Anemic Poverty Reduction Reveals Lack of Social and Economic Inclusion
MAPUTO, December 21, 2016 - Between 1997 and 2009 for every percentage point of economic growth in Mozambique, poverty fell by only 0.26 percentage points in the country, roughly half of what is observed in the sub-Saharan Africa region, reveals the latest World Bank publication on poverty and its causes in Mozambique. The publication titled 'Accelerating Poverty Reduction in Mozambique: Challenges and Opportunities' also concludes that poverty has declined more slowly since 2003, having fallen by only 4 percentage points to reach 52 percent in 2009.
On the other hand, poverty reduction performance is uneven across regions of the country, with the central and northern regions showing disproportionately high poverty rates. In general, urban provinces tend to have lower poverty rates than rural provinces. Thus, the City of Maputo, for example, has the lowest levels of poverty in the country with 10 percent of the poor. At the other end of the distribution spectrum Zambezia province has poverty rates of 73 percent. Instead of shrinking like the rest of the country, poverty worsened in the 2003-2009 period in the provinces of Zambézia, Sofala, Manica and Gaza. These five provinces together accounted for approximately 70 percent of the poor in 2009, up from 59 percent in 2003. The provinces of Zambezia and Nampula together represented almost half of the country's poor in 2009 (48 percent), up from 42 Percent in 2003.
"The robust growth that the country has seen in recent times has mainly benefited the non-poor, signaling a weak inclusion in the country’s economic growth model," said Mark Lundell, World Bank Director for Mozambique. "The country needs to focus on public policies and investments geared towards social and economic inclusion," he added.
Mozambique has large levels of inequality. High levels of inequality tend to reduce the impact of economic growth on income growth for those at the bottom of the distribution scale. In other words, economic growth in Mozambique could have had a much greater impact on poverty reduction if its effects had not been affected by the increase in inequality over the same period. The absence of inclusive growth policies has affected the expansion of shared prosperity. To expand shared prosperity it would require a growing economy that brings more benefits to the lower echelons of the income distribution scale compared to the rest of the population.
The report also focuses on weak economic opportunities for the poor compared to the non-poor, as well as the issue of access (lack of) schooling as elements that contribute to the generational transmission of poverty among the poor. The report examines what is behind the high poverty rates in the central and northern provinces, concluding, among other things, that these provinces demonstrate low levels of return on household assets compared to other provinces, adding that if the return on household assets in relation to population assets had increased in the provinces of Nampula and Zambezia at the same pace as in the rest of the country, poverty would have reduced by about half in those two provinces. Finally, the report recalls that while Mozambique has a huge potential for agriculture, which remains largely untapped, low productivity and limited growth in market-based agriculture are major contributors to weak poverty reduction. On the other hand, the effects of natural disasters on the economy as a whole are exacerbated by the weight of agriculture in the country’s GDP. For example, in the year 2000, cyclone Eline, which caused record levels of precipitation, caused costs estimated at 20 percent of GDP at the time.