Will Mozambique be Africa’s next big growth economy?

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

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.

Two Roads, One Dream: Building History in Vanuatu

Posted on April 22, 2011 by Frances Reid, Senior Investment and Risk Officer

It was a great personal pleasure to participate in the closing ceremonies marking the end of the Compact in Vanuatu, and the completion of the Santo East Coast Road and Efate Ring Road rehabilitation. Vanuatu was one of the first countries selected to receive MCC funding, and it remains the only Pacific island nation to have entered into a compact with MCC. I’ve been extremely impressed with the serious efforts made by the government and the commitment of the people of Vanuatu over the last five years, not only to carry out the requirements of the Compact, but also, and in the long run more importantly, to strive to meet the rigorous policy reform eligibility criteria which MCC considers the key to the sustainability of development. Vanuatu has truly emerged as a model of democracy and commitment to good policy, and as a regional anchor of stability.

In a country which had only 73 kilometers of paved roads before project inception, the Compact has nearly tripled this number to a grand total of over 220 kilometers of paved roads! The rehabilitation of these two national roads, the most important roads in the country and affectionately renamed the Goodwill Highway and the Road of Life, is already improving access to market and providing critical access to social services in the two most critical economic development corridors in Vanuatu.

This project has been the highest priority for everyone involved and it has already made national history. From the precedent of community consultations and community engagement through the commitment to building infrastructure in a culturally respectful way to capacity building at both MCA-Vanuatu and the Engineering Support Unit and Government commitment to good policies for economic growth, this has been a demonstration of country ownership, dedication, and partnership. MCC takes pride in having been part of this effort to lay a foundation for sound, sustainable, country-led economic growth.

The Compact is also a testament to good donor cooperation. New Zealand, in particular, as well as Australia, through their development assistance programs, contributed in critical ways to the completion of the Compact program. Their willingness to work with MCC and the Government of Vanuatu to achieve a common purpose is an excellent example of how donor cooperation is supposed to work.

Cultivating Rural Entrepreneurs: Gender Integration in Tanzania

Posted on March 9, 2011 by Chelsea Coakley, Program Officer Tanzania

During a recent trip to Tanzania, I traveled with MCA-Tanzania’s Gender Specialist, Deborah Sungusia, to observe a day-long training session in Tanga, about five hours north of Dar es Salaam. The seaport city of Tanga marks the starting point of the Tanga-Horohoro Road, one of the Tanzania Compact’s road investments (approximately 65 km/$49 million). This investment includes the rehabilitation of a key transportation route between the port of Tanga and the border town of Horohoro, which will create an improved linkage to the port city of Mombasa, Kenya - a major port of trade for East Africa.This road rehabilitation project is expected to increase trade and development between Tanzania and Kenya, create jobs, reduce transportation costs, increase access to vital community services for the people of this region, and will also help small subsistence farmers to more easily access local and regional markets.

In order to ensure that both women and men have equitable access to the economic benefits associated with this road project and others in the Compact, MCA-Tanzania developed a national Gender Integration Program (GIP). In collaboration with MCC and local stakeholders, MCA-T recognized that gender inequality was a significant constraint to economic growth and poverty reduction, identified priority areas for intervention to address this issue, and is currently utilizing an existing network of trained Gender Focal Points (GFPs) throughout the country to implement their program.
MCA-Tanzania is funding targeted trainings to help raise awareness amongst women and men throughout the implementation of each MCC Compact project in the transport, energy, and water sectors. The training program was also designed to increase understanding of the concept of gender and differential benefits experienced by men and women in economic development projects, and to cultivate the skills and economic potential of new or already existing entrepreneurial groups at each Compact project site.

The training I attended in December was a two-day follow-up training session designed to provide knowledge, skills and resources for effective management of entrepreneurial groups from the Tanga region. The group consisted of both direct and indirect beneficiaries of the Tanga-Horohoro road project. Each participant received comprehensive training on topics such as microfinance, access to loans and credit, bookkeeping, mobilization/management of group membership, and hygiene/sanitation education. Approximately ten skill-based groups from eight different villages, and 12 different wards (sub-village level) in the Tanga and nearby Mkinga region were represented at this training.

There were approximately 15 men and 25 women present at the training. Their skill sets ranged from cooking services to masonry, and from small-scale farming to security services provision. Through group discussion and mock problem-solving, feedback from peers and Gender Focal Points, and selected presentations to all participants, it was clear that all attendees were able to brainstorm with like-minded community members, practice their presentation skills, and gain a much deeper understanding about how to access increased economic opportunities that exist while the road is under construction, and new opportunities to expand their businesses, once the road is finished.

Before leaving Tanga, I was able to speak with a number of participants and it became quite clear to me that many of these dynamic men and women would most likely return to their cities, villages, and wards to share their new entrepreneurial knowledge, and become champions of their families’, communities’ and country’s development—teaching others to access new opportunities for growth along the Tanga-Horohoro road. I am looking forward to seeing the impact of this program on the ground over the next year.

The Jug Half Full

Posted on February 8, 2011 by Jonathan Brooks, Resident Country Director for Honduras

 

The community at Colonia Milenio Pumas has been dear to MCC’s heart. Nestled on a hill about 30 km north of Comayagua along the CA-5 highway, it is the largest and among the earliest resettlement communities set up as part of the highway construction (nearly 30 families). We followed the community’s progress throughout the years as it slowly changed from a group of people linked only by one of the poorest stretches of the CA-5 highway, into neighbors who formed a true community.

January 25th was special. Overcoming some initial difficulties, MCA-Honduras, the Honduran entity which implemented the compact, established a water system to guarantee water access though both the dry and rainy spells of the year. We were invited to join in the inauguration of the water system as well as the naming of the community school. In a touching tribute to one of our colleagues who worked with dedication on the resettlement effort, the community named their new school, “Escuela Jonathan Nash.” 

There was much clapping and giggling from the school children who joined in the naming of their new school, and there was even louder applause from the entire community when they witnessed the rush of water that flowed from a faucet in the school yard as part of the dedication. The water flowed into a clay jug which had been set aside for the occasion. As I saw the water line begin to fill the jug, I was reminded of what many Hondurans have pointed to as one of the legacies of the program: the belief that their lives can improve. As I stood and smiled with the community as the water flowed, I realized that they had come to see their own jug as half full.