Megaprojects failed, admits World Bank

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Megaprojects failed, admits World Bank

‘Megaprojects (especially in extractive sectors) have limited linkages to the rest of the economy and have failed to create a significant number of jobs or benefits to local communities,’ admits the World Bank it is new Mozambique Country Partnership Framework (CPF), approved last Thursday and published Sunday (22 and 25 January). ‘Employment outcomes remain weak, as growth continues to be driven by extractive sectors with limited job spillovers.’ https://www.worldbank.org/ext/en/country/mozambique/cpf

‘Mozambique’s growth model has delivered limited improvements in living standards, largely due to the insufficient creation of good-quality jobs. Real GDP growth averaged 8.2% per year during 1996-2015, among the fastest growth rates in the world, supported by foreign investment in extractive activities. However, strong economic growth delivered limited and uneven benefits in terms of job creation and poverty reduction.’

‘Poverty levels have increased, owing to the lack of good jobs’ reports the World Bank. ‘The share of population in poverty declined from 60% to 48% between 2002-2014 (using the national poverty line), but it subsequently increased to 63%in 2022, reversing earlier progress’.

The CPF ‘reflects recent World Bank Group corporate changes: new vision, mission, and approach to country engagement.’ The Group includes the International Financing Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA). The last time the Group worked together in Mozambique was 2000-2010 when it forced Mozambique to accept the extractive megaprojects: Mozal aluminium, gas to South Africa, coal, and heavy sands.

Focus on Nacala corridor and Inhambane tourism

The World Bank admits its spread of projects has not been effective and for 2026-31 will concentrate on agribusiness and tourism, which is says have the most job creation potential, with strong linkages to local economy. ‘By providing more and better local jobs (some of them low-skilled), these sectors can help address youth disenfranchisement.’ Within these priorities, it will focus on the Nacala corridor for agribusiness, and ‘targeting the Inhambane tourist hot-spots cluster … focusing on one flagship destination in the Inhambane area.’

The Nacala corridor has been a favourite for donor projects, and the Bank is set to repeat the roots of prior failure. ‘In the populated Nacala corridor, agriculture production is fragmented and insufficiently connected to market and logistics infrastructure: railways and ports are mostly used for mineral exports, and roads are in poor conditions.’ Which shows the lack of knowledge of history. The Nacala railway once served many local stations and was key for agricultural marketing by small commercial farmers, until it was upgraded for coal exports and local stations were closed. And again, the Bank calls for land privatisation: ‘Existing land rights hamper the ability to transfer and use land as collateral, limiting access to finance.’

The Bank admits substantial failures, including the much promoted Sustenta agriculture programme. ‘Results in agriculture remain weak despite considerable WBG [World Bank Group] support. … Substantial resources invested by WBG programs since the early 2000s have not translated into significant improvements in agricultural productivity and incomes.’ The Bank also admits the failure of its road and transport programmes and there will be no more investments in that area.

And the Bank finally admits the overuse of ineffective consultants. ‘Institutional capacity to implement projects is weak and prone to substantive delays. This has led to overreliance on consultants’ staffingisolated Project Implementation Units to manage Bank-financed projects.

Again the Bank ignores its own agriculture recommendations

The World Bank’s Mozambique ‘Poverty & Equity Brief’, published last October, said that ‘Poverty is more widespread in rural areas, 70.9% of the rural population is poor, compared to 47.6% in urban areas. ‘The highest poverty rates are concentrated in the North and Central regions, particularly in Nampula, Cabo Delgado, and Zambezia, while the Southern region – especially Maputo Province and Maputo City – records the lowest rates. Poverty is disproportionately higher among youth, individuals with lower levels of education, residents of large rural households, and agricultural workers.’ https://documents1.worldbank.org/curated/en/099723104212527558/pdf/IDU-64f9c003-a465-439a-840e-bddcf59ca5a3.pdf

‘Despite reforms, poverty remains high (around 80% in 2025), and the benefits of growth have not been widely shared. The informal sector dominates the labor market, and rural poverty persists due to low agricultural productivity’

Yet for Mozambique the World Bank follows its blinkered obsession that the free market will solve rural poverty. The stress is on private agribusiness, IFC funded plantations, and land privatisation. World Bank reports in 2009 and 2013 called for promoting rural development and following Thailand as the development model. Government must create the conditions to help private agribusiness and family commercial farmers to grow. The Bank reports show Thailand became a major rice exporter and sharply reduced poverty with four state interventions to create a firm basis for a growing private sector: 1) government developed public and semi-public agribusiness companies, 2) government policy encouraged famers to expand cultivated area, 3) government invested heavily in irrigation and in reducing the price of fertiliser, and 4) a state bank lent to 95% of farmers. None of that would be permitted in Mozambique now. Yet from Zimbabwe to Europe to the United States, family commercial farmers are successful because the state provides the solid base for farmers and private agribusiness.

World Bank hits government and Frelimo

Tucked inside the report are savage attacks on government and indirectly the ruling party, Frelimo. First, it attacks the broken social contract:

‘Trust between the state and citizens has been eroded by exclusion and uneven state presence, as evidenced by the ongoing violence in Cabo Delgado and nationwide election-related civil unrest. Strengthening broad-based platforms for voice and accountability, including deepening the decentralization process and civic freedoms, are critical to bring the state closer to citizens and enhance participation in decision-making. Promoting economic inclusion (by creating opportunities for jobs and livelihoods, especially for the youth) and providing basic services in an inclusive and participatory manner, will help build trust between communities and public institutions, and thus strengthen social cohesion. A stable political and social environment is critical to attract investment and support long-term development.’

And there is a swinging attack on education:’ As a result of large increases in the wage bill, resources for other recurrent and capital spending in social sectors have been squeezed, which is further undermined by low spending efficiency. Mozambique has made important progress in access to education at all levels, but quality remains a critical barrier for improving human capital. School completion has improved, but remains low in comparison with peer countries, particularly for girls. Learning outcomes are low, with only 5% of Grade 3 students able to read and understand a simple text, largely due to overcrowded classrooms, weak school management, limited infrastructure, and climate-related disruptions. The average pupil-teacher ratio in primary education is above 70. Teacher training and school leadership lack practical focus, hindering efforts to improve learning environments. … High prevalence of sexual harassment in schools has been unveiled by effective grievance redress mechanisms, but no significant progress has been made to address it.’