Mozambique(Commonwealth) _ The Board of Directors of the African Development Fund, the concessional lending window of the African Development Bank Group, has authorized a grant of $19.98 million to finance the implementation of Mozambique’s Economic Acceleration and Governance Support Programme.
This grant is the first of two consecutive general budget support operations valued approximately $20 million each for fiscal years 2023 and 2024.
The initiative will promote reforms in two key areas: (i) improving the private sector’s enabling environment for economic recovery and green growth, and (ii) improving the efficiency, accountability, and transparency of government spending. It will allow Mozambique to streamline its regulatory framework and investment facilitation processes, which will boost economic growth.
It would also allow Mozambique to modernize its regulatory framework and investment facilitation processes, which will encourage private sector development and attract investment in climate-smart agriculture. It is expected to support the growth of agribusiness and micro, small, and medium-sized firms, as well as efforts to mainstream gender and climate change measures into economic development. It will also improve public financial management, focusing on internal controls, public procurement, and debt management.
The program supports numerous reform measures. These include obtaining government approval for the Agricultural Development Strategy (2030) and Investment Plan (2022-2026); enacting a new cashew law to strengthen the legislative regime of the cashew nut value chain by adapting it to the current requirements of national and international markets; and enacting a new law to protect the cashew nut value chain, a new law to increase support for micro, small, and medium-sized businesses, including tax breaks; and a revised draft investment law that includes elements to promote responsible investment practices, streamline investment processes, and give protection against expropriation.
According to Ms. Leila Mokaddem, Director General of the Bank’s Southern Africa Regional Development and Business Delivery Office, the program has a strong private sector development focus, with a particular emphasis on enhanced private sector participation in key sectors, particularly agro-industry, and a strong job creation potential, including for women and youth, and is thus expected to positively impact socioeconomic development in Mozambique.
The African Development Bank Group’s active portfolio in Mozambique amounted at $1.19 billion at the end of July 2023. Investments are made in the energy (48.8%), transportation (32.6%), agricultural (16.8%), social (1.6%), and multi-sector activities (0.2%) sectors.
Mozambique is endowed with abundant natural resources, despite the fact that the country’s economy is mostly dependent on fishing (primarily mollusks, crustaceans, and echinoderms) and agriculture, with a rising food and beverage, chemical manufacturing, aluminum, and oil industry. Further, the tourism industry is also growing. South Africa is still Mozambique’s largest trading partner, with a close relationship with Portugal and an eye on other European markets.
Mozambique’s GDP growth has been booming since 2001, yet the country remains one of the poorest and most underdeveloped in the world, ranking low in GDP per capita, human development, indices of inequality, and average life expectancy.
According to 2022 predictions, the country’s population of roughly 30 million people is largely made up of Bantu peoples. However, the colonial language of Portuguese is the only official language in Mozambique, and it is widely spoken as a first or second language in urban areas, as well as a lingua franca among younger Mozambicans with access to formal education.
Mozambique is a member of the United Nations, the African Union, the Commonwealth of Nations, the Organization of Islamic Cooperation, the Community of Portuguese-Speaking Countries, the Non-Aligned Movement, the Southern African Development Community, and La Francophonie.
Mozambique is the world’s 35th-largest country, covering 309,475 square miles (801,537 square kilometers). Mozambique is located on Africa’s southeast coast, bordered by Eswatini to the south, South Africa to the southwest, Zimbabwe to the west, Zambia and Malawi to the northwest, and Tanzania to the north and the Indian Ocean to the east.
