Challenges and Opportunities for Efficient Land Use in Mozambique: Taxes, Financing, and Infrastructure

Amanda de Albuquerque Climate Policy Initiative

Andrew Hobbs Climate Policy Initiative

November 2016

Mozambique has immense agricultural potential. Unfortunately, despite favorable weather and soil conditions, land resources, and an available workforce, the country remains a net food importer with rates of agricultural productivity well below international standards. Further, Mozambique is among the world’s most vulnerable countries in light of climate change: the use of drought resistant seeds and irrigation are rare, the majority of rural producers are focused on subsistence, and a dry year can lead to serious food security challenges.

Financing for measures that reduce risk and increase productivity, such as improved seeds and irrigation, could help address some of these issues. However, ensuring adequate food and water into the future also depends on the promotion of the long-term, productive potential of natural resources and the maintenance of their environmental functions. By implementing efficient and sustainable land use, Mozambique can align natural resources protection, reforestation, and avoidance of degradation with increased agricultural yields and food security.

While the government, private sector, and civil society in Mozambique have made progress toward solving some of the institutional and operational challenges of investing in these types of measures—in particular though the Comprehensive Africa Agricultural Development Program (CAADP) and government institutions like CEPGRI, IPEME, IPEX, CPI, IIAM, and CEPPAG—many gaps remain.

Within this institutional and operational context, researchers at Climate Policy Initiative—as part of the New Climate Economy project—examined the challenges and opportunities for investing in agriculture and natural resources management, with the goal of laying out next steps toward more efficient and sustainable land use in Mozambique.

Focusing on low-cost policy modifications, we found four ways to improve agricultural productivity and natural resource management:

1. Simplify government tax and fee administration, with an aim to reduce the costs imposed by bureaucratic time-delays.
2. Develop public financial incentives and public private partnerships (PPPs) capable of providing the tools to mitigate risk and allow investment.
3. Prioritize key infrastructure projects needed to stimulate investment in agriculture, including energy and irrigation systems.
4. Increase revenue-sharing mechanisms to incentivize natural resource protection.