Mozambique

Norwegian development cooperation with Mozambique has resulted in more households and districts getting electricity and in increased capacity for sustainable production of petroleum resources for the authorities.

Facts about Mozambique

Population
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Millions
Life expectancy
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Years
GNI pr capita
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USD
Percentage poor people (below 1.25$)
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%
HDI
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Ranking
Source:

Bilateral assistance million kroner

Bilateral assistance million kroner

Bilateral assistance million kroner

Mozambique held national elections in October 2014. The Frelimo candidate, Filipe Nyusi, won with 57 per cent of the votes, compared with the 36.6 per cent secured by Renamo's candidate, Afonso Dhlakama. Renamo gained control of three of ten provincial assemblies.

Nyusi commenced his five- year presidential term in January 2015. Relations with the opposition party, Renamo, are characterized by mutual distrust. The military confrontations of the past two years have ended, following a ceasefire agreement signed in September 2014.

Stable growth

In 2014, economic growth was 7.5 per cent and inflation 2.4 per cent. Economic growth has remained stable at this level for the past ten years, and no change is expected in 2015.

Growth is broken down into a number of sectors, the main ones being agricultural production, financial services and mining. The most important export product is aluminium from the Mozal smelter, and others are electricity, gas, coal and agricultural products.

Near-term growth in Mozambique is expected to be generated largely through the extraction and export of coal and gas, but low coal and oil prices are creating uncertainty with respect to planned investment in the extractive industry.

Improvement in the business sector

The World Bank's "Doing Business Index" for 2014, which ranks a total of 189 countries shows Mozambique moving up 15 places, from 142nd place the previous year to 127th place.

The improvement is attributable to reforms in property registration, access to credit and improved rights for creditors. The regulatory framework still presents a challenge to the private business sector.

In recent years, discoveries of coal and gas have radically altered the outlook for economic development. The enormous offshore gas discoveries in the Cabo Delgado province are the largest the world has seen in the past decade.

If the production of liquid natural gas, LNG, proceeds according to plan, Mozambique may become one of the world's three largest exporters of natural gas in the course of the next ten years.

In the national budget for 2014, Mozambique's own revenue accounted for 72.8 per cent of total spending. This is a substantial increase on five years ago, when the share was around 50 per cent.

Education, health, agriculture and infrastructure continue to receive high priority in the budget. A total of 61.7 per cent of budget spending went to these sectors, which are prioritized in the country's strategy to eradicate poverty.

The stable economic growth has done little in the way of reducing poverty. Few new jobs have been created, and unemployed youth make up a growing group. The failure to reduce poverty is largely explained by low growth in the agricultural sector, attributable mainly to inadequate infrastructure and access to capital.

Development cooperation

Inclusive and sustainable development

Through the Embassy in Maputo, Norway has prioritised extensive contact with private sector actors, and has identified agricultural and energy projects due to start in 2015.

As a result of Norway's support for the e-SISTAFE Common Fund, the electronic financial management system now covers 65 per cent of public spending, compared with 59 per cent previously.

Digital systems have been introduced, and the efficiency of the tax administration increased as a result of support through the Tax Common Fund. The collaboration between the Norwegian and Mozambican tax administrations has led to more efficient and professional auditing of petroleum sector companies.

A new programme has been put in place in the Oil for Development collaboration. The authorities have had legal assistance to revise the Petroleum Act and indirect assistance in their negotiations with oil and gas companies on licences.

So far, support for the cooperation platform for NGOs in the extractive industry has not yielded the desired results, but the Norwegian Embassy in Maputo will continue the work of identifying potential partner organizations in 2015.

Considerable investment must be made in vocational training if Mozambique is to be able to exploit its natural resources. The Norwegian Embassy has a number of projects in the start-up phase in this area.

Support for the energy sector increased the capacity of the ministry and of the state power company, EdM. In the course of a decade, Norway has helped to increase the share of households connected to the national power grid from seven per cent in 2004 to 26 per cent in 2014.

More districts on the national grid

The number of districts connected to the grid increased from 50 to 114 in the same period. The energy cooperation will prioritize work to reduce the number of injuries at EdM. According to statistics, injuries were reduced by 50 per cent from 2013 to 2014.

Norwegian technical assistance contributed substantially to the collaboration between EdM and gas-extractor SASOL on the establishment of a new gas power plant, which opened in 2014. The market share of power trades routed through the Southern African Power Pool increased from 1.5 to 6.0 per cent in 2014.

Increased agricultural production is crucial to both food security and economic growth in Mozambique. Seventy per cent of the inhabitants make a living in this sector, but productivity is very low. Some 35 per cent of the population is chronically malnourished, and the food situation of 240 000 people is unstable.

Norwegian People's Aid partnered Mozambican organizations on projects focused on climate-smart agriculture. The partnership reported good progress in 2014 following a slow start the previous year. Support for agriculture through NGOs resulted in trial projects that report increased production with alternative, customized methods, with close to 50 per cent participation by women in parts of the programme.

Fisheries account for around three per cent of Mozambique's gross domestic product. The industry is dominated by very low-tech, small-scale fisheries which involve 400 000 people. Over-exploitation of relatively limited resources presents a challenge, and there is a great deal of illegal, unregistered and under-reported fishing.

The fisheries authorities have achieved some degree of surveillance capacity with Norwegian aid. The Government's long-term plan for the fisheries sector gives priority to increased investment in fish-farming, which has by far the greatest potential for higher production. The construction of a centre for farming tilapia is progressing satisfactorily. According to plan, the centre will be completed in 2015.

Increased engagement and value added by Norwegian business sector

The presence of the Norwegian business sector in Mozambique is relatively moderate at present, but given the major gas discoveries of recent years there is a considerable potential for Norwegian suppliers to the petroleum sector, and a number of Norwegian companies have been in preliminary contact with the Norwegian Embassy. The Embassy places emphasis on thorough, updated information on its website.

Norwegian companies also have a presence in renewable energy segments such as hydroelectric power and solar energy. The Norwegian Embassy arranges meeting places for Norwegian and Mozambican business operators, and for Norwegian actors' contact and meetings with the authorities. 

Peaceful, democratic development and respect for human rights

The object of supporting civil society is to promote an active, competent civil society in areas such as gender equality, sexual and reproductive health and rights, economic and political participation and work targeting violence against women.

In the collaboration on energy and fisheries, Norway has contributed to building up the capacity of the national authorities and to the integration of a gender equality perspective.

Two projects demonstrating women's use of energy have been carried out, and more capacity has been built up to work for equal opportunities in central energy institutions. Experience gleaned from the collaboration shows that the transition from training in gender equality to actual results and change is a challenging one.

The fisheries programme has included a study of opportunities for including women in the value chain from fishing, via processing to sales. The study is to be followed up in collaboration with the Royal Norwegian Society for Development (Norges Vel) in connection with intensified investment in tilapia farming.

Support for electoral observation from the EU, the Carter Center and the national Centre for Public Integrity provided documentation of the conduct of the election. Owing to its contribution to the EU observation process, the Norwegian Embassy was able to take part in the EU consultations with the presidential candidates.

NGOs

Norad supports twelve Norwegian and two international NGOs that cooperate with local partners in Mozambique. In 2014, the organizations received just under NOK 35 million. The support is channelled to education, children's rights, clean energy, agriculture, business development and natural resource management.

The chief Norwegian actors are Save the Children,

Norwegian People's Aid, Norges Vel and t Norwegian People's Aid's principal partner in Mozambique is União Nacional de Camponeses (UNAC). UNAC is a union of farmers that is engaged in mobilizing and organizing small village farmers fighting for the right to land, and has been one of the most important players in the struggle for the the law that regulates land lease in Mozambique.

Norwegian People's Aid's contribution has consisted of building organizations and capacity to exert effective political influence on the issue of land rights for farmers. UNAC has become one of the strongest voices backing small farmers in Mozambique. 

 

Published 28.08.2014
Last updated 20.11.2015