1) Mozambique is a low-income country located on the east coast of Africa with over 2,600 km of coastline. The northern region, including Niassa Province, has experienced higher economic growth than the central and southern regions. 2) Niassa Province is the largest province in Mozambique, with an area of nearly 129,000 square km. Agriculture is the main economic activity, contributing on average 36% of GDP. However, only 2.4% of arable land is used for agriculture. 3) Infrastructure development is needed to integrate economic sectors and promote sustainable development in Niassa Province. However, current requirements for infrastructure projects to obtain approval based on expected returns are difficult to meet

1. Scalling-up an integrated development
Table 1 - Map of Mozambique
Mozambique isa low-incomecountryinthe Sub-Saharanregion locatedineastcoastof Africa,the
longeststretchof IndianOceancoastline inAfricawith anextensionof 2600 km1
from Tanzaniato South
Africacovering7 provincesonthe coast out of 10. For Rosimina,Ali (2009)2
,Mozambique hasdifferent
levelsof developmentbetweenthe regions,where the southinequalityincreasesfromsouthtothe
north.Thus,basedon Gianni coefficientevaluation,national economicinequalitysufferedareduction
from0.35 in1996, to 0.30 in 2006. In the periodthe northregionhas sufferedthe biggestincrease
(391.%),againstnorth (anincrease of 208.3%) and south(2.3%).
1 In http://www.mozambique.co.za/Mozambique_Travel_Articles-travel/mozambique-coast.html, accessed on
March,the 30th
22 In http://www.iese.ac.mz/lib/publication/II_conf/CP2_2009_Ali1.pdf,accessed on March,the 30 th

2. Table 2 - Map of Niassa Province
For CPI(2016)3
, Niassaprovince,inthe northregion,isthe biggestprovince inthe countrywithnearly
129 thousandkm2,
comprisedwith16 districtsLago,Sanga,Chimbunila,Lichinga City,Ngaúma,
Mandimba,Mavago, Muembe,Mecula,Majune,MarrupaCuamba, Metarica, Maúa, Nipepe and
Mecanhelas),39 AdministrativePosts,79Localitiesand5 Municipalities(Lichinga,Cuamba,Marrupa,
Metangulaand Mandimba). The populationamountat1.696.906 inhabitantsasper2014 census.
Accordingto MalondaFoundation4
,Niassaeconomyispredominatelyagricultural,contributingon
average 36% of GDP, constitutesthe mainsource of employmentandsubsistence anditspracticedon
merely2.4%of the 12.3 million hectaresof arable landexistinginthe province.Together,agriculture,
forestry,andlivestockcontribute more than80% of Niassa’sGDP. Macro-economicindicatorsof Niassa
province are shownbelow:
Year 2009 2010 2011 2012 2013 2014 2015
GDP (10^6
USD) 293,8 297,5 427,4 437,9 492,2 533,5 390,8
GDP contriution(%) 3.10% 3.10% 3.20% 3.20% 3.10% 3.10% 3.20%
GDP per capita 277.9 218.9 302 297.4 316 332.1 235.8
Table 3 - Niassa province macroeconomic indicators (source: CP5I, 2016)
3 In https://www.cpi.co.mz/assets/brochura_niassa_print_semmarcos.pdf,accessed on March, the 30th
4 In http://www.malonda.org.mz/index.php?option=com_docman&task=doc_view&gid=13&Itemid=10&lang=pt,
accessed on March, the 30th
5 CPI (2016), Book of Opportunities,Niassa Province,Lichinga

3. Althoughits economicpotential,Niassaeconomystill performingveryfairbelowitspotential.
Opportunitiestoinvestinthe province range fromagro-industry,aquaculture andfishfarming,energy,
industryandtrade,tourismandpublicworksand housing.However,there’sabiggap intermsof infra-
structure to develop,integrate andpromote linkage betweenthosevalue chainonasustainable
developmentlongrun.
Infra-structure isanenablingfactorof developmentandintegrationof economic sector,amultiplication
factor (catalyzer) of development andyeta viable wayto enhance economicactivity (efficiency-driver)
of the province andthuspromotingthe businessenvironment whichiscurrentlyperformingverylow
due to the highcost of doingbusinesslocally. Consideringthe geo-strategicpositionof Mozambique,
infra-structure wouldpromotebothhorizontalandvertical integrationrespectivelysea-hinterlandand
value chainproduction.
Accordingto National RoadsAdministrationguidelines, infra-structuresprojectsrequiresforits
approval,throughoutconcessional credit withState guarantee,more thantechnical andspecific
requirements,those of economicandfinancial nature tobe consideredfeasible,aminimumIRRof 11%
for a longtermoperationfrom15-25 years.Thisrequirement ishuge capstone forthose roadprojects
withouta tool gate (due to the lowpowerpurchase andhighpoverty),whichwouldbe the mainsource
of revenue againstthe heavyweightof financial costsandoperations.Anotherissuewhichderivate
fromthe nature of thiseconomic-financialindicator,isthe factthat thismethodology doesn’tcapture
the potential socio-economicbenefitsbasedonthe rootsof the project and/ortransversal benefitsfrom
othereconomicactivities,callingformore specificrequirementsadjustedtothe nature andconditionof
each case.
Veryrecently,countryfacesausterityof publicexpensesdue tohighdebtconsequentlythe annual
budgetwasseverallyreducedwithexceptiontosocial activitiesonsectorsaseducation,healthand
social care.This situationleadtodefaultonmaturityof publicdebtwithexternal creditors,afterits
creditratingbeendowngradedtotriple C’sbyS&P,Caa3 byMoodys andCC by Fitch.
In thiscontext, aMDB approach ismore likelyfinancingsource whichmatchthe specificationsof this
kindof finance needwithimpactonbothcountryand sectorlevel. The role of regional MDBas African
DevelopmentBankand/orIDA wouldbridge the participationof both private andpublicsector.Their
experience, technical assistance andknow-how,are keyfactorstocrowdfinance andboostthe
reliabilityof the projectsonpursuingbillionstotrilliontarget. A massive participationof the private
sectorand itsrisk-returnapproach,asthe mainactor of the economicactivity,wouldbe anefficiency-
drive factorto assure the sustainabilityof the project.