Mozambique: Promoting agriculture speeds up end of poverty – World Bank

Login

Register

http://www.clubofmozambique.com/

Mozambique: Promoting agriculture speeds up end of poverty – World Bank

9:22 CAT | 27 Jun 2022

File photo: Lusa

The World Bank has said that promoting agriculture is the fastest way to overcome poverty in Mozambique, given its economic potential and in light of a global scenario in which there are several threats to growth, reads the institution’s latest report.

“Agricultural growth would reduce poverty and inequality three times faster than growth in any of the other sectors,” the organisation said in the eighth edition of the report on economic activity in Mozambique, published on Thursday.

The statement comes at a time when – for at least a decade – the country’s expectations are for growth based on the Rovuma gas reserves – which start being tapped this year.

Agriculture remains undeveloped, the World Bank notes. “Despite its potential, agricultural productivity remains low by regional standards, with Mozambique having one of the lowest cereal yields per hectare, for example,” the document said.

In other words, “with adequate support, agriculture can be a sustainable source of growth, poverty reduction and food security.

The World Bank suggests that four measures should be taken .

Firstly, “shifting agricultural support to public goods and services such as rural infrastructure, animal and plant health services, and agricultural research” can provide higher income to the sector.

It also advocates “full participation in regional free trade agreements” to stimulate the sector’s competitiveness.

The World Bank also considers it necessary to “reduce implicit taxation on food and increase support for food food-insecure households” and create “smart subsidies” by rewarding innovative projects.

READ: Mozambique Economic Update: Getting Agricultural Support Right – World Bank

The World Bank expects economic growth to “accelerate in the medium term” in Mozambique, “reaching an average of 5.7% between 2022 and 2024”, and believes that the scenario could be even more sustainable if there was the agricultural focus it suggests.

For now, the growth that the institution foresees is based on “the start of production of liquid natural gas (LNG)” off Cabo Delgado, scheduled for this year, and “the expected restart of larger LNG projects” onshore – suspended a year ago following armed attacks in the province.

The report points to a “recovery in global demand and commodity prices” to “support export growth” in Mozambique.

This growth associated with the entry of foreign capital, mainly linked to LNG, “will support investments,” it said.

ALSO READ: Mozambique’s cooking oil imports cost $74 million in Q1

World Bank sees Mozambique economy growing 5.7% on average between 2022 and 2024

The agreement with the International Monetary Fund (IMF) announced this year to run until 2025, and “budgetary support from other development partners, will further help to strengthen economic recovery, whilst addressing debt and financing constraints. On the risk side, there are three “substantial” threats.

Rising import prices due to the conflict in Ukraine, new waves of Covid-19 and insurgency in the northern part of the country could put a brake on growth, the World Bank warned.

Source: Lusa