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Eliminating Poverty: Update on SDG 1 in Mozambique

Eliminating Poverty in MozambiqueLocated on the southeastern coast of Africa, Mozambique is home to approximately 29.5 million Mozambicans. With a 52% female and 48% male population growing at a rate of 2.5%, high child mortality rates, increased 12.6% HIV prevalence, low life expectancy and low literacy rates, Mozambique is struggling with most of the U.N.’s Sustainable Development Goals (SDG). Mozambique ranks 136 of the 162 countries measured by the Sustainable Development Index. The first SDG is eliminating poverty in Mozambique.

Poverty in Mozambique

According to Mozambique’s Household Budget Survey, 46.1% of the population lives below the poverty line. There exists multidimensional poverty measured by the quality of family, nutrition, education, work, health, sanitation and hygiene (WASH), resulting in 46% of children 17 years and below living in poverty.

The country’s location makes it vulnerable to many natural disasters that often stunt its economic growth, making it difficult to eliminate poverty in Mozambique. Mozambique faces a combination of tropical and dry climates, an abundance of natural resources ranging from renewable energy sources to agro-ecological regions, forests and wildlife. The Gross Domestic Product (GDP) growth rate fell from 7.4% to 3.7% between 2007 and 2017 as a result of drought, flood and cyclone natural disasters.

Barriers to Eliminating Poverty in Mozambique

The recent COVID-19 pandemic has brought an additional burden to Mozambique, coming just as the country was recovering from major economic shocks related to its recent debt crisis and the devastating 2019 cyclones. Since the onset of the pandemic, Mozambique has already experienced a 4% decline in its economic growth expectations with significant adverse effects on its already struggling economy. Mozambique is expected to feel the lasting effects of this shift in the coming years, facing even larger external and fiscal financing gaps than previously anticipated. Further, there is concern that large numbers of Mozambicans are on the verge of re-entering poverty, erasing much past progress and setting the country back on the SDG to eliminate poverty.

One of the main barriers to eliminating poverty in Mozambique is its long-standing exclusion regarding gender and other vulnerable groups and regional public policy imbalances. In order to have sustainable poverty reduction, Mozambique must give special attention to eliminating these key issues.

Current Efforts and Solutions

The Nation Basic Social Security Strategy (ENSSB) was developed to help achieve the government’s five-year plan (2015-2019) to implement actions aimed at reducing poverty and vulnerability. Between 2016 and 2024, it seeks to ensure impending economic growth is of benefit to all its citizens, particularly the most vulnerable. A strategy based on the Agenda 2063 of the African Union and the U.N.’s SDGs, the ENSSB was designed to build an efficient and effective social security system in Mozambique. It directly aims to sustainably support and strengthen Mozambique’s most impoverished population’s capacity to defend themselves against social risks such as violence, abuse, exploitation, discrimination, and social exclusions due to their elevated vulnerability.

The World Bank Group (WBG) currently supports a wide and diverse lending portfolio for the benefit of eliminating poverty in Mozambique. Focusing on Mozambique’s most vulnerable and underserved populations, the WBG has lent its resources to 27 operations with contributions of $3 billion funded by the International Development Association (IDA). The International Finance Corporation additionally has existing investments of up to $176 million, with $15 million in advisory services alone as of June 2020. The WBG’s portfolio consists of two Multilateral Investment Guarantee Agency exposures of up to $89.1 million as well.

Such large and varied contributions and investments have the following primary goals: diversification for economic growth and development, human capital development, and increased sustainable development, prosperity and resilience.

COVID-19 Relief Support in Mozambique

As a result of the onset of the pandemic, Mozambique is struggling with a growing fiscal gap and economic fallout. In order to prevent deepening long-term economic effects, the WBG approved a $100 million grant from the IDA on October 22, 2020. This funding aims to mitigate the pandemic’s adverse impact by providing emergency government financing, supporting affected businesses and households and improving fiscal sustainability reform.

This effort of the WBG will serve as part of its existing plans to aid Mozambique in post-crisis recovery in the form of improving health services, access to water and sanitation, extending social protection and labor, improving business, job creation and retention and economic management. These goals will help push Mozambique forward, improve Mozambicans’ quality of life and lift people out of poverty. These investments will be implemented through a two-pronged approach. First, the health sector will be addressed, along with social security, safety and water access for all Mozambicans, with a particular focus on the urban poor and vulnerable populations. Secondly, supporting small and medium enterprises’ (SME) access to financing and liquidity will help catalyze economic growth in the financial sector and industry reform and strengthen Mozambique’s fiscal and debt framework.

Though Mozambique has faced many setbacks in its economic development in recent years, the above strategies will hopefully set the country on its way to achieving the very first Sustainable Development Goal of eliminating poverty in Mozambique.

– Rebecca Harris
Photo: Flickr