing the link between sustained growth and poverty reduction, the strategy incorporated policies and reforms to stimulate growth, identifying physical and human capital and rising productivity as fundamental macroeconomic determinants of growth. The design of PARPA II was completed in 2006 and is now being implemented in 2006-10. It maintained this strategic focus, organized around three main pillars: governance, human capital, and economic development. The vision common to both PARPAs includes consolidating national unity, developing each citizen’s human potential, creating a working institutional system, and increasing the ability to create national wealth.

To build the human capital of Mozambicans, the government should focus on the basics of education, health, water, and extension—greatly expanding access in rural areas and developing new models to improve the quality of services. This will require increasing public spending on social and economic services, building on the early successes in education, and getting more value for money from that spending. Part of this will involve shifting resources within ministries to focus on the basics and across sectors to reach the underserved. Part will involve public-private partnerships for decentralized service provision and having communities identify needs and help deliver services to households. And part will involve good tracking systems to link program outputs to targets and outcomes, using frequent high-quality household surveys and other monitoring and evaluation instruments. Only by establishing and refining such systems will it be possible to know where resources are going and what results they are producing.

To improve governance and accountability, the government should empower communities as local agents of change. It should make decentralization work for the poor by devolving real power to local communities so that they can advocate for more responsive public services, influence service delivery mechanisms, and hold local service providers accountable for performance. It should also increase access to justice for the poor by opening opportunities to engage with public institutions and ensuring that the judicial system increases its responsiveness to all Mozambicans. And it should make poor people’s land rights real by increasing awareness of citizen rights to land and by strengthening the consultations for community land. All this demands reducing the red tape and petty corruption in the public administration.

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