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Mozambique: World Bank Approves US$150 Million to Improve Incomes and Resilience in the Rural Economy

World Bank
World Bank

To improve the incomes and resilience of communities in rural areas, the World Bank approved today a $150 million grant from the International Development Association (IDA)* in support of the first phase of Mozambique’s Sustainable Rural Economy Program.

To start, this first phase of a 10-year program will tackle some of the pressing challenges facing small agriculture producers and fishers as well as Micro Small and Medium Enterprises (MSMEs), while improving natural resources management practices.

“The rural space is the backbone of livelihoods for most of the population in Mozambique. It also accounts for most of the country’s poor,” noted Idah Z. Pswarayi-Riddihough, World Bank Country Director for Mozambique, Madagascar, Comoros, Mauritius, and Seychelles. “Rapid rural population growth adds an estimated 450,000 youth to the country’s workforce every year, making the focus on rural income growth imperative to promote inclusive growth and prevent conflicts.”

The project will provide support to small agriculture producers and fisheries to increase their productivity and access to markets and help MSMEs improve their sales while promoting the adoption of climate-smart agriculture practices. The program adopts a landscape approach to rural resilience, linking the support for productivity and value addition in the agriculture sector to the adoption of sound natural resource management practices on which rural production depends. Additionally, the project will invest in extension services and basic rural climate-proof transport infrastructures.

“It’s evident that economic expansion in agriculture yields the highest impact on poverty reduction in Mozambique,” added Diego Arias Carballo, Lead Agriculture Economist, and the operation’s task team leader. “However, the sector’s potential continues to be challenged by low productivity, mostly due to low technology adoption, limited provision of agricultural services, coupled with high seasonality in production, as well as increasing climate vulnerability. This project seeks to address some of these challenges.”

“Rural women in Mozambique face numerous constraints in accessing essential productive resources, services, technology, market information, and financing,” noted Franka Braun, Senior Natural Resources Management Specialist, and the project’s co-task team leader. “This project will promote gender equity in the agriculture and fisheries sectors, which would not only empower women to achieve their economic potential, but also help to reduce poverty and food insecurity in Mozambique.”

“The project will strive to enhance land, forests, and conservation areas management,” said Joao Moura, Natural Resources Management Specialist, and the project co-task team leader. “This includes improving surveillance of forests and conservation areas and supporting land use planning to inform climate smart and sustainable agricultural development.”

This operation will be implemented by the Ministries of Agriculture and Rural Development (MADER), Land and Environment (MTA) and Sea, Inland Waters and Fisheries (MIMAIP), and it is in line with the country’s priorities outlined in its five-year plan, the Bank’s partnership framework with Mozambique for FY 2017-21, as well as the new conflict-prevention and resilience-building focus of the World Bank activities in Mozambique.

* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.5 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $21 billion over the last three years, with about 61 percent going to Africa.

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