Mozambique

In the three years leading to 2008, Mozambique enjoyed strong economic growth (real GDP growth averaged 7.6% per year), receding inflation, and debt sustainability. Economic policy reforms together with political stability and substantial donor support have contributed to macroeconomic stability, socio-economic transformation, and significant poverty reduction.

Important progress to foster accountability and transparency has also been made in the regulatory framework (new tax and labor code) and in key public financial management reforms. However, significant challenges still remain. Although economic growth has been impressive, the number of people in poverty still remains very high. Moreover, the sustainability of growth will require substantial improvements in infrastructure, in the business environment, as well as further reforms, particularly implementation of concrete measures in governance.

AfDB & Mozambique: Building together a better Africa


Projects portfolio

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Reference Project Status
P-MZ-AAA-002 COFAMOSA Sugar Cane Project
Sector: Agriculture & Agro-industries
PipelinePIPE
P-MZ-DB0-009 Trunk Road Rehabilitation Project
Sector: Transport
PipelinePIPE
P-MZ-E00-004 Rural Water Supply and Sanitation Program
Sector: Water Supply & Sanitation
PipelinePIPE
P-MZ-IE0-003 Grassroots Community Capacity Building
Sector: Human and Social Development, Economic & Financial Governance
PipelinePIPE
P-MZ-AAC-002 Massingir Dam Emergency Rehabilitation Project
Sector: Agriculture & Agro-industries
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Development Policy

Mozambique’s medium-term poverty reduction strategy aims to reduce poverty from 54% of the population in 2003 to 45% in 2009, and to promote human well being and economic development through rapid, inclusive and broad-based growth, based on three pillars:

  • Good governance
  • Human capital
  • Economic development

The Mozambican government recognizes the key role that the private sector plays in fostering growth and reducing poverty. During the next four years, the GoM envisages carrying out the second “wave” of institutional reforms and providing the country with suitable economic and social infrastructure in order to address the main bottlenecks to private sector development. Overall, it is expected that the economy could grow at an annual real rate of 5 per cent over the period 2006-09. If these growth targets are realized and the inequality indexes remain at historical levels, the poverty per capita will decrease to 31 percent by 2015. Such progress would, hopefully, allow the Millennium Development Goal for poverty reduction to be met.

Mozambique Regional Map

Bank Group Country Strategy

The proposed Bank Group assistance strategy to Mozambique aims to:

  • Scale up financial resources through budget support and project financing in support of good governance and increased economic infrastructure;
  • Improve the performance of the current portfolio;
  • Assist in capacity building;
  • Increase policy dialogue, underpinned by economic and sector analytical work; and enhance coordination and harmonization with development partners.

The preparation of the Bank Group’s Country Strategy Paper (CSP) for Mozambique  followed discussions with government, development partners and civil society, and incorporated lessons learned from previous CSPs, portfolio reviews, and projects completion reports. The main selection criteria for the intervention
included:

  • GoM agenda and PARPA pillars and priorities;
  • ADB vision in promoting Good Governance, Regional Integration and Private Sector Development;
  • African Development Fund (ADF-X) policy guidelines and the results based and increased selectivity approach;
  • Synergies from previous interventions;
  • ADB experience or specific specialization agreed among donors (e.g. African
  • Water Facility, Rural Water Supply and Sanitation Initiative and NEPAD)
  • Sectors’ implementation track record;
  • Sectors’ ability to increase project’s average size; and
  • Sectors’ ability to reinforce donor harmonization and to comply with Paris Declaration targets.

Based on the above criteria Governance and Infrastructure emerged as the most suitable pillars for Bank intervention. The CSP also aims to strengthen donor harmonization.

The Bank Group has, since operations began in Mozambique in 1977, approved fifty three projects, six policy-based programs and eleven studies. Total commitments stand at UA 914 million (April 2006). In terms of the size of the portfolio within the Bank, Mozambique is the fifth most supported country with 4.8 per cent of the Bank’s (ADF) total portfolio. According to the recently finalized Country Portfolio Review, in order to improve portfolio’s performance, the following key efforts need to be undertaken:

  • Strengthen capacity building;
  • Increase the average size of operations in order to reduce transaction costs;
  • Rethink current project designs in terms of quantity of loan conditions, usage of Project Implementation Units (PiUs) and counterpart fund requirements
  • Increase cooperation, harmonization and coordination with donors;
  • Ensure a minimum task manager turnover rate;
  • Increase the number of Bank staff fluent in Portuguese; and
  • Review more systematically the portfolio.

Contacts

Mr. Frank Black      
African Development Bank Group
Temporary Relocation Agency (TRA)
P.O.Box 323-1002, Tunis-Belvédère, Tunisia
Tel: (216) 7133-3511/7110-2042
Fax: (216) 7110-3743


Mozambique field office

African Development Bank Group
Mozambique Regional Office (MZFO)
3rd floor, JAT 4 Building
Zedequias Maganhela, 267
Maputo, Mozambique

Tel: (258) 21326409 Ext. 6430-6499
Fax (258) 21315600

Contact
Ms. Alice Hamer, Resident Representative








Key Facts

Capital: Maputo
Area: 801,590 sq km
Total Population 2008: 21.8 Million
Urban Population 2008: 37.01%
Female Population 2008: 51.38%
GDP 2008: US$ 14.5 Billion
GNI Per Capita 2007: US$ 320
Inflation Rate 2008: 7.10%
Crude Birth Rate (per 1000) 2008: 38.73%
Human Development Index (scale 0 to 1) 2006: 0.366
Membership Date: 04/06/1976
Cumulative Approvals (1967-2008): UA 1.1 Billion
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