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Mozambique

Situation and cooperation


Education is an essential requirement for people to improve their economic situation. The focus of German development cooperation with Mozambique is on primary education and vocational training.
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Education is an essential requirement for people to improve their economic situation. The focus of German development cooperation with Mozambique is on primary education and vocational training.

Germany supports the education strategy of the Mozambican government. It aims to provide access to high-quality education for all children and help maintain its standard.

In order for the population of Mozambique to profit from the impressive growth rates, micro, small and medium-sized enterprises need to be better supported, for example in gaining access to financial services.

In Mosambique, particularly micro, small and mediumsized enterprises find it hard to gain access to financing for investment and growth. The aim is for private banks to offer appropiate services and credits for micro and small enterprises in rural areas.

Vocational training for future car mechanics in the vocational school Young Africa in Beira. Germany supports Mozambique in its reform of vocational education.

Training to become carpenters in the vocational school Young Africa in Beira. The reform of vocational training focusses on improving school equipment, school management and a stronger linkage with the private sectore by becoming more practice-oriented.

Regulating the river Chiveve should help protect the houses and small businesses of the mostly poor people living in areas along the river in Beira.

A worker crossing a canal. In Beira, the tributaries to the river Chiveve are being dug out to provide a bigger retention area in the case of flooding, thus protecting built-up areas.

Gardener in a nursery for mangroves. Mangroves play an important role in stabilising river and coastal areas. They help prevent soil being washed away during floodings.

A mangrove seedling. Mangrove swamps are important habitats that are also useful for humans. They provide wood for construction or for producing char coal.

Children on their way to school. Germany contributes to Mozambique's education budget and advises the construction department of the Ministry of Education on building and renovating school buildings.

Mozambique's economy is one of the fastest-growing in Africa. But the economic success is distributed unevenly. In 2008, the last year where data was available, more than half of the population lived below the national poverty line.

Workers building a sewage canal in a slum area. Germany is advising 15 municipalities in Mozambique on extending infrastructure and strengthening local institutions.

A tailor working in a slum in Beira. Many inhabitants of informal settlements do not have access to clean drinking water and sanitary facilities.

Children playing in the streets. Mozambique's population is very young. Around 45 per cent of the inhabitants are below the age of 15.

Small store in an informal settlement

A small boy looking at a house that is slowly being washed away by the sea. Mozambique is particularly affected by the effects of climate change.

Tidal regulation construction. They are designed to regulate the flow of water into and out of rivers to prevent flooding and soil erosion.

An old ship in the evening sun at the beach of Beira

Mozambique had a troubled start to self-rule. After centuries of Portuguese colonial rule, the liberation movement Frelimo achieved independence for the country in 1975. Mozambique became a socialist people’s republic, and Frelimo became the ruling party. The Renamo rebel movement fought against this regime in a civil war that lasted 16 years. More than one million people died and a third of the entire population of the country fled their homes. When the conflicting parties finally signed a peace agreement in 1992, most of the country lay in ruins.

Mozambique has since developed fairly consistently towards becoming a democratic state. Since 1994, several parties have been represented in the national parliament, and human rights are now enshrined in the constitution. The government is also working to establish a functioning system based on the rule of law.

The continuing peaceful development of the country is still a challenge, however. Since early 2015, tensions within the country have worsened significantly, with sporadic armed clashes between security forces and the armed wing of the opposition party, Renamo, especially in the centre of the country. Renamo is demanding greater autonomy for the provinces. Internationally mediated negotiations are currently ongoing, in an effort to restore peace in the country.

Economy

Worker in a bakery in Maputo, Mozambique, which was set up with financial support from Germany

Between 2011 and 2014 Mozambique’s economy grew steadily at a rate of more than 7 per cent per annum. Growth slowed to 6.3 per cent in 2015, at least partly because of the drop in world market prices for raw materials. The International Monetary Fund (IMF) expects growth in 2016 to have been of the order of 4.5 per cent.

In early 2016 it emerged that Mozambique’s government had issued unconstitutional government guarantees to back loans totalling 1.4 billion US dollars taken out by state-owned companies between 2012 and 2014. As a result, macroeconomic indicators have worsened appreciably, while the IMF and budget assistance donors have suspended payments. The financial leeway open to the current government is extremely limited. Germany has not provided budget assistance to Mozambique since 2014.

But Mozambique still has potential. Not only does it have significant gas and coal reserves. It is also rich in other minerals, including graphite, iron, titanium, tantalum, rare earths, gold, diamonds and uranium, as well as having enormous natural energy resources (especially hydropower).

International businesses tend to invest in large-scale projects in the extractive sector and in agriculture, but these sectors are creating only a small number of the jobs that the country so urgently needs. Shortages of well trained skilled workers, the lack of adequate access to credit, poor infrastructure and widespread corruption are impacting negatively on the business climate.

In its current programme, the government has set itself the goal of boosting productivity and competitiveness, especially in agriculture, and of improving the general economic framework in Mozambique. Other important aspects include improving infrastructure, making it easier to access power, providing training for the workforce, and cutting through red tape.


Environment and climate change

Flood in Mozambique, March 2000. Many roads and bridges in the capital, Maputo, were destroyed.

Mozambique is one of the countries worst hit by climate change. On the one hand, droughts and failing rains jeopardise the livelihoods of the people, most of whom depend on agriculture. On the other, coastal regions and areas along the country’s rivers are increasingly facing catastrophic flooding, as cyclones and extreme rainfall become more frequent.

Central Mozambique is particularly badly affected; this is one of the regional focuses of German development cooperation. Since the devastating floods that hit the country in 2000, robbing about one million people of their livelihoods, Germany has been working with Mozambique on development cooperation programmes concerned with disaster preparedness and adaptation to climate change.

It is also to be feared that illegal logging and the cultivation of monocultures including biofuel crops will cause major environmental degradation in Mozambique. Coal mining and the construction of major hydropower plants also bring with them environmental risks. Poaching is another problem.


Development potential

A man watching an elephant in Great Limpopo Transfrontier Park

Although Mozambique offers good conditions for crop farming, so far only a fraction of its fertile cropland is being used in a profitable way. The agricultural sector generates only about 25 per cent of the country’s overall economic output, although it provides work for about 80 per cent of the population. The few crops that are currently being produced for export include tobacco, sugar, tea, cotton and cashew nuts.

Tourism also offers potential: Mozambique’s coastline stretches for over 2,700 kilometres along the Indian Ocean and it offers huge species diversity of flora and fauna. Germany is supporting the conservation project Transfrontier Conservation Area Great Limpopo, which also offers opportunities for tourism.

Mozambique also has great potential in the field of renewable energy. Renewables like sunshine and wind, biomass and geothermal energy could also be used to serve rural areas which have not hitherto had any real access to electric power. Germany and other donor countries are supporting Mozambique within the scope of the regional Energising Development programme, which is pushing ahead with the use of renewable energy at local level.


Priority areas of German cooperation with Mozambique

Germany and Mozambique have been cooperating for 40 years in the field of development. Cooperation focuses on advising and building the capacity of Mozambican institutions at the national level and in the two priority provinces of Inhambane and Sofala.

At the government negotiations in June 2016, the German government pledged 89.5 million euros for development cooperation with Mozambique. Of this sum, 61 million euros have been earmarked for Financial cooperation and 28.5 million euros for Technical Cooperation. Negotiations are held once every two years.

The two sides confirmed the following priority areas of cooperation:

  • Basic and vocational education
  • Decentralisation and public financial management
  • Sustainable economic development.

Other important areas of cooperation include conserving biodiversity, energy and adaptation to climate change.

The BMZ has also pledged to support Mozambique in establishing a green innovation centre in the food and agriculture sector. The programme is part of the special initiative One World – No Hunger. Green innovation centres aim to achieve a sustainable rise in the productivity of small farms, raising farmers’ incomes, while creating new jobs in upstream and downstream businesses and improving the food supply available at local level.


Basic and vocational education

Training as a carpenter at the Young Africa vocational school in Beira, Mozambique

The BMZ supports the implementation of the Mozambican government’s strategic education plan. It aims to give all children access to high-quality education and ensure that training is also of a high quality. As well as building schools, Germany is in particular promoting improvements in teacher training. Advisory services are being delivered to the national Ministry of Education and the education authorities in the provinces of Inhambane and Sofala in the fields of planning and administration.

The Federal Republic of Germany also supports the labour-market-oriented reform of vocational education and training, also in the field of industrial maintenance. The main focuses are improving schools’ equipment, enhancing the pre- and in-service training of vocational school teachers, and gearing training more to practical requirements.

HIV/AIDS prevention is an important topic in the education sector in Mozambique, where about 10 per cent of all 15 to 49 year olds are living with HIV.


Decentralisation and public financial management (including extractive industries governance)

A German-assisted project to help Mozambique adapt to climate change – construction of a tidal barrier in the port of Beira (Mozambique) to regulate the River Chiveve

The Government of Mozambique has launched a process of decentralisation, but local administrative bodies are still unable to perform the duties delegated to them to the required standard. Shortcomings are particularly evident in the field of financial management.

Germany is advising the responsible national ministries and the supreme audit institute on ways of fostering good governance in the country’s districts and municipalities. Local administrative bodies are receiving support to enable them to raise their income and introduce planning and control mechanisms so as to ensure transparent, correct use of public funds.

Within the framework of Financial cooperation, measures to extend the economic and social infrastructure in selected municipalities are being financed. These include measures to help municipalities adapt to the consequences of climate change.

Germany’s development cooperation is advising the Ministry of Mineral Resources and Energy as well as districts and municipalities in mining areas, in order to improve management in the extractive sector. In 2010 Mozambique joined the Extractive Industries Transparency Initiative (EITI). In 2012 it was recognised by EITI as a compliant country.


Sustainable economic development

Branch office of Banco Terra, a microfinance bank, in Beira, Mozambique

To ensure that the population as a whole benefits from economic growth, micro, small and medium enterprises need development impetus. Germany is therefore assisting the Mozambican government in improving the legal, political and institutional environment for MSMEs. Business cycles in rural areas in particular are to be rendered more robust. Among other things, German experts are advising the responsible department, the Ministry of Industry and Commerce, regarding the elaboration of specific reforms and their implementation at provincial level.

Through development partnerships, the BMZ is cooperating directly with selected businesses, combining the innovative force of the private sector with the resources, the expertise and the experience of development cooperation.

Germany is also supporting efforts to improve the financial system, for instance through the introduction of a deposit insurance fund and easier access to loans especially in the agricultural sector. The aim is to get private banks to offer appropriate loans and financial products for micro and small enterprises in rural areas. Since very few bank branches exist in rural areas, Germany is also promoting innovative ways of selling these financial products.


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