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Published On: Mon, Jan 2nd, 2017

Results of Poverty Elimination in Mozambique Lagging: World Bank

nsnbc : A report released by the World Bank notes that poverty in Mozambique has fallen but doesn’t benefit everyone and is lagging about 50 percent behind sub-Saharan standards. That said, the proposals that usually follow along with World Bank “pundits” aren’t necessarily aimed at empowering Mozambique or Mozambicans.

NORTH-SOUTH_ROAD_MOZAMBIQUEThe report shows that poverty in Mozambique fell from 69.7 percent in 1996 to 46.1 percent in 2015. However,  for each percentage point of economic growth between 1996 and 2009, poverty only reduced by 0.26 percentage points. The report, entitled Accelerating Poverty Reduction in Mozambique: Challenges and Opportunities recognizes a modest reduction of poverty but underpins that it hasn’t benefitted everybody.

The report points out that inequality remains high and has reduced the potential for economic growth to generate significant gains in reducing poverty. More than two million Mozambicans could have been lifted out of poverty had the economic growth created between 1997 and 2009 been more equally shared, notes the World Bank.

The World Bank also found that poverty remains much higher in rural areas and is becoming geographically concentrated in some provinces. Contrary to national trends, poverty increased in the 2000s in Zambezia, Sofala, Manica, and Gaza. Jointly with Nampula, these provinces account for 70% of the poor, up from 59% in 2002-03. Especially, Zambezia and Nampula are home to 38% of the population, yet nearly half of the poor live in these two provinces. Moreover, in the last 20 years poverty reportedly fell by over 70% in the south, as n Maputo City and Province, while it fell less than 20% in the north as in Nampula and Zambezia.

The report points out that the fact that most of the population is disconnected from the growth process and low accessibility to and participation in markets explain up to 70% of the differences in changes in poverty rates between the lagging provinces and the rest of the country.

There is a lack of access to basic services, lack of access to the ability to invest in human and physical capital, access to markets and economic opportunities constrains most of the population and prevents it from contributing to and benefit from economic growth, noted the World Bank. In 2014-15, more than half of the people aged 20 to 30 in the poorest provinces were illiterate.

Another one of the problems identified in the report is that only 8% and 4% of rural households have access to electricity and sanitation, respectively.  Even when Mozambicans in the more isolated areas such as Nampula and Zambezia have managed to accumulate physical and human capital at a faster pace, they are unable to put them to good use and earn fair returns.

The report also underpins that higher productivity and better connection to markets can lead to real improvements in poor people’s livelihoods. That World Bank model, however, isn’t being uncritically endorsed by some who point out that GDP and access to nation-wide or global markets doesn’t necessarily equates to wealth or well-being. Local and farmers’ markets and local-based, decentralized production can do a great deal to mitigate poverty without falling into slavery of transnationals, say some analysts who are skeptic with regard to World Bank policies.

That said, the report notes that the agriculture’s potential to drive poverty reduction is dampened due to low productivity, for example maize yields average one ton per hectare compared to 3.8 in South Africa and 2.2 in Malawi, low utilization of inputs and technology, less than 3% of farmers use fertilizers, and limited connectivity and commercialization, eight in 10 farmers are disconnected from reliable all-weather road networks and do not sell part of their production.

The report notes that a Mozambican farmer that employs fertilizers can profit from yields that are up to 40% higher compared to a farmer that doesn’t. Similarly, farmers that sell part of their produce, on average, record yields that are 25% higher relative to those engaged in subsistence farming. In World Bank terms, “fertilizer” generally means chemical fertilizer, produced at centralized production sites. While that could be consistent with the country’s development of gas resources, and yields the possibility to produce fertilizer domestically and for export, others would note that empowering local communities by locally organized “organic” fertilizer production could be more beneficial for the people as well as for the environment and the country’s economy. The World Bank sweeps alternative models under the rug by merely pointing out that adoption of productivity enhancing technologies in the agricultural sector is low.

The report points out that accelerating poverty reduction also requires protecting vulnerable populations from the effects of extreme weather. Three in four farmers in Mozambique report losing part of their crops, animals or other equipment due to climatic shocks. A child born in a place affected by severe floods, like the ones that hit the country in 2000, is more likely to be undernourished, drop out of school, and not participate in the labor market later in life than a child raised under normal weather conditions. While the World Bank correctly identifies these problems, the solutions that the Bank, generally speaking, would finance, are not necessarily the most suitable.

Mitigating flood risk by shoring in rivers has proven notoriously ineffective and detrimental to the environment, even in Europe, where vast sums have been spent on reestablishing old river beds, on subsidizing farmers for leaving the environment close to river banks and creeks intact, and to preserve nature. Surely Mozambique could find a compromise between environmental piracy capitalism as generally proposed by World Bank “pundits” and a way to relocate, where necessary, and to let the environment work for instead of against the people. Wetlands and flood plains are generally extremely fertile, extremely productive, just often not for crop that is sellable on the transnational markets, and moreover, the development of tourism could be a true resource in a Mozambique, was it not plagued by a de-facto civil war.

F/AK – nsnbc 02.01.2012

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