BERF’s Work in Mozambique

DFID Mozambique has been a significant client for BERF.  Following a scoping study early in 2016, a range of interventions were identified.  These have included work across three of the work streams of BERF.  Under Evidence and Learning we have completed a study on what works in Business Environment Reform in Sub Saharan Africa and South Asia.  Under Technical Support, we have undertaken Diagnostic Studies in the areas of Youth, Forestry, and Renewable Energy with further work planned for Agriculture and Construction.  Under Stakeholder Engagement we have undertaken scoping reviews for two Business Membership Organisations and hope to undertake further implementation support.

Completed Projects

Mozambique:  Innovative Stakeholder Engagement for Two Business Membership Organisations, December 2016

Context

Mozambique with a population of nearly 28 million has a relatively high rate of inequality and poverty.  According to the international poverty line the poverty rate was around 69% in 2008, but there has been rapid economic growth since around 1995 (average 8.5% a year from 1995 – 2015), leading to rapid increases in per capita incomes. Despite the rapid economic growth, the country remains relatively poor and requires economic growth to reduce poverty further.

DFID Programme

DFID Mozambique’s key strategic priorities in the Operational Plan 2014 centre around three interrelated themes that aim to help Mozambique to deliver inclusive growth and poverty reduction.

(1) Governance and State Capability: DFID focuses on strengthening government systems, policies and implementation to enable natural resource revenue to deliver development gains. Support to civil society aims to strengthen transparency and accountability. DFID works in municipalities to support more competitive politics and responsive models of governance.

(2) Economic Development and Growth Transmission: DFID promotes more inclusive growth by supporting diversity beyond the natural resource sector. There is a focus on Micro, Small and Medium Enterprises in labour intensive sectors across a range of issues. These include access to finance, land/property rights, and seeking to leverage foreign investment to link natural resource companies to local suppliers, support regional trade and develop broader corridor development.

(3) Human Development:  DFID is aiming to build human capital through improvements in basic services, including in health, family planning, education and water and sanitation. DFID supports an emphasis on service quality, including through testing new approaches and using UK influence to ensure central investments through multilaterals are effectively targeted; supports evidence building; and works on increasing the demand for effective, inclusive services.

World Bank Doing Business

Mozambique’s World Bank Doing Business indicator position fell 3 places – to 137 – between 2016 and 2017.  The business environment is only slightly better than the average for Sub-Sahran Africa.  The Doing Business 2017 report references improvements in access to credit through the passing of legislation allowing the establishment of a credit bureau, but conversely a worsening situation for starting a business as a result of increased fees.