世界发展银行-Mozambique-2021-Systematic-Country-Diagnostic---Coming-Together-for-a-Better-Future_100页_2mb

Summary of the 2021 Systematic Country Diagnostic (SCD) for Mozambique

Core Content

The 2021 Systematic Country Diagnostic (SCD) for Mozambique highlights the country's challenges and opportunities in the context of economic development, social inclusion, and institutional reform. It reflects on the progress made since the 2016 SCD and outlines the new challenges that have emerged, particularly due to the hidden debt crisis, natural disasters, and an insurgency in the Northern State of Cabo Delgado.

Main Views

Economic Performance and Debt

• Mozambique's economic growth has declined from an average of 8% between 2001 and 2015 to 3% between 2016 and 2019.
• The country contracted for the first time in three decades in 2020 due to the impact of the COVID-19 pandemic.
• Public debt reached 122% of GDP in 2020, and the country's ability to achieve debt sustainability depends on the LNG boom and its associated revenues.
• The low growth performance has limited the fiscal space available for public investment and has exposed the need for more efficient public spending.

Governance and Institutional Challenges

• The hidden debt crisis in 2016 damaged Mozambique's reputation for sound economic management and led to a decline in governance ratings.
• The country faces significant institutional challenges, including weak macro-fiscal frameworks, limited transparency, and inefficiencies in public investment and procurement.
• The insurgency in Cabo Delgado threatens the LNG projects and the stability of the region, putting progress at risk.

Human Capital Development

• Mozambique ranks among the countries with the lowest human capital in the world, according to the Human Capital Index (HCI).
• The country has made some progress in life expectancy and primary school enrollment, but malnutrition, weak education outcomes, and poor health conditions continue to hinder productivity and long-term growth.
• The Gross Enrollment Rate (GER) is low, with more than half of girls dropping out of school by the fifth grade.
• The Human Opportunity Index (HOI) and adult survival rate are also among the lowest globally, indicating deep structural issues.

Social Protection and Safety Nets

• Mozambique's social protection spending is only 0.62% of GDP, which is half the average for African countries.
• The PASD and PSSB programs are important tools for improving social inclusion, but they are underfunded and inefficient.
• The Proxy Means Test (PMT) and Household Budget Survey (IOF) are used to identify the poorest households and target social assistance, but the lack of proper identification for six out of ten citizens limits the effectiveness of these programs.

Natural Capital and Sustainability

• Mozambique's agricultural productivity is among the lowest in the region, with limited use of modern inputs, extension services, and credit.
• Natural capital is underutilized and overexploited, with weak institutions and regulation leading to unsustainable exploitation of natural resources.
• The country has high vulnerability to climate shocks and low readiness to manage them, with weather shocks reducing agricultural output and household expenditures.
• The Sustainable Development Goals (SDGs) have been delayed due to the impact of the pandemic and natural disasters.

Private Sector and Productivity

• The private sector is underdeveloped, with informal firms dominating and limited capacity to create wage-based jobs.
• Foreign Direct Investment (FDI) has historically focused on mega-projects, which have fueled growth but not employment.
• Productivity remains low, and Total Factor Productivity (TFP) is a key area for improvement.
• Public-Private Partnerships (PPPs) and reforms to the regulatory environment are needed to improve the enabling environment for private sector growth and trade.

Regional and Sectoral Disparities

• Economic activity is concentrated in the South, leading to regional disparities.
• Rural poverty remains high, with 80% of poor people living in rural areas.
• Infrastructure gaps are significant, especially in rural areas, and transport costs are higher in isolated regions.
• Agricultural value chains are underdeveloped, and market access is limited for smallholder farmers.

Key Information

• Currency: MZN (New Mozambican Metical), with US$1.00 = MZN 63.63 (as of August 4, 2021).
• Fiscal Year: January 1–December 31.
• Key Constraints:
  • Governance and Institutional Weaknesses
  • Low Productivity and Limited Job Creation
  • Weak Social Protection and Human Capital Development
  • Vulnerability to Natural Disasters and Climate Shocks
  • Fragmented and Inefficient Public Investment and Procurement
  • Insurgency in Cabo Delgado
• Policy Priorities:
  • Strengthening governance and accountability
  • Enhancing public investment management
  • Promoting private sector growth and productivity
  • Improving human capital and skills development
  • Building climate resilience and social safety nets
  • Advancing fiscal decentralization and local accountability
  • Addressing gender disparities and child marriage

Conclusion

The 2021 SCD underscores the need for a more inclusive and resilient recovery from the economic and social shocks of the past five years. It calls for a "Coming Together" approach across different sectors and levels of government to ensure sustainable growth, equitable development, and social cohesion. The country's path forward is closely tied to the management of natural resources, strengthening institutions, and enhancing the enabling environment for private sector growth.