Nikita Singla

Consultant . International Affairs. Sciences Po Paris. Engineer. IIT Delhi. Solo Backpacker. Yoga Trainer

Gas reserves in Mozambique – Boom for Mozambicans?

All set to join the ranks of the world’s fastest growing economies, Mozambique enjoys a myriad of primary energy sources and has now further discovered natural gas deposits in large commercial quantities. These discoveries could contribute billions of dollars to the economy and hurl Mozambique into the world’s third largest exporter of LNG.

In the two decades since the end of Mozambique’s civil war, the country has depended heavily on international donors to fund its development. Although the economy grew at record rates from the mid 1990s, Mozambique continues to face persistent socio-economic challenges that makes it one of the world’s poorest and least developed countries. A high percentage of the population still lives below the poverty line with inadequate access to formal employment, health care, formal education and energy. About 80% of the 22 million people in Mozambique derive their livelihoods from agriculture; a sector that contributes 20% to the gross domestic product (Kormawa and Devlin, 2011).

With an agenda to improve human development, Mozambique has been taking different initiatives, the most recent being the Poverty Reduction Action Plan 2011-14 which aims to reduce the poverty headcount from 54.7% in 2009 to 42% in 2014; close the country’s infrastructure gap and promote human and economic well being through rapid and inclusive growth, based on three objectives – increase of agriculture and fisheries production, employment promotion and social and human development.

One of the primary development strategies of Mozambique has been heavily dependent on the donor aid. Insights need to be drawn from the investment pattern and interventions already made in the country to improve the alignment between economic and social development. Despite the impressive economic growth rates and the encouraging development progress made by the government in recent years, poverty continues to be severe and widespread. This is primarily marked by lack of access to education, lack of access to health care, inadequate infrastructure, lack of appropriate technologies and supports resulting in low agricultural productivity among other factors.

With over 80% of the population relying on agriculture, low agricultural productivity is a threat to the country. There is a need to identify the underlying factors which result in this situation in terms of appropriate technologies, dependence on traditional farming methods, domestic research, yield of different seed varieties, marketing techniques and regulatory regimes among many others. Mozambique is heavily dependent on donor funding for its agricultural research and development, which fluctuates from year to year affecting the quality of research. Inadequate research staff qualification and training further triggers the need to realize the huge potential of agriculture in Mozambique and ways to achieve it. Similarly, despite its small population, education levels have been an all time low. Majority of the labor force being in the informal economy, it is vital to understand the nature of economic activities taking place in Mozambique, both in the formal and informal sectors of the labor market, policymakers familiarizing themselves with the existing educational set-up in terms of enrollment in schools at primary and secondary levels, role of gender, quality of education, qualification criteria for teachers, adult education programs, vocational and professional training of youth.

Mozambique rests with a huge development potential in its agriculture and education sectors. It is important to understand the role of international cooperation in the process. Key to this is having one-on-one conversations with stakeholders in Mozambique to develop understanding of the existing multilateral/ bilateral programs in Mozambique and the scope of private sector intervention for both sectors – agriculture and education. The need is to analyse the mechanisms of translation of Mozambique from a natural resource rich country to a socially inclusive society witnessing real developmental outcomes, with commitment from all stakeholders, especially the government, civil society and the private sector.

A deep dive into the present status shows that Mozambique has the lowest education level among its adult population in the world. The low skill levels remain a significant issue, both in the labor market and in the agricultural sector. A high population growth rate of 2.8% and an overall unemployment rate of 27%, make it imperative for Mozambique, recipient of massive donor aid, to translate the gas boom into the socio-economic development of Mozambicans.

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This entry was posted on November 15, 2013 by in Writings on international affairs and economics.

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