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Mozambique’s Current Poverty Problem: The Latest Update

Mozambique’s Current Poverty ProblemMozambique, located between Tanzania and South Africa, has a sprawling 2,500-kilometer coastline along the Indian Ocean. Home to around 33 million people, it possesses plentiful resources like fertile land, water, energy and offshore gas. While poverty has improved over the past two decades, disease outbreaks, natural disasters and military revolts brought a setback to these gains. Here are five important facts about Mozambique’s current poverty problem that you should know:

5 Important Facts about Mozambique’s Current Poverty Problem

  1. Mozambique has an extremely low-level human capital index of 0.36. The distribution of primary education and health care in Mozambique is unequal, leading to inequality between rural and urban regions. This lack of equitable access fosters vulnerability among marginalized populations, ultimately contributing to instability and violence. According to UNICEF, only a striking 41% of children complete primary school (elementary school).
  2. More than 60% of people live in poverty. From 1996 to 2015, poverty levels were at 46.1%. Currently, the overall percentage of citizens in poverty has risen to more than 60%, and around 46% of children experience multidimensional poverty.
  3. Poverty hits girls and women especially hard. From 2019-2020, the “new poor” were young, uneducated females. The lack of empowerment among females impedes progress by resulting in unfavorable fertility levels, higher child and maternal death rates, limited skill development and poor productivity within the job market. Almost half of women, 40%, have undergone early childbearing before 18. Children in Mozambique, particularly girls, are more at risk of experiencing rights violations and violence. Additionally, women encounter obstacles when accessing income opportunities, making decisions and obtaining essential services.
  4. Mozambique is still battling with military revolts. In sections of Cabo-Delgado, a four-year military conflict with RENAMO, the political face of the Mozambican National Resistance, has resulted in 4,000 deaths and displaced almost 1 million people, with 80% being women and children. About 4 million people are frighteningly projected to encounter high levels of food insecurity, with 1.1 million people already in need of nutrition assistance and almost 1 million lacking access to safe water, all contributing to Mozambique’s current poverty problem.
  5. Mozambique has experienced several disease outbreaks. In 2022, Cholera spread rapidly. Additionally, there were reports of poliovirus detected in five areas. To combat this, Mozambique’s leadership launched a vaccination campaign focusing on children. The need for attention to immunization services is evident as around 1.1 million children currently require urgent care.

Potential Solutions in the Economy

The future of Mozambique’s economy is looking positive. Mozambique’s economy is on the rise and making strides with an offshore project in the liquefied natural gas industry already operational. Mozambique also expects to kick off larger-scale projects in 2026 and 2028. Furthermore, the World Bank predicts economic growth will accelerate 6% from 2023 to 2025.

The World Bank is playing a pivotal role by supporting the SWIOFish Project. By boosting fish stocks and cracking down on illegal practices, this project is restoring livelihoods and providing financial assistance to fishing associations in Mozambique. Women are particularly benefiting through increased access to savings, loans and opportunities for business expansion.

The progress of Mozambique’s economy is positively impacting poverty reduction efforts benefiting over 200,000 individuals — more than 40% of whom are women. Upgrades have been made to around 200 kilometers of roads, while 139 kilometers of water distribution networks have been improved. These enhancements enable farmers to access markets and provide improved water sources for over 32,000 people. All of these positive results are the consequence of The Integrated Growth Pole Project, supported by the World Bank. To further stimulate growth in Mozambique, a new project called “The Access to Finance & Economic Opportunities Project” has received approval.

Looking Ahead

Despite Mozambique’s current poverty problem, inequitable access to essential services, high poverty rates, gender inequality and an ongoing military conflict, hope is on the horizon. The beginning of the offshore LNG project and expected economic growth in the near future reflects excellent potential for the country. Furthermore, the World Bank’s backing of initiatives such as SWIOFish and The Integrated Growth Pole Project has already significantly reduced poverty. With concentrated efforts to work on these issues and help from other countries, Mozambique can prevail over its setbacks and shape a brighter future for its people.

– Elizabeth Antenucci
Photo: Unsplash

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The IFAD’s Plans for Eradicating Rural Poverty in Eritrea

Rural Poverty in EritreaEritrea, a small country in East Africa, had a staggering poverty rate of 38.9% in 2019, which is expected to decrease by only 13% by 2043. Affecting mostly rural communities, this situation is partly due to the young nation’s recent independence from Ethiopia in 1993, which led to recurrent wars, in conjunction with famine and drought. The heavy reliance on subsistence agriculture is one factor responsible for rural poverty in Eritrea. Despite the government’s efforts to address rural poverty, a shortage of resources and poorly implemented poverty alleviation programs have hindered progress. 

In 2006, the International Fund for Agricultural Development (IFAD), an agency within the United Nations that combats poverty through low-interest loans and grants, released a plan to tackle rural poverty in Eritrea. This plan was further improved and updated in 2020, aiming to create sustainable solutions by providing finance programs and projects that empower those living in poverty to overcome it.

IFAD’s 2006 Plan

The IFAD initially planned to eradicate rural poverty in Eritrea, focusing on various areas related to economic development and food security. The plan included developing export markets for livestock, fruit, vegetables and flowers, re-establishing port activities, strengthening public services for small-scale farmers to increase agricultural productivity, promoting a supportive private sector, attracting private sector investments, privatizing state-owned enterprises and developing a robust financial system. 

The strategy prioritized decentralization to improve access to services and emphasized gender equality as a crucial element in poverty reduction efforts, recognizing that households headed by women are the most vulnerable. Additionally, implementing programs that encourage wealthier households to provide loans and assistance during difficult times through asset and labor sharing has also contributed to the reduction of rural poverty in Eritrea.

Issues to Implementation

Although this plan appeared to present a solid push to eradicate rural poverty in Eritrea, many barriers hindered the application of these plans. Conflict deeply affected the country, exacerbating constraints on institutional capacity and human resources. This resulted in a scarcity of human capital to initiate and sustain new projects in these regions, despite the knowledge that these programs would offer relief. The eastern and western lowlands of Eritrea, in particular, faced severe rural poverty due to these conflicts, making social and economic improvement in these areas a top priority. Additionally, Eritrea grappled with challenges in natural resource management and lacked readily transferable technologies that could facilitate investments, management and maintenance implementation.

IFAD’s 2022 Improved Plan

The 2020-2025 plan for eradicating rural poverty in Eritrea aims to address these issues actively, maximizing the effectiveness of poverty reduction solutions. The Country’s Strategic Opportunities Programme will ensure that IFAD’s lending and non-lending support aligns with the government’s priorities, focusing on three strategic objectives: enhancing climate resilience, improving technology and infrastructure access for smallholder systems and building capacities for food security and sustainable livelihoods. These objectives are in line with IFAD’s Strategic Framework 2016-2025. 

To further alleviate rural poverty, the plan emphasizes various aspects in the agriculture and fishery sector, such as establishing a resource base, strengthening producers’ organizations, improving input delivery systems, enhancing intensification and value addition, developing institutional capacity and managing aquatic ecosystems. Additionally, IFAD’s investment portfolio in Eritrea will prioritize gender, youth, nutrition and employment opportunities for those most at risk.

Looking Ahead

The IFAD’s programs will actively contribute to reducing rural poverty in Eritrea by assisting local communities in becoming more commercial, competitive, resilient and sustainable. Sustainable development becomes achievable through the establishment of strong institutions and systems, effective policy and regulatory frameworks, enhanced production capacities and robust partnerships. Eritrea is progressing toward the goal of eliminating rural poverty, and with investments in plans like these, a poverty-free future appears to be within reach.

– Ada Rose Waga
Photo: Flickr

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Using Microfranchising to Reduce Poverty

Using Microfranchising to Reduce PovertyThe World Bank estimates that one-third of the global population resides at the base of the economic pyramid (BOP), meaning they have an income of less than $3,000 in relative purchasing power. To put this into perspective, the median household income in the U.S. was $70,748 in 2021, meaning one-third of the population earns 95% less than the average family in the US. To combat this, businesses and community organizations around the world are turning to microfranchising to bolster household incomes in developing nations.

How Microfranchising Works

According to AllBusiness, a company that provides resources to small businesses, “Microfranchising is a business model that applies traditional franchising to very small businesses.” The microfranchising model involves two parties: the franchisor and the franchisee. The franchisor owns an established business and then creates a contract with the franchisee. The franchisee is paid by the franchisor in exchange for the franchisee’s work in distributing the franchisor’s services.

The Benefits of Microfranchising

In regions with high rates of unemployment, such as South Africa and Sudan, microfranchising is invaluable. Microfranchising not only allows individuals living in these areas the opportunity to earn money, but it also teaches soft and hard skills that can be used in their own future business ventures. Coined as a “short-cut to self-employment” by Thiruchelvam at Raconteur, this opportunity is the perfect way for those who do not usually have access to information on running a business to gain experience first-hand.

Microfranchising Successes

One successful company that has utilized microenterprising is The Clothing Bank (TCB). Having been established in 2011 in Cape Town, South Africa, the company has successfully made its way onto the list of Top 100 social impact companies. The company’s model has granted over 1,000 women and men in South Africa the opportunity to buy merchandise from various retailers operating in South Africa at a discounted price in order for them to then sell this for a profit. Along with the monetary benefit of the job, individuals will receive over 1,000 hours of training over a two-year period, teaching them how to run their own businesses.

Across the Atlantic Ocean in Haiti, similar tactics are being deployed. The Social Ventures Foundation (SVF), is attempting to improve the general quality of life of Haitians with the V’ice Haiti project. With over 6 million Haitians living below the poverty line, SVF considers all aspects of livelihood. Through providing donations to V’ice, your money will go towards funding equipment that Haitians will be able to use in order to become a franchisee. For example, V’ice’s “V’ike” scheme provides self-employment to young, at-risk males by supplying them with a bike and an attached food cooler. With this, the individuals are able to distribute clean water, vitamin-infused shaved ice and much more. This is consequently decreasing the unemployment rate while simultaneously reducing the number of Haitians who are vitamin deficient — which is currently standing at a staggering 80%.

Using Microfranchising to Reduce Poverty

Many charities are now following the example set by these impressive organizations to break the cycle of poverty. With ending poverty by 2030 in the number one spot of the UN Sustainable Development goals, it will be important that more charities implement this tried and tested method for improving lives across the planet.

– Christian Vince
Photo: Flickr