Economist: Growth in Mozambican agriculture will slow to 3.5 percent a year

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Economist: Growth in Mozambican agriculture will slow to 3.5 percent a year

4:42 CAT | 29 Mar 2016

The Economist Intelligence Unit (EIU) estimates that, in the absence of measures to increase productivity among smaller farmers, the agriculture sector in Mozambique will be growing at around 3.5 percent a year by 2020, compared to the annual average of 5 percent recorded between 2005 and 2015.

In their investor bulletin, analysts explain that: “despite the fact that the expansion of commercial farms will sustain the trend of positive growth in the agricultural sector in Mozambique, intensifying pressures on land will make increasing production by simply expanding the cultivated area more difficult.”

Instead, the EIU says the best way to boost agriculture is to “improve climate resistance with improved irrigation systems and strengthened infrastructure”, but believes that “given the focus of the government on large-scale projects, progress [will be] slow”.

The EIU thinks that agriculture will continue to be “a major contributor to GDP growth between 2016 and 2020, but short-term prospects are hampered by climate shocks driven by El Niño”.

In addition to drought and heavy rains affecting Mozambique, analysts at the Economist further note the government’s “lack of commitment” to improving resilience to climate extremes, and therefore state that “the medium term evolution perspective will continue to be dependent on unpredictable rainfall”.

Foreign direct investment flows, the government’s policy agenda and international media have overwhelmingly focused on Mozambique’s gas and coal resources in the last five years, while “agriculture is still probably the most important sector of the country”.

Agriculture contributes 25 percent to GDP, employs about 80 percent of the workforce and earns 40 percent of export earnings, which is why, given the current difficulties of the international markets in raw materials, “increasing productivity in the agricultural sector has the potential to increase inclusive economic growth.”

Source: Lusa