Mozambique has potential for increased agricultural production but faces obstacles. Only 7% of land is cultivated and agricultural productivity is low, contributing to high rates of undernutrition (25% of the population) and child mortality (45% of under-five deaths). To reduce poverty and malnutrition, Mozambique needs more investment in agriculture. However, farmers face limited financial services, poor infrastructure, low education, and vulnerability to weather. A proposed solution is to invest in basic infrastructure through public and private sectors. Microfinance should also be expanded to help farmers grow their businesses, while education and training can improve agricultural expertise. Creating a transparent and improved business environment could further attract foreign investment.

1. Development Finance Impact
Project
Laura Zagrebelsky
2017

2. Topic
Propose a financing solution that will increase private
and/or public finance for development in a country of
your choosing that uses the IDA PSW

3. Country of Analysis
• Mozambique

4. What is the problem?
• Mozambique is a country that could increase tremendously
agricultural production however at this time:
• Only 7 % of the total area of the country is cultivated
• Agricultural production is largely rainfed and has a low productivity
• 25% of the population is undernourished (FAO 2016)
• UNICEF estimates that 45% of deaths among children under-five in
Mozambique is linked to malnutrition.
• Mozambique’s annual growth has averaged 7% over the past two decades,
but the country’s rapid economic expansion has had only a moderate impact
on poverty reduction.

5. Why actors should invest in Agriculture in
Mozambique?
• Government: Increases agricultural production is crucial element to
decrease poverty, malnutrition and diseases.
• ODA: Mozambique ranked 178th out of 187 countries in the most
recent Human Development Index (HDI).
• Private sector: agriculture is a potentially profitable sector in
Mozambique:
• Large part of the territory is still not cultivated
• The Government of Mozambique is willing to focus on Agricultural
productivity

6. Obstacles
Limited financial services to
farmers
Poor infrastructure in the
agricultural sector
Low education and
technical expertize of
farmers
Mozambican
agriculture suffers a
high vulnerability to
weather.
The agricultural
economy is still
heavily subsistence-
oriented

7. How to overcome these obstacles?
Mozambique needs to
invest in basic
infrastructure (private
sector can have an
important role);
Micro-finance should
be developed and
expanded to help
farmers to extend
their business;
Education and
increased know how
should archived
through courses to
improve the quality of
the labor force
Micro-finance should
be developed and
expanded to help
farmers to extend
their business;
Transparent and improved
business environment
through better regulations
and effective
implementations to attract
more foreign businesses.