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Overview

  • Mozambique borders Tanzania, Malawi, Zambia, Zimbabwe, South Africa, and Eswatini. Its long Indian Ocean coastline of 2,500 kilometers faces east to Madagascar.  

    About two-thirds of its population of more than 31 million (2020) live and work in rural areas. It is endowed with ample arable land, water, energy, as well as mineral resources and newly discovered natural gas offshore; three, deep seaports; and a relatively large potential pool of labor. It is also strategically located; four of the six countries it borders are landlocked, and hence dependent on Mozambique as a conduit to global markets. Mozambique’s strong ties to the region’s economic engine, South Africa, underscore the importance of its economic, political, and social development to the stability and growth of Southern Africa as a whole. 

    Political Context 

    The Front for the Liberation of Mozambique (Frelimo) and the Mozambican National Resistance (Renamo) remain the country’s main political forces, followed by the Mozambique Democratic Movement (MDM). Frelimowon the 2019 presidential and legislative elections in a landslide . Frelimo also secured a majority in all 10 provinces, thus electing governors in each province.

    Renamo, the former rebel group that waged a bloody civil war that ended in 1992, has maintained military bases after the UN-backed Rome Peace Accord. Ever since the end of the civil war, the country has registered flare-ups of armed confrontations and violence.  A new peace accord was reached in August 2019, nevertheless violated several times by a Renamo breakaway military faction known as Military Junta. However, the Renamo new leader, Ussufo Momade, who took over the reins of the party following the passing of Mr Afonso Dhakama, has shown resolve and determination in pursuing the peace deal despite facing internal backlash from members of his  military wing. The August peace deal, under implementation, aims  at achieving  greater pacification of the country by integrating Renamo residual fighters into the national army, and  dismantling Renamo military bases splattered around the country.

    Meanwhile, Mozambique is grappling with another so-called Islamic insurgency in parts of the gas-rich province of Cabo-Delgado. By mid-February 2021, more than three years after the start of the insurgency, 798 incidents of conflict in Cabo Delgado have been recorded, with nearly 4,000 fatalities and 600,000 refugees. An estimated three million people are projected to face high levels of food insecurity across the country due to the combined effects of the conflict in the North, weather shocks, and COVID-19 mitigation measures, which have restricted economic activity.

    Economic Outlook 

    Mozambique’s economy is expected to gradually recover in 2021, but substantial downside risks remain due to uncertainty surrounding the path of the COVID-19 (coronavirus) pandemic. While the economy registered its first contraction in 2020 in nearly three decades, growth is expected to rebound over the medium-term, reaching about 4% by 2022.

    As the recent Mozambique Economic Update (March 2021) notes, the country needs to press ahead with its structural reform agenda as the pandemic subsides. In the near-term, measures to support viable firms and households would be crucial for a resilient and inclusive recovery. In the recovery phase, policies focusing on supporting economic transformation and job creation, especially for the youth, would be critical. Targeted interventions to support women and alleviate gender inequalities as well as to harness the power of mobile technology would support sustainable and inclusive growth in the medium term.

    Development Challenges 

    The country’s main challenges include maintaining macroeconomic stability considering exposure to commodity price fluctuations, and making further efforts to reestablish confidence through improved economic governance and increased transparency. Moreover, structural reforms are needed in support of the currently struggling private sector. Another major challenge is diversifying the economy away from the current focus on capital-intensive projects and low-productivity subsistence agriculture, while strengthening the key drivers of inclusion, such as improved quality of education and health service delivery, which could in turn improve social indicators.  

    Last Updated: Mar 19, 2021

  • World Bank Group Engagement in Mozambique 

    The focus areas of the current World Bank Group strategy, which targets underserved regions of the country, are: (a) promoting diversified growth and enhanced productivity, (b) Investing in Human Capital, and (c) Enhancing sustainability and resilience. The World Bank’s portfolio is currently in the process of recalibration as part of the effort to support the country’s focus on conflict risk mitigation and its pivot to prevention.

    The structure and composition of the current portfolio reflects the ongoing Country Partnership Framework CPF FY17–FY21. The total International Development Associaiton portfolio stands at $3 billion, which includes five regional projects. Of these, 56% cover Sustainable Development operations, followed by investment lending in infrastructure with 27%, Human Development operations with 14%, and Equitable Finance and Institutions operations with 7%.

    Among the five regional projects, two are on energy, namely the Temane Regional Electrification Project and the Mozambique – Malawi Regional Interconnector Projection, and two in Human Development, namely, the Southern Africa Tuberculosis & Health Systems Strengthening Project and Accelerated Centers of Excellence, and one in Sustainable Development with the South West Indian Ocean Fisheries & Shared Growth Project. The portfolio is complemented by International Finance Corporation investments and Multilateral Investment Guarantee Agency operations focused on private sector development.

    Last Updated: Mar 19, 2021

  • Infrastructure 

    Rebuilding Resilient Road Networks 

    In March 2019, the government concluded and inaugurated road networks rebuilt in the province of Gaza, southern Mozambique, following the destruction caused by the 2012 and 2013 floods. The first phase of the Roads and Bridges Management and Maintenance Program restored road connectivity between the various affected areas covering 632.5 km of roads. The $12 million, International Development Agency (IDA)-funded emergency repair operation was completed satisfactorily in 2016. The second phase aimed  for a more in-depth reconstruction of roads and bridges. The project benefited from a total of $102 million of IDA funds in direct investment, and resulted in a total of 198 km of constructed and repaired weather-resilient roads and three new bridges. For example, to increase rainwater flow and reduce overtopping in the rainy season, 115 aqueducts were built, and 15 others repaired along the project's various roads and bridges.

    Resilience

    Improving Costal Cities Resilience 

    For years, the coastal city of Beira has been hit by violent storms and recurrent flooding. With poorly planned settlements, inadequate housing and the effects of climate change worsening, large portions of the city’s residents were left vulnerable to climate-related disasters. Through the Mozambique Cities and Climate Change Project, funded by $120 million IDA credit, the city has strengthened its resilience to weather-related hazards. The project upgraded and built 11 km of drainage canals, installation of six flood control stations and the construction of a 170, 000 cubic meter large water retention basin, among other benefits.

    Protecting Mozambique’s diverse habitats

    Through Bank support for the government’s Mozambique Conversation Areas for Biodiversity and Development Project (MozBio), protection of the country’s diverse habitats has been strengthened, improving the lives of the people who live in and around these areas. The first phase of MozBio (2015-2019) involved more than 20,000 beneficiaries in the Chimanimani, Maputo, Gilé and Quirimbas National Parks, almost half of which are women, in alternative income-generating activities such as honey production and conservation agriculture. The project also piloted the establishment of girls’ clubs and environmental education campaigns in schools, which helped the community to invest in the future by improving environmental awareness and reading and writing skills for youth. 

    Supporting an enabling environment for sustainable fishery 

    Through several initiatives, the Bank-supported SWIOFish Project is helping Tanzania and Mozambique fishing communities increase their fish stocks and restore livelihoods and fisheries. The project also helped significantly reduce the illegal fishing practices such as blast fishing in Tanzania. In Mozambique, the project is providing financing to fishing associations, and helping fishers, particularly women, save their earnings, borrow money and grow their businesses.

    Agriculture

    Providing Low-Cost Irrigation for Smallholder Farmers

    The Bank is investing $70 million to help small farmers grow and sell rice and vegetables through rehabilitated and expanded irrigation schemes in the central provinces of Manica, Sofala, and Zambézia. More than 6,000 people have directly benefited from the Sustainable Irrigation Development Project (PROIRRI) so far. At completion, the project is expected to ensure irrigation more than 3,000 hectares, of which 1,700 ha are dedicated to rice production, 800 ha for horticulture, and 500 ha for contract production. 

    Energy

    Supporting Rural Electrification in Mozambique

    The World Bank supports the expansion of photovoltaic solar energy programs, connecting over 500 rural health centers and 300 schools throughout Mozambique. IDA-funded projects which contributed to building new transmission lines and distribution networks, expanding access to electricity. The Bank also supports the use of environmentally-friendly cooking stoves, which brings down pressure on wood fuels, reduces deforestation, and protects women and children against carbon monoxide and volatile particles emanating from coal. 

    The World Bank Group works closely with other development partners to improve the quality and effectiveness of development assistance to Mozambique. Collaboration with development partners has also focused on education, health, roads, and fiduciary and monitoring and evaluation. 

    Last Updated: Mar 19, 2021

  • The World Bank Group works closely with other development partners to improve the quality and effectiveness of development assistance to Mozambique. Collaboration with development partners has also focused on education, health, roads, and fiduciary and monitoring and evaluation. 

    Last Updated: Mar 19, 2021

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LENDING

Mozambique: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

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In Depth

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Additional Resources

Country Office Contacts

Main Office Contact
Av. Kenneth Kaunda, 1224
Maputo, Mozambique
+258-21-482-300
For general information and inquiries
Rafael Saute
Sr. External Affairs Officer
+258-21-482-944
rsaute@worldbank.org
For project-related issues and complaints
mozambiquealert@worldbank.org