The 20-year-development plan approved by the Council of Ministers Tuesday (17 June) admits the past decade has been a disaster. “Lower than expected economic growth resulted in lower investment, higher unemployment and a reduction in the government’s capacity to finance social programmes and essential infrastructure” in the decade 2015-2023. The plan notes that 46% of the population was below the consumption poverty line in 2015, but this had jumped to 65% in 2022; inequality had also increased. It also shows that 37% of children under 5 years old now suffer “chronic malnutrition”.
The full Estratégia Nacional de Desenvolvimento 2025-2044 (ENDE, National Development Strategy) is on https://www.mef.gov.mz/index.php/publicacoes/estrategias/2184-estrategia-nacional-de-desenvolvimento-2025-2024/file and https://bit.ly/Moz-ENDE
With Filipe Nyusi on his way out as president, perhaps the Council of Ministers and the Ministry of Economy and Finance which coordinated the ENDE felt they could be more honest about his decade in office.
“Endemic corruption in various sectors of society jeopardises citizens’ trust and the effectiveness of governance. As a result, there is a decrease in public confidence, diversion of resources, inefficiency in public administration and reduced economic growth,” ENDE admits. And it adds that “kidnappings have become a present threat to personal security and public order.”
“Dependence on sectors such as low-productivity agriculture and the extractive industry has limited economic diversification. As a result, the country has become susceptible to external shocks, limited economic growth and a lack of innovation and competitiveness,” the ENDE says. It adds that “macroeconomic instability generated by adverse shocks has resulted in lower than expected economic growth, resulting in lower investment, higher unemployment and a reduction in the government’s capacity to finance social programmes and essential infrastructure.”
Among the “adverse shocks” was that the “the abrupt withdrawal of international partners from General Budget Support in 2015 significantly affected the funding and implementation of programmes. As a result, it has led to a reduction in financial resources for development projects, the need to reorient policies and increased dependence on limited domestic resources.” The ENDE does not say that the “abrupt withdrawal” came when the head of the IMF and ambassadors in Maputo suddenly discovered that the very top of the government had been lying to them when they said the $2bn secret debt did not exist.
The plan also points to “disparities in access to basic public services, affecting equity and social development. These disparities have been largely influenced by insufficient resources for investment, extreme weather events, the COVID-19 pandemic and rapid population growth. As a result, the population in situations of vulnerability and poverty has increased, as have regional inequalities.”
Finally, ENDE also points to “Climate change and vulnerabilities to natural disasters” including cyclones Kenneth, Idai and Freddie and to the insurgency in Cabo Delgado.
Economic diversification is essential but is not happening, says ENDE
GDP has been growing at 7% per year for two decades, yet poverty increases. Changing this requires “economic diversification”, which is not happening, admits ENDE. In 2022, 75% of the workforce was in the primary sector – agriculture and natural resources – but the dominance of low-tech farming means the primary sector is only 37% of GDP.
“The extractive sub-sector is heavily dependent on mega-projects that are not labour-intensive” and most people still depend on very low productivity farming. There is little access to inputs such as fertilizer and modern technologies, extension services are limited, and there is little agro-processing. Farming and fishing is “mainly carried out by individuals with no formal education and who have never attended school.”
ENDE does not say so, but from Europe to Bangladesh and including Mozambique neighbours Malawi and Zimbabwe, agricultural changes are dependent on subsidies and market intervention, which has never been allowed in Mozambique and are not included in the ENDE priorities. Instead ENDE sticks the old programme of development corridors without saying how they would work.
The manufacturing sector remains tiny, with little investment and poorly qualified workers. Share of the workforce in manufacturing has remained at 4%, but in the past two decades its share of GDP has dropped from 19% to 12%.
The third sector is services, transport and tourism. Share of GDP has dropped from 61% in 2000 to 50% 2022, but workforce has doubled from 9% to 20% of the total, suggesting low pay in the informal sector.
Praising health and smashing education
Improvements in health are notes by ENDE, while education is heavily criticised.
“Notable improvements in access to health services have been recorded, driven by the increase in the number of health facilities. Today, health infrastructures are closer to citizens, with around 67% of the population having access to a health facility. The population’s satisfaction with the health services provided has increased significantly, from 53% in 2014/15 to 60% per cent in 2022,” notes ENDE.
“Communicable and vaccine-preventable diseases have reduced significantly in recent decades, due to the success of prevention and treatment strategies for the main childhood diseases.” But HIV/AIS, tuberculosis and malaria “remain serious”. Infant mortality and child malnutrition remain high. “Waiting times, lack of essential medicines and medical equipment are factors in the population’s dissatisfaction with health services.
But on Education, ENDE says “the low quality of education prevents young people from having better job opportunities and limits their prospects of a better quality of life, resulting in a society with low productivity. Education indicators show that the system is unable to educate literate children and adolescents by the age of 15. In the initial years of primary education, despite improvements in learning rates, the inequalities are still great between rural and urban areas”, reports ENDE. The average pupil/teacher ratio in basic education is 64 pupils to one teacher, “which has had an impact on learning levels”.
“Worker training to ensure a qualitative and quantitative expansion of the labour supply” requires significant investment.”
Illiteracy levels remain particularly high for women (49%) compared to men (26%) and rural (52%) compared to urban (20%). “Education infrastructure, especially at pre-school and secondary school level, is still a challenge in terms of guaranteeing fair access, quality and equity in learning.”
School books are distributed free of charge but they do not reach all students. “Overcrowding in schools, reflected in the high pupil/teacher ratio, the lack of classrooms, the shortage of essential water and sanitation infrastructure in many schools, as well as the shortage of qualified teachers, represent persistent challenges in the national education system.” This results in “a high rate of school wastage expressed by the high number of dropouts, especially among girls, and high failure rates and low completion rates for each level of education.”
A high risk strategy
The ENDE ends with a set of risks. One is that “the risk of poor diversification of the economy (industrialisation, production, productivity, technology and innovation) can result from dependence on natural resources; poor agricultural performance as a source of raw materials for industry can lead to the import of raw materials, raising production costs and reducing the competitiveness and performance of national industry; structural and regulatory barriers; insufficient investment in research, technology, innovation and entrepreneurship; resistance to change; an unfavourable investment climate; low labour skills and others.”
But ENDE make several assumptions that are also high risk, but not identified as such:
+ The 20-year program will cost $264bn which will come from Mozambican government funding, foreign investment, public-private partnerships, loans, development banks, and aid.
+ GDP will grow by more than 9% per year.
+ Government income will increase from 25% of GDP to 30%.
+ Government spending will increase from 33% of GDP to 45%, which implicitly assumes changes in IMF policy.
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