Number 69, July 2010

The first ten years (1982-1992) of IFAD’s cooperation with the Government of Mozambique were characterized by an environment of war and instability. In seeking to support the remote rural areas of the country, the challenge has been to develop its physical and human capital from scratch. Following independence in 1974, the country was left with very limited human and physical capital and much of that was destroyed during the ensuing civil war. While significant urban-rural differences are the norm in Africa, in Mozambique the differences between the capital (Maputo) and many rural districts are striking, even today.

Since 1982, IFAD has approved ten project/programme loans to Mozambique for a total of US$175 million; eight such loans having been approved after the end of the civil war in 1992. The Fund prepared three country strategic opportunities programmes (COSOPs) in 1997, 2000 and 2004 respectively and, in 2008/9, its Office of Evaluation evaluated seven of the interventions involved. Project and programme activities have involved artisanal fisheries, support services to smallholder farmers and livestock owners, rural finance and market linkages, with the aim of improving poor rural people’s participation in markets. Investments in social and economic infrastructure have been included in some loan projects.

Main evaluation findings
Poverty analyses confirm the validity of IFAD’s strategy (since the late 1990s) of linking farmers and fishers to the markets: households that produce for the market are generally better-off than those producing for self-consumption. Emphasis has been rightly placed on high-value produce and cash crops and on increasing farmers’ bargaining power.

The recent move towards three thematic programmes in support of primary production, market participation and rural finance will create challenges with regard to the coordination and promotion of synergistic effects. This move is based on the assumption that the three thematic areas and support programmes will complement one another – a major challenge because coordination among public institutions is often problematic.
The above-mentioned COSOPs argued against the need for a very detailed targeting strategy as it was claimed that all rural households should be considered as poor. Recent poverty analyses, which highlight increasing rural inequality and a pessimistic outlook for the poorest, contradict that argument.  Moderately satisfactory progress has been made in achieving COSOP objectives, but much still remains to be done.  For example, while some progress has been made in terms of alignment, harmonization efforts have been less successful.

As evaluated, the performance and overall impact of the loan portfolio is deemed to have been moderately satisfactory, a good achievement when   one considers the country’s capacity constraints. In spite of impressive improvements in terms of human and physical capital in the rural areas, more realistic assessments of capacity constraints are needed at project design.
The combination of national policy components and local field activities, implemented by dedicated programme management teams, has been useful in promoting policy changes and innovations. Several innovations planned at the design stage have been abandoned, while others emerged during implementation while seeking solutions to problems at the grass-roots level. As far as rural finance is concerned, IFAD has encountered a number of difficulties, largely due to a slow implementation progress in establishing the mechanisms required to on-lend funds to financial intermediaries as well as the choice of sub-par institutional partners lacking expertise. However, the Fund’s support for artisanal fisheries has been instrumental - although not by design - in introducing the accumulating savings and credit associations that have become the predominant form of organizing savings and credit services at the grass-roots level.

Overall, grants provided by IFAD have made only a marginal contribution to achieving COSOP objectives. More effective use of grant resources could be achieved if the Country Programme Management Team were provided with a medium-term ’grant envelope’ for programming.