Interview with AfDB Executive Director for Mozambique, Mahomed Rafique

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Democracy, women’s empowerment principles, innovations in science and technology, good governance, infrastructure development, agriculture and employment promotion – have been the catalyst behind Mozambique’s economic growth.  The seeds that will propel the country into middle-income status by 2025 are being sown. A few days before a mission to Mozambique by several members of the Board of Directors of the African Development Bank, Mahomed Rafique, AfDB Executive Director representing Angola, Mozambique, Namibia and Zimbabwe, spoke with the Bank’s Communications Department and touched on the various facets of Mozambique’s economy. “Although Bank operations are visible, building an appropriate multimodal infrastructure network will enhance swift movements of people and cargos”, Rafique said.

On the major focus areas for the country’s economic take off, Rafique said the visit takes place at a time when Mozambique is experiencing a paradigm shift with regard to its economic development model. Indeed, the discovery of world-class natural gas reserves in the Rovuma basin (off the shores of Mozambique's northern coast) and the exploitation of considerable coal reserves in the Tete province, close to Malawi, are bringing about a major transformation of the country’s resources base by increasing the share of the extractive industries contribution to the GDP from 2% currently to roughly 30% in the next decade. For Rafique, the Executive Directors’ visit to Mozambique is an opportunity for extensive interactive dialogue with the country’s authorities, the private sector and civil society, and for a review of the existing socio-economic challenges and opportunities in order to ensure that the Bank Group’s assistance is better suited to the needs of the country. In his view, it is extremely urgent that the country devises a new and adapted economic model, which will seize the opportunity created by these mineral resources to improve the welfare of the population as a whole, through an inclusive-growth approach. “This represents a major socio-economic challenge for the country and the Bank Group’s resolve to assist through the promotion of appropriate economic reforms, the financing of infrastructure and the promotion of policies and programs aiming at entrepreneurship and job creation,” he affirmed.

Rafique also recalled some African Development Bank actions on the ground, focusing in particular on the country’s Action Plan (PARP, 2011-2014), and how the institution has helped to reduce poverty and promote human and economic well-being.  He observed that since its first project in the country in 1977, the Bank has provided and approved 81 operations, with  total commitments standing at above US $2 billion.  He stated that “The Bank’s current country strategy, effective since 2011, is built on the referred country’s poverty reduction strategy, the PARP 2011-2014, that has three main objectives: (i) increase in agricultural and fisheries production, (ii) employment promotion, and (iii) social and human development”.  He further noted that “the institution’s strategy responds to these objectives by focusing on enhanced private-sector competitiveness through infrastructure development,  job creation and agriculture productivity; and governance in support of inclusive growth, to strengthen the government efforts on poverty reduction and human development.”

Rafique further stated that, since 2011, a total of US $185 million have been committed from the African Development Fund through eight projects, ranging from direct investment in the agriculture and transport sectors that catalyze rural development and job creation, to providing technical assistance to the Government for better management of the energy sector, and contributing with budget support as well, among other operations. “All these contributions have greatly supported Mozambique’s poverty reduction efforts.”

With these Bank operations targeting poverty reduction, Mozambique is increasingly emerging as a dynamic and innovative country.  The Government has been working towards making the country, Africa’s gateway, based on the Agenda 2025. For Rafique, the country is a natural gateway for many inland countries such as  Malawi, Zimbabwe, Zambia or Botswana. He explained that the country has several road and railways corridor links running from inland Southern Africa to the Indian Ocean coast where one  finds the deepest natural seaport of the region (Nacala port) in addition to other ports such as Maputo, Matola or Beira. There are also many waterways such as the Zambezi that can eventually become navigable as well as several international airports. “Therefore Mozambique’s claim of having the potential to be one of Africa’s biggest gateways to the Indian Ocean and the Asian region is legitimate”, he observed. With these operations targeting poverty reduction, Mozambique is increasingly emerging as a dynamic and innovative country.  However, he noted that “currently, one of the biggest challenges for the country, beyond those of wide-based education and public health, is building an appropriate multimodal infrastructure network that will enable the swift movement of people and cargoes across the country and from inland Southern Africa to the Indian Ocean.”

The Executive Director further highlighted that this challenge is being addressed, in part with the assistance of the African Development Bank Group.  In addition, many new exporting industries in the automotive, textile or agro-processing sectors have been implanted in Mozambique of late, thus confirming the country's status as a manufacturing and technology hub. Should Mozambique succeed in using the wealth that generated by its extractive industry starting from the horizon 2020 as an opportunity for development, it will propel itself, indeed, as a middle-income country in the next decade. “

Questioned on governance impact on infrastructure investments and what could the Bank and Mozambique do differently to meet investments goal, Rafique described infrastructure development as highly capital-intensive. "Mozambique needs investments in the sector, in order to attract private venture capital so as to leverage its challenges.  The country has created a public-private partnership unit and promoted a series of business climate-enhancing measures to facilitate foreign direct investment in the infrastructure sector,” he said, explaining that the AfDB assists through direct capacity building in the development of PPPs and the management of large-scale investments, in particular using resources from the African Legal Support Facility and the African Development Fund (ADF). “The Bank also assists through the promotion of economic reforms aiming at enhancing the business climate, using the general budget support instrument. In parallel, the new credit policy of the Bank Group allows Mozambique to borrow from the AfDB window, and this enables the institution to work on very sizeable projects where it will aim to fund transformational infrastructures with strong economic returns such as the second phase of the Nacala Port Development, which is currently under review.”

In addition to the financing activities described above, the Bank helps in increasing the capacity of key ministries through regular trainings in contract management and financial management. The training activities are fully customized and offered in the Portuguese language.

Highlighting women’s role in the economy, and their empowerment principles in the country, the Executive Director said the authorities have made the promotion of women’s education and professional development, as well as their health, safety and welfare, a development priority. “Mozambique is one of the countries achieving the MDGs in this area. We changed the paradigm of inequality since 1975.  Our challenge and goal is to school all girls in Mozambique,” he said.