Mozambqiue development cooperation with World Bank
Development Cooperation Between Mozambique and the World Bank : History
The World Bank stands as one of Mozambique's most significant development partners, providing loans, grants, and technical assistance aimed at addressing critical challenges such as poverty, infrastructure deficits, climate vulnerability, and governance issues. Through its International Development Association (IDA), the World Bank supports Mozambique's development goals with a focus on inclusive growth, human capital, and resilience. This analysis delves into the history of World Bank cooperation with Mozambique, tracing its evolution and current programs as of 2025, while highlighting their impact and associated critiques.
Early Engagement (1980s–1990s)
Mozambique's engagement with the World Bank began in the 1980s, shortly after gaining independence from Portugal in 1975, during a period marked by civil unrest that lasted until 1992. The early cooperation primarily aimed at post-conflict reconstruction and economic stabilization. In the late 1980s, the World Bank introduced Structural Adjustment Programs (SAPs) under the Economic Rehabilitation Program to combat hyperinflation—which had reached an alarming 163% in 1987—and fiscal deficits. These programs promoted market-oriented reforms, including privatization and trade liberalization. Following the 1992 peace agreement, the World Bank committed to infrastructure rebuilding initiatives, including the First Roads and Coastal Shipping Project, which aimed to improve transport networks. While these SAPs helped stabilize the economy—bringing inflation down to 17% by 1996—they drew criticism for exacerbating inequality and neglecting social services, as evidenced by a poverty rate of 69% in 1995.
2000s: Poverty Reduction and Sectoral Investments
In the 2000s, Mozambique faced significant challenges such as natural disasters, including devastating floods, which led the country to qualify for the Heavily Indebted Poor Countries (HIPC) Initiative. This period marked a renewed focus on poverty reduction and debt relief, aligning with Mozambique's Poverty Reduction Strategy Papers (PRSPs) that emphasized human development and infrastructure investments. Key programs included the Education for All Fast-Track Initiative, which improved primary school enrollment from 60% in 1997 to 85% by 2005, and the Health Sector Recovery Program, enhancing rural healthcare access and reducing child mortality rates. Infrastructure projects such as the Second Roads and Bridges Management Project rehabilitated over 1,000 kilometers of roads, facilitating trade and rural connectivity. The debt relief efforts under HIPC and the Multilateral Debt Relief Initiative facilitated the cancellation of approximately USD 4.3 billion in debt by 2006, allowing for increased social spending. As a result, poverty rates fell to 54% by 2008, with GDP growth averaging 7% annually during the decade. However, governance weaknesses continued to impede inclusive growth, particularly in rural areas.
2010s: Growth Amid Challenges
The discovery of natural gas reserves in the 2010s fueled rapid economic growth, averaging 7.4% annually from 2010 to 2014. However, this growth was overshadowed by the 2016 "hidden debt" scandal involving undisclosed loans totaling USD 2.2 billion, which led to a suspension of World Bank budget support. The impacts of Cyclones Idai and Kenneth in 2019 further strained the nation's resources. During this period, the World Bank initiated several programs, including the Sustenta Program that integrated smallholder farmers into value chains, supporting around 100,000 farmers by 2019. The Mozambique Energy for All Project focused on expanding electricity access, increasing coverage from 31% to 40% by 2019 through off-grid solar solutions. Following Cyclone Idai, the World Bank provided significant funding to rebuild infrastructure and support recovery efforts for the affected population. Despite these advancements, the hidden debt crisis led to an economic downturn, with growth falling to 3.7% in 2016 and underscoring the risks inherent in governance.
2020s: Resilience and Recovery
In the 2020s, Mozambique faced new challenges, including the COVID-19 pandemic, the ongoing insurgency in Cabo Delgado, and climate-related shocks such as Cyclone Chido in 2024. These situations necessitated a renewed focus on resilience, economic recovery, and social protection. The World Bank resumed broader support after 2016 in alignment with the IMF's Extended Credit Facility, which commenced in 2022 and continues through 2025.
By 2025, the World Bank's active portfolio in Mozambique had expanded to 37 projects worth USD 5.7 billion, reflecting increased investment in climate initiatives, health, and agriculture. The Country Partnership Framework (CPF) for 2023–2027 highlights human capital, sustainable economic opportunities, and resilience, with planned IDA commitments totaling USD 3.2 billion. Governance reforms also gained momentum, with support for fiscal transparency and effective debt management restoring donor confidence following the post-hidden debt crisis resolution, including a USD 142 million settlement in 2024.
Summary
In summary, the historical cooperation between the World Bank and Mozambique has evolved significantly, addressing multiple aspects of the country's socio-economic landscape. While achievements in poverty reduction, infrastructure development, and governance reforms are notable, ongoing challenges remain that require continued attention and collaborative efforts for sustainable growth and development.
Current Programs (2025)
The World Bank's current programs in Mozambique, funded primarily through IDA grants and concessional loans, address structural challenges and align with national priorities (e.g., the 2025 Economic and Social Plan and State Budget). Below are the key programs, their objectives, and impacts:
Agriculture and Food Security:
Sustenta Program (2016–ongoing, USD 500 million):
Objective: Integrates 200,000 smallholder farmers into agricultural value chains by providing training, inputs, and market access, focusing on crops like maize, cashews, and cotton.
Implementation: Partners with the Ministry of Agriculture and Rural Development, covering provinces like Nampula and Zambézia.
Impact: Increased farmer incomes by 30% on average and created 50,000 jobs by 2024. Supports food security in a country ranked 106/116 on the Global Hunger Index.
Mozambique Agriculture and Rural Development Program (2023–2028, USD 300 million):
Objective: Enhances climate-smart agriculture and rural infrastructure (e.g., irrigation systems) to boost productivity and resilience.
Impact: Targets 500,000 farmers, with early results showing a 15% rise in crop yields in pilot areas by 2025.
Health and Human Capital:
Mozambique Primary Health Care Strengthening Program (2020–2026, USD 200 million):
Objective: Improves maternal and child health services, addressing high maternal mortality (308 per 100,000 births) and child stunting (43% of children under 5).
Implementation: Supports 1,000 health facilities, trains 5,000 health workers, and expands vaccination coverage.
Impact: Reached 2 million beneficiaries by 2024, reducing under-5 mortality by 10% in targeted areas.
Education for All Program (2022–2027, USD 250 million):
Objective: Increases access to quality primary and secondary education, particularly for girls, and improves teacher training.
Impact: Enrolled 1.5 million students and constructed 2,000 classrooms by 2025, though quality gaps (31.4% youth illiteracy) persist.
Energy and Infrastructure:
Mozambique Energy for All Project (2018–2026, USD 400 million):
Objective: Expands electricity access to 70% by 2026 through grid extensions and off-grid solar systems, targeting rural areas.
Implementation: Partners with Electricidade de Moçambique (EDM) and the Energy Fund (FUNAE).
Impact: Raised access from 31% in 2018 to 60% in 2024, connecting 1 million households, but rural access remains below 30%.
Regional Transport Corridors Project (2021–2027, USD 350 million):
Objective: Upgrades 1,500 km of roads and bridges along the Maputo and Beira corridors to boost trade and regional integration.
Impact: Reduced transport costs by 20% in targeted areas, supporting exports like aluminum (USD 1.28 billion in 2023).
Climate Resilience and Disaster Management:
Mozambique Disaster Recovery and Resilience Project (2019–2025, USD 600 million):
Objective: Rebuilds infrastructure and strengthens early warning systems post-Cyclones Idai and Kenneth, extended to cover Cyclone Chido (2024).
Implementation: Works with the National Institute for Disaster Management (INGC), supporting 1.5 million affected people.
Impact: Restored 500 schools and 200 health facilities, reducing economic losses from disasters by 15% in targeted regions.
Climate Change Development Program (2023–2028, USD 250 million):
Objective: Integrates climate resilience into public investments, supporting coastal protection and sustainable land management.
Impact: Protects 300,000 coastal residents and improves land use for 100,000 farmers, guided by the 2024 Country Climate and Development Report.
Social Protection and Governance:
Social Protection and Jobs Program (2021–2026, USD 150 million):
Objective: Expands cash transfers and job training for 1.2 million vulnerable households, targeting women and youth.
Impact: Reduced poverty severity by 8% in program areas, though coverage gaps remain in rural zones.
Public Financial Management and Governance Project (2020–2025, USD 100 million):
Objective: Enhances fiscal transparency, tax administration, and debt management post-hidden debt crisis.
Impact: Increased domestic revenue by 2% of GDP and supported hidden debt settlements (e.g., USD 142 million in 2024).