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After cyclones, conflicts and Covid-19, Recovering Mozambique prepares the next five-year strategy

By on June 4, 2022 0

The national economy is beginning to recover from the economic contraction seen in 2020 and has attracted greater volumes of domestic and foreign investment, Mozambique’s finance minister said.

The African Development Bank has launched preparations for its next five-year strategy for Mozambique after a challenging period that included cyclones, security challenges and the Covid-19 pandemic.

The African Development Bank, in coordination with the Ministry of Economy and Finance of Mozambique, organized a workshop on May 12, 13 and 16, 2022 on the completion report of the Bank’s 2018-2022 Country Strategy Paper , which will detail the results of the strategy. The event also covered the new Country Strategy Paper 2023-2027 and a review of the Bank’s project portfolio in Mozambique. The event was attended by National Director Cesar Augusto Mba Abogo, National Director of Public Debt, Isabel Sumar, and Ester José Santos, Deputy Director at the Ministry, and was attended by around 80 participants, consisting of implementation staff the project, executing agencies and staff from the Ministry of Economy and Finance, the Bank of Mozambique, the Administrative Court and the African Development Bank.

Speaking on the third day of the workshop, the Minister of Economy and Finance, Ernesto Max Elias Tonela, said the national economy was beginning to recover from external shocks and the economic contraction seen in 2020. “The country has experienced considerable macroeconomic and political stability, which has attracted greater volumes of domestic and foreign investment, including the valuable contribution of the African Development Bank. I would like to reaffirm our commitment to strengthen cooperation with the African Development Bank,” the minister said. He said the government’s strategy was in line with the pillars jointly defined with the African Development Bank for Mozambique.

According to the African Economic Outlook 2022, Mozambique’s economy is gradually recovering from the impact of Covid-19 and the conflict in its Cabo Delgado region. Gross domestic product grew by 2.2% in 2021 against a contraction of 1.2% in 2020, helped on the supply side by the recovery of agriculture and mining, and on the demand side by the exports and public spending, according to the report published by the African Development Bank on May 25. Gross domestic product growth is expected to exceed pre-pandemic levels by 3.7% in 2022 and 4.5% in 2023, driven in part by mining projects.

During the Covid-19 pandemic, the African Development Bank helped Mozambique reduce the impact of the virus, including $42 million in emergency budget support to strengthen health systems, expand social security and help the private sector. During the 2018-2022 period under review, the country also faced security challenges and devastating cyclones.

Cesar Mba Abogo, Mozambique country director for the African Development Bank, said the evaluation of the previous country strategy should take into account the diversity of experiences.

“The evaluation should also celebrate Mozambique’s resilience, as the 2018-2022 period was certainly traumatic, but rest assured that the Bank remains engaged with the government and people of Mozambique to address these shocks. A rigorous assessment of achievements The CSP 2018-2022 and the identification of strategic and operational lessons learned will help us better address the challenges ahead to drive an inclusive, equitable and sustainable economic recovery,” said Mba Abogo.

Mozambique’s 2018-2022 Country Strategy Paper was based on two pillars: infrastructure development to enable transformative and inclusive growth and job creation; and agricultural transformation and value chain development. Governance, climate resilience and gender equality received particular strategic attention.

The African Development Bank’s combined active portfolio in Mozambique comprises 22 projects with a commitment of over $1.05 billion, which is the second largest in the Southern region and the fifteenth largest in Africa.