WASHINGTON, March 30, 2015 — The World Bank Group’s Board of Executive Directors today approved an International Development Association (IDA) credit in the amount of US$50 million to boost Mozambique’s efforts to increase access to food and better nutrition for its people, and to promote market-based agriculture and private sector investment. This financing is the second of a series of three agriculture budget support operations that finance a medium-term agriculture sector reform program in Mozambique.
While Mozambique’s agriculture competitiveness has increased over the years, the sector is largely characterized by low productivity. Turning agriculture into an engine for achieving broad-based economic growth and accelerated poverty reduction will require reforms to increase private sector participation, public investments, and an enabling business environment.
“This operation seeks to tackle some of the key policy and institutional reform priorities to address the binding constraints facing the agriculture sector in Mozambique,” said Mark Lundell, World Bank Country Director for Mozambique, Madagascar, Mauritius, Seychelles, and Comoros. “Agriculture offers scope to narrow persistent income disparities between rural and urban areas and to reduce poverty in regions that benefitted little from the economic gains of recent years.”
This operation represents a dialogue platform to engage in a medium-term reform program with the Government and other sector stakeholders in alignment with the country’s agriculture development program and policy priorities. It specifically supports reforms to improve agricultural technology, enhance access to productive assets and financial services, and improve monitoring of sector performance.
“Agriculture in Mozambique employs over 70 percent of the workforce and contributes to more than 25 percent of the country’s GDP,” said Jan Joost Nijhoff, Senior Agriculture Economist and Task Team Leader for the operation. “Stronger agricultural competitiveness, based on improved productivity and more effective markets, would potentially spur growth in exports and reduce Mozambique’s import bill for agricultural commodities. Moreover, increased productivity will enhance food security among rural households.”
The reform agenda supported by this operation is consistent with the objective of the country’s poverty reduction strategy to reduce rural poverty by developing the agriculture sector, and is aligned with the National Agriculture Sector Investment Plan (PNISA) developed under the African Union’s Comprehensive Africa Agriculture Development Program (CAADP) agenda, which provides a common framework for agriculture sector development on the continent.