Will Mozambique be Africa’s next big growth economy?

Posted on April 6, 2012 by Patrick Fine, Vice President for Compact Operations

Patrick Fine, MCC's vice president of compact operations, recently visited compact project sites in Mozambique and left optimistic about the country's economic future.

Nampula Province in central Mozambique is 2,200 kilometers north of the capital Maputo, about the distance from the East Coast to the Mississippi River. The countryside is marked by granite domes that tower hundreds of feet off the lush plains and by isolated mountains that rise up in surreal silhouettes worthy of artist Shane Devries. The land is not heavily populated, and villages are simple collections of traditional thatched-roof rondavels plastered with mud from ubiquitous conical ant hills. Rural electrification has not yet reached most of these villages, roads are simple dirt tracks, most people still fetch water from rivers, and boys stand by the roadside holding out bags of freshly shelled cashews for sale.

You can see signs of growing prosperity, including the results of MCC’s $506 million partnership with Mozambique: Our investment has helped build hundreds of village water points; pave major routes to facilitate agriculture, mining and commerce; and upgrade and expand straining municipal water and sanitation systems.

A year ago, these projects were seriously behind schedule and over budget, causing MCC and the Government of Mozambique to create an action plan to overhaul the approach for completing the work within the five-year deadline. I was impressed by the way Mozambique’s management authority, MCA-Mozambique, had consistently met its implementation milestones since the revised plan was adopted in March 2011.

Last week, with only 18 months remaining in the compact, I visited Nampula to get a firsthand view of what is being accomplished.

I was encouraged by the road and water system construction underway and came away with increased confidence that Mozambique will complete its work on time. In one rural community down a narrow 13 kilometer dirt track, I inaugurated a new borehole and water pump that serves 700 community members and will eliminate the need for women and children to spend up to two hours a day fetching water.

In the town of Nampula, I witnessed the distribution of property titles that give people secure property rights for the first time. The ceremony took place in an open neighborhood square where local officials called out names; the property owners came forward from the large crowd, signed a ledger and took their titles. At the end of the ceremony a number of people started to angrily call out, demanding their titles. The officials explained that the titles would be distributed each day that week. I found this spontaneous demonstration of the demand to have a title a reassuring indication of the value of MCC’s investment.

While my focus was on the MCC-financed projects, what really caught my attention was the extraordinary economic opportunity in Mozambique. Already, Mozambique exports electricity from the largest hydroelectric dam in Africa, and it still has unexploited capacity. A Portuguese contractor working on the MCC road project drove up in a Ford Ranger and had American-manufactured scientific equipment in its materials lab. Recently an American company, Anadarko Petroleum Corporation, announced it had discovered one of the world’s largest reserves of natural gas off the northern coast; the center of the country holds huge deposits of coal, and as more exploration takes place it is very likely that other minerals will be found in commercial quantities. Anadarko has plans to invest approximately $20 billion over the next five years! A Brazilian mining company is already shipping coal and has announced a $6 billion expansion.

I see all sorts of opportunities, from village hardware stores, hair salons and groceries to the suppliers and services that new investments in mining will require. Seen in this light, American investments in basic infrastructure are prescient. And a U.S. company is the supervising engineer on the drainage activity in Nampula city—where one of the main customers and beneficiaries of the new water system is Coca-Cola.

But far more important than market opportunities created by individual MCC-financed projects are the market opportunities that will open up for U.S. goods and services if Mozambique’s economy takes off. Road-building and mining equipment, chemicals and a spectrum of products and services will be needed to build this economy. Now is the time for U.S. companies to invest in establishing a presence in the country so that they can be competitive. 

The government is implementing business-friendly reforms—such as the MCC financed land reform program—and there is a still-untapped entrepreneurial spirit among the youth. Mozambique’s economy has already been growing at nearly 8 percent per year over the past several years and is on the verge of an economic era that could transform its villages and create prosperity and opportunities not only for one of the world’s poorest populations but for the companies and individuals intrepid enough to join an economy just taking off.

I left Mozambique with the impression that almost everything is in place for it to become the next big growth economy in Africa.

Springs of Prosperity

Posted on March 22, 2012 by Steve Marma, Resident Country Director

Mozambique suffers from one of the world’s lowest levels of per-capita water consumption. Mozambican girls and women spend much of their day fetching water instead of attending school or engaging in income-generating activities. But recently I was able to witness two important milestones in MCC’s effort to provide access to some of the country’s poorest people.

During a ceremony filled with optimism for the future of northern Mozambique, Prime Minister Aires Bonifacio Baptista Ali visited Nacala on Feb. 18 to lay the first brick for the area’s new water supply system. Surrounded by dignitaries, MCA-Mozambique employees, and beneficiaries, Prime Minister Ali placed the concrete block into a hole in the red earth.  Other dignitaries were on hand to witness this important event, including the governor of Nampula province, the vice minister of public works and habitation and local chiefs. There were speeches, handshakes, dancing, countless smiles, blessings by Christian and Muslim leaders, and a makeya (a traditional ceremony to mark important occasions).

More than 120,000 people in Nacala and the surrounding region will soon have access to improved sources of water because of the project, which includes a treatment plant, transmission mains, a reservoir, and distribution centers. It’s part of the compact’s $207 million Water Supply and Sanitation Project, which is expected to benefit more than 750,000 Mozambicans. Just days after that ceremony, we hit another landmark—albeit with far less fanfare. The first group of people displaced by the project’s activities in the Quelimane area received compensation payments. Almost 140 of the 423 people affected by the project received payments; 26 of them opted to receive new houses, the contracts for which have already been signed. They will likely have greater access to social services as part of a planned community.

The Quelimane activity is designed to improve drainage and reduce flooding, which should lower the rate of diseases like cholera and malaria, as well as allow for the expansion of the road system into the area.

Prime Minister Ali’s brick was the first of many to be laid, and hundreds of others affected by the Quelimane project will soon receive their checks—but this month’s events were huge steps on the path of helping northern Mozambicans escape poverty.

Building Community through Development

Posted on March 1, 2012 by Cassandra Q. Butts, Senior Advisor

Grade school students and teachers of the Bacjao Elementary School in Balangiga, Samar welcome MCC and MCA-Philippines teams on February 28, 2012. The public school is a recipient of two classrooms from the KALAHI-CIDSS project implemented by the Department of Social Welfare and Development.

I was in the province of Leyte in the Philippines on Tuesday to witness the signing of a Memorandum of Understanding by the municipality of Alang-Alang to begin participating in an innovative approach to development called Kalahi-CIDSS, which is included in the country’s MCC compact. Kalahi-CIDSS is a community-based approach to development that makes beneficiaries active participants in the selection, design and implementation of development projects that they believe are best for their communities.

While Kalahi-CIDSS isn't original to MCC—the program originally was funded in the Philippines by the World Bank—MCC's investment of $120 million will double the size and scale of the program and make it available to communities like Alang-Alang for the first time. MCC is also adding innovations in areas such as gender integration and environmental assessment, impact evaluation and engineering standards that will enhance the value of the program to beneficiaries as well as improve the sustainability of outcomes.

The hope is that Alang-Alang will find the same success with the program as the municipality of Balangiga experienced when it used Kalahi-CIDSS to build schools, a retaining wall to protect against typhoon flooding, a community road, and a bridge. Viscuso de Lira, the mayor of Balangiga, describes the Kalahi-CIDSS program as galvanizing community engagement in a way that had not been achieved before and building community support for sustaining projects that are the product of their own initiative and sweat equity.

MCC and the Millennium Challenge Account-Philippines are further using Kalahi-CIDSS to empower communities in a coordinated campaign against trafficking in persons, seeking to educate Kalahi-CIDSS communities as well as other communities impacted by our road project in the Samar region on preventing this global crime.

Kalahi-CIDSS is not only building and empowering communities but also promoting the principles of transparency and accountability in how development resources are used. This approach can be critical in improving local government at all levels of engagement.

Boosting tourism, increasing incomes in rural Namibia

Posted on February 28, 2012 by Tom Campbell, Senior Director

I served as a panelist today at an event MCC co-hosted with the World Wildlife Fund that focused on strategies, implementation and lessons learned from promoting community-driven approaches to natural resource management and eco-tourism in Namibia. We discussed the ways the Government of Namibia is involving the community in a wide-ranging approach to attract tourists while safeguarding the environment.

MCC hosted this event because of its compact with Namibia: a five-year, $305 million investment that is creating business opportunities and jobs in rural Namibia. Our focus today was the compact’s Tourism Project, which seeks to grow the tourism industry in northern communal areas and increase the income of households living in these communal areas.

To do this, MCC is working closely with Namibia’s Ministry of Environment and Tourism (MET), conservancies and the private sector to improve the management and infrastructure of Etosha National Park, enhance the marketing of Namibian tourism and develop conservancies’ capacity to sustainably manage their natural resources, attract investments in ecotourism and develop tourism skills.

Three examples illustrate our efforts:

Etosha Management and Infrastructure: MCC and MCA-Namibia are working with the Ministry of Environment and Tourism on reforms that will offer tourists a better product, encouraging longer stays and boosting revenues to the ministry and conservancies. MCC is also working with the Government of Namibia to open the western half of Etosha to tourism, which should also help attract additional tourists and revenue.

Conservancy Ecotourism Development: MCC and MCA-Namibia are helping conservancies increase their roles and benefits from tourism, generally through joint ventures with the private sector. MCA-Namibia has contracted with the World Wildlife Fund to provide technical assistance and training to 31 conservancies with high tourism potential. MCC funds are also being used for grants to leverage private sector investment in new tourism businesses. Through these partnerships, conservancies and the private sector develop agreements that lead to increased revenue and employment for the conservancies.

Two community joint venture lodges have already received partial grants, and we hope the compact will lead to as many as seven new lodges.

Marketing Namibian Tourism: To promote Namibia as an attractive tourism destination and to increase the number of tourists to the country, the Namibia Tourism Board has launched a redesigned website. 

The Namibian delegation that attended today’s event are in Washington as part of the marketing campaign focused on increasing the number of American businesses that market vacations to Namibia, as well as increasing the number of tourists from the United States and Canada. This effort is already showing results: More than 120 travel agencies now offer trips to Namibia, up from 106 agencies at the beginning of the compact.

If you visit Namibia, you can be assured that your money is contributing to community-driven approaches that help increase incomes for some of the country’s poorest people.

Land rights bring economic development in Mali

Posted on February 7, 2012 by Jon Anderson , Resident Country Director, Mali

Secure land tenure is a key to poverty reduction. It can improve access to credit, increase incentives for better land management and investment, and allow people the ability to capitalize on their assets.
 

In some African countries, land “grabs” by large companies are a growing concern for small farmers, many of whom lack formal title to the land their families have used for generations.  In the struggle for land resources with big players, poor farmers are often on the losing end.

But in Mali, MCC is helping the government strengthen the land rights of small farmers.
Prior to the MCC-funded Compact in Mali, formal land titling was almost unheard of in rural areas. The Mali Compact’s Alatona Irrigation Project is changing this by employing an integrated approach to agricultural development to bring almost 13,000 acres of intensively irrigated agricultural land into production and provide secure land rights for almost one thousand farming families. 
 

The Project is allocating most of the twelve-acre farms it develops to the people who used or lived on it prior to the Project, with the rest going to small farmers from elsewhere in Mali.  In addition, the Project is providing support to ensure that smallholder farmers have what they need to succeed, from infrastructure like housing, markets, latrines, schools, health centers, and wells for potable water, to services like agricultural training and access to credit. An improved road will also provide local families better access to markets in which products can be bought and sold.
 

The land component of the Project strives to incorporate women into the formal economy partly by providing them with land for market gardens and giving them the chance to be listed as owners on land titles to twelve-acre farms. As a result of this and other efforts to include women in Project activities, women are emerging as a force in the local economy, striving for better lives for their daughters and sons.  Some of the highest yields to date have been produced by women farmers.
The Mali Compact serves to enhance the property rights of local families and communities, thus helping the poor and vulnerable to participate in sustainable economic growth. MCC is proud to support such efforts.