The Mozambique growth diagnostic study released earlier this year show that despite the recent social unrest, the country is brimming with economic promise, underpinned by its strategic location, abundant natural resources, and resilient population. However, unlocking this potential requires addressing critical constraints while laying the groundwork for sustainable, inclusive growth.
The Growth Diagnostic Study, developed by a dedicated research team and supported by USAID Mozambique‘s SPEED program, offers valuable insights into the country’s most pressing challenges and policy recommendations. The full report, available for download, dives deeply into these areas, but this summary highlights key findings and proposed solutions.
Identifying Mozambique’s Growth Constraints
The study identifies three primary “binding constraints” to Mozambique’s economic development: road infrastructure gaps, regulatory red tape, and weak institutional coordination.
- Road Infrastructure:
Roads remain the backbone of Mozambique’s economy. Yet, only 27% of the country’s roads are paved, while many remain in poor condition. This restricts farmers, businesses, and investors from accessing markets efficiently, particularly in rural areas, which are central to agriculture. Better infrastructure can bridge this gap, fostering growth by connecting productive zones to domestic and international markets.
- Regulatory Red Tape:
Businesses in Mozambique face significant administrative challenges. Streamlining regulations and simplifying processes, such as business registration and land access, will reduce costs, encourage formalisation, and attract much-needed investment.
- Institutional Coordination:
Improved collaboration across public institutions is vital. The study highlights opportunities to enhance policy implementation through clearer roles, better resource management, and digital reforms that improve service delivery.
Strategic Policy Recommendations
The Growth Diagnostic Study provides actionable recommendations to address these constraints. For road infrastructure, the following steps are proposed:
- Establish a high-level board to oversee long-term planning and prioritisation.
- Create a delivery unit to implement road projects efficiently.
- Encourage greater private sector investment through transparent public-private partnerships (PPPs).
- Focus on rural connectivity to support agricultural productivity.
- Ensure sustainable funding and maintenance programmes.
On governance, recommendations include digitising public services, improving land-use regulation, and fostering a business-friendly environment without compromising safety and compliance standards.
Diversifying Mozambique’s Economy
The report emphasises the importance of economic diversification. While extractive industries have driven growth, Mozambique’s long-term success depends on developing sectors like agriculture, manufacturing, and services. Leveraging existing strengths and investing in new opportunities will create jobs, enhance productivity, and reduce vulnerability to external shocks.
A Collaborative Path Forward
The Growth Diagnostic Study is not just a diagnosis; it is a roadmap. By addressing infrastructure and governance challenges, Mozambique can pave the way for stronger partnerships, improved investor confidence, and broader economic opportunities. This collaborative effort between researchers, policymakers, and stakeholders signals a shared commitment to Mozambique’s future.
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