Delegation of the European Union to Mozambique

Mozambique and the EU

12/05/2016 - 15:06
EU relations with Country

Cooperation between Mozambique and the European Union came into existence after Mozambique´s independence in 1975. The close relationship between the two parties encompasses partnerships at bilateral, regional and global level.

Mozambique, with a population of 28.9 million (2017 Census), has experienced significant economic recovery in recent years, but still remains one of the least developed countries. The record levels of growth during the last decade have resulted in only moderate poverty reduction. Agro-sectors are the main source of food and income but these sectors only contribute to approximately 25% of GDP.

The European Union (EU), together with its 27 Member States, is the main donor in Mozambique. The EU, in close coordination with the other cooperation partners, is seeking to ensure that its cooperation with the country promotes sustainable development and generates long-term benefits and supporting the consolidation of democracy as well as inclusive and sustainable development.

Elections and political situation

Mozambique has been an example of reconstruction since the 1992 Rome Peace Agreement ending a 16-year civil war. The country´s first democratic elections were held in 1994 and electoral processes have been regular ever since. The country´s sixth elections were held in October 2019 and, as in previous polls, the EU deployed an independent Election Observation Mission (EU EOM).

Claims by the main opposition Renamo about the ill implementation of the 1992 peace agreement resulted in sporadic clashes mostly in Central Mozambique involving the government forces, Renamo´s militarized armthus affecting stability. The EU has been supporting dialogue for peace and stability which resulted in the signing of the Definite Peace Agreement in August 2019.

Economic situation

Mozambique is one of the most dynamic economies on the African continent, with considerable growth rates. Fundamental shortages in terms of access to basic social services, infrastructure, energy, skilled human resources and the financial system remain hurdle block.

The country's development is linked to the recent huge gas discoveries and the full exploitation of other existing natural resources, but also to a coherent diversification agenda that involves agriculture transformation. As regards the economic and social areas, the discovery of vast gas deposits off-shore should continue to contribute to an increasing flow of foreign investment, expand national revenues and boost the economy.

Political Dialogue

The EU holds regular political dialogue sessions with the Government of Mozambique, under Article 8 of the Cotonou Partnership Agreement. This provides a good opportunity for discussions on issues concerning the political, social and economic situation in the EU, in Mozambique, and areas of common interest. Besides these formal sessions, the EU has a permanent dialogue with the authorities of Mozambique, political parties represented in Parliament and with civil society. The last political dialogue meeting was held in June 2019.

Legal framework and Dialogue with the National Authorizing Officer (NAO)

The legal framework for EU and Mozambique relations is provided by the 2000 Cotonou Agreement, signed in between the ACP countries and the EU, covering a period of 20 years. Work is underway in preparation of the post-Cotonou era, with the partnership centered on the wider objective of fighting poverty.

NAO's office - its main role is to ensure the effective and efficient implementation of programmes funded by the European Union. The NAO of Mozambique is the Minister of Foreign Affairs, supported by a technical team and is the official signatory to all operations financed by the EU. Besides the Political dialogue, EU-Mozambique relations are also structured in other dialogues:

  Cooperation Dialogue

The current donor coordination structure in Mozambique is the result of various reforms in the last years carried out in view of simplifying it. Besides the 11 EU Member States with local representation, namely Austria, Belgium, Finland, France, Germany, Ireland, Italy, Netherlands, Portugal, Spain, and Sweden, the main players include the Unites States, Canada, Switzerland, Norway, Japan, the United Nations, the Bretton Woods Institutions and the African Development Bank. UN agencies are highly prominent in the country, some of which are partnering with the EU in implementing important projects.

The European Union, together with its Member States, is the main donor in Mozambique and contributes approximately two thirds of the country's international aid, estimated at some 20% of the national budget. The EU seeks to ensure that cooperation with the country promotes sustainable development and supports the consolidation of the country's peaceful path towards democracy. EU development assistant to Mozambique is in line with the country's priorities.

Donor's Coordination Platform (DCP) Technical and financial coperation 

Established in November 2016, this platform is an informal development partners' setting, represented at the level of Heads of Cooperation for all traditional bilateral and multilateral donors support.

 Technical and financial coperation

The 11th EDF (2014-2020) allocation is the main source of funds to support cooperation with Mozambique. The EU regularly updates the information on its disbursements in the on-line database ODAMOZ.

The European Development Fund (EDF)

The initial allocation under the 11th European Development Fund (EDF)´s National Indicative Programme (2014-2020) for Mozambique amounts to €734 million in grants and focuses on good governance and development and rural development. The EU is committed to the principle of ‘ownership’, meaning that partner countries are fully involved in the process of developing the strategies and programmes which affect them. 

Mozambique is member of the World Trade Organization (WTO) since 1995 and of the Southern African Development Community (SADC). Currently, the country is making continuous efforts to liberalize its economy, improve the business environment and investment climate. In this regard, there have been plenty of opportunities for enhanced trade relations with the European Union. On trade flows, the EU is a major trade partner of Mozambique.Supporting information: DG Trade/Statistics and  Trade Helpdesk
 

Trade Agreement

The EU has been since early 2000 promoting a new type of regional, multilateral trade arrangement, known as the Economic Partnership Agreements (EPAs). EPAs are comprehensive agreements aiming to reduce poverty, diversify economies and create employment through enhanced intra-regional integration and a carefully managed opening towards the world economy. 

Mozambique took part in the negotiations with the EU under the SADC-EPA Group also comprising Botswana, Lesotho, Namibia, South Africa and Swaziland. The parties signed the agreement in Botswana, in June 2016. Mozambique's Parliament ratified it in April 2017 and it entered into force in Mozambique on 4 February 2018. Within the EPA framework, Mozambique has guaranteed duty free and quota free access to the EU market and the EU benefits from improved access to the Mozambican market, for the benefit of consumers of final and intermediate products and investors.

EPA Info sources

Learn more about EU-SADC Trade Relations.

Good Governance and Development Sector

Actions under this focal sector aim to provide overall support to national public policy, priorities and its complementary actions, with emphasis on strengthening of core government systems, accountability and macroeconomic management. It also promotes an enabling environment for sound political and economic governance. Within the area of "Good Governance and Development", the European Union supports the consolidation of the rule of law, essential to consolidate the democracy. Specific support is given to key institutions as the Prosecutor's Office, the Supreme Court and Parliament. Activities for the Anti-corruption service are also reinforced.

The Rural Development focal sector has a two-pronged approach to supporting inclusive growth and poverty reduction in rural areas. EU interventions help, on one hand, to improve food security and nutrition, through increased production, access to food and to markets via appropriate transport infrastructure and, on the other hand, support enhanced rural competitiveness by fostering the conditions for sustainable growth of micro, small and medium-sized enterprises.

The overall objective of the rural development sector is to foster sustainable, inclusive and broad-based economic growth and sustainably reduce poverty in two provinces, Nampula and Zambezia, through: a) improving food security and nutrition status; and b) enhancing rural competitiveness. In order to contribute towards these objectives, the EU has adopted an integrated approach to rural development, a programme named PROMOVE, with actions geographically concentrated in Nampula and Zambezia in order to maximize synergies, economies of scale, and impact.

The PROMOVE Programme has six components of action, namely Transport, Energy, Agribiz, Nutrition, Biodiversity and Trade.

 

 PROMOVE Transport - € 124 Million

PROMOVE Transport is focused on the rehabilitation of rural roads in the provinces of Zambezia and Nampula. The programme has a strategic relevance to the regional and international integration (Malawi and Zambia) of Mozambique. The overall objective is to contribute to sustainable, broad and inclusive economic growth through job creation and poverty reduction. /file/roadconstructionjpg_enroad_construction.jpg

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Improvements to road conditions in the project areas enhance the viability of local transport services, leading to increased availability of transport and lowering transport costs and a chain of other benefits related to reduced costs of agricultural inputs, greater rural competitiveness, and higher income generation for families. The most recent example of such benefits is the Milange – Mocuba 190km road, funded by the European Union, which last 110 km were inaugurated in March 2019.

Milange - Mocuba road

 

PROMOVE Energy - € 94 Million

PROMOVE Energy is a key component that specifically focus on rural energy services access. Mozambique's current energy access rate is amongst the lowest in the region, with 26% rate connection to the grid. National Electrification Strategy aims to connect at least 50% of the population to the grid by 2030.

ROMOVE Energy will contribute to progress towards the 2030 Agenda goal of securing universal access to affordable energy services by the populations and private sector operators across the country and in particular in Zambézia and Nampula. A programme in two phases has been designed as follows:

Project Preparation Facility (PPF) to achieve and improve access to sustainable and affordable energy to the population and private sector operators by an enabling environment towards leveraging investments. Projects supported by this Facility should feed financial instruments such as ElectriFI, the Africa Investment Facility (AfIF) or the European External Investment Plan. €10.5 million have been earmarked for this first phase, which started in 2018./file/table3png-0_entable_3.png

Energy Services Access Programme (MESAP) - This is the second phase of the EU Access to Energy programme. MESAP will support direct investment on projects from the first phase, but not limited to it, with the objective of increasing rural electrification. It also will consider direct investment on the development of mini-grids and stand-alone solar home systems projects.

PROMOVE Agribiz - € 68 Million

Improving rural competitiveness in Nampula and Zambezia provinces

In Mozambique, subsistence agriculture often barely meets household food needs. Smallholder production, with low agricultural productivity, is largely not competitive commercially. Emerging farmers face multiple difficulties to operate. For most crops productivity only reaches a fraction of its potential, which is estimated at around one third of the one in neighboring countries. 

Under the Rural Development Focal Sector, actions will cover a variety of agro-ecological zones with overall favorable production conditions extending over the two development corridors of Nacala and Zambeze valley. Given that agriculture in these provinces is characterized by small-scale farming, increasing rural competitiveness must combine i) Improving food security and resilience and ii) supporting private sector/business development for economic diversification and inclusive growth. The wider focus will follow three intervention lines:

  1. Increasing sustainable agriculture development in view to enhancing food and nutrition security, produce marketable surplus for improved competitiveness of agricultural production, and resilience to shocks.
  2. Developing rural markets and value chain competitiveness with the aim of fostering economic diversification and the improved availability of services and goods.
  3. Community development for resilience in view of introducing behavioral changes, fostering social cohesion and gender equality.

Implementation started in 2019.

Small farmer_Mozambique

 

PROMOVE Nutrition - € 30 Million

Underway since 2017, the 5-year PROMOVE Nutrition programme is a partnership with UNICEF, the National Health Institute and the SUN-Civil Society Network, aiming to address the high levels of stunting in Mozambique.

In Mozambique, the rate of chronic malnutrition (stunting) is considered to be at critical and stagnating levels (43% in 2018). Stunting remains a key public health concern, primarily affecting infants, young children and women of reproductive age. The nutrition component  contributes for the coordination and strategic planning for nutrition while scaling up nutrition-specific interventions under the government´s Multi-sector Action Plan for the Reduction of Chronic Undernutrition.

The "essential nutrition package" has a specific focus upon young children and pregnant and lactating women; and finally, the action will strengthen the capacity of government and key stakeholders on multi-sector nutrition information management systems to guide the planning and decision making on nutrition interventions.

 

PROMOVE Biodiversity - € 13 Million

Nampula and Zambezia provinces are the most populated in the country, therefore, dependency of local population on natural resources for livelihood represents a major concern for biodiversity conservation.

This component aims to protect the biodiversity and contribute to improving the livelihoods of rural communities through sustainable management of natural resources. The program will cover the areas known as Ilhas Primeiras e Segundas and adjacent coastal zones, the Gilé National Reserve and the Mabu Inselberg in the provinces of Nampula and Zambezia. These areas have been selected for their resources are under pressure from local communities' action. The intervention logic of the project will be around four main Result Areas:

1) Institutional capacity;

2) Activities related to community based biodiversity;

3) Sustainable management of natural resources; and

4) Applied research to natural resources management

 

PROMOVE Trade - € 12 million

This is the only PROMOVE component with a national focus - it aims to support the implementation of trade facilitation measures and the improvement to the business environment by strengthening the government's reforms capacity within the framework of the World Trade Organization and Economic Partnership Agreement (EPA) between the EU and SADC.

In this context, issues such as Technical Barriers to trade will be addressed by supporting the expansion of quality infrastructure services for value chains and strengthening the capacity of the private sector in relation to EPA opportunities.

PALOP-TL and European Union Cooperation Programme

The five Portuguese speaking African countries (PALOP), namely Angola, Cape Verde, Guinea-Bissau, Mozambique and São Tomé and Príncipe, began cooperating mid-1970s, after their independences. In 1985, these countries joined the Africa Caribbean Pacific (ACP) Group and the first EU-PALOP regional cooperation programme started in 1992. In 2007, Timor-Leste joined as the sixth member and PALOP was renamed PALOP and Timor-Leste (PALOP-TL).

The still on-going 10th EDF PALOP-TL Cooperation programme promotes a "Governance Initiative" with an allocation of €33.1M is focused on reinforcing democratic, social and economic governance. Two important areas covering the cultural and creative industries and economic governance, particularly on improving public financial management in the PALOP TL, have benefitted from a €26M fund agreed in March 2019 between the EU and PALOP-TL.  

 

An empowered civil society is a crucial component of any democratic system and the participation of civil society organizations in policy processes is key to ensuring inclusive and effective policies. In 2015, a mapping study of CSOs and a Joint Roadmap of the European Union, Member States and other partners was carried out in Mozambique aiming to present a comprehensive overview of CSOs' enabling environment and options to maximize support.

Permanent dialogue occurrs in different formats in view to integrating civil society voice during EU programme identification phase.

Civil society programme

EU action aims at improving CSOs’ and public institutions’ dialogue, reinforcing their role in promoting systemic checks and balances and an enabling environment for participation at local level. Activities are grouped under the three priorities:

  • Supporting the application of the national legal provisions (association and access to information ) and reinforcement of space for dialogue with citizens representation;
  • Reinforcing informal mechanisms for continued investment in civil society’s work at local level;
  • Building capacity of CSOs and promoting new opportunities for development.

Two main instruments are in place to support non-state actors:

- “Civil Society Organizations and Local Authorities 2014-2020” programme, which promotes synergies between municipalities and CSOs;
- Non-State Actors Support Programme (PAANE), which supports non-state actors to have a voice in the policy, advocacy and monitoring processes and implementing projects.

The European Union adopted in 2015 an Action Plan on Humans Rights and Democracy (2015-2019) to reaffirm the Union's commitment to promote and protect human rights and to support democracy worldwide. The Plan outlines means for collaboration between the EU and local institutions in partner countries, and reinforces the commitment to mainstreaming human rights into all EU actions. The Action Plan has five priorities:

- Support to Human Rights and Human Rights Defenders in situations where they are most at risk;

- Support to other EU Human Rights priorities focusing on protecting human dignity including support and promotion of children's and women's rights, fighting discrimination in all its forms, impunity, promoting freedom of religion or belief, promoting economic, social and cultural rights, and the respect for international humanitarian law;

- Support to Democracy;

- Support to EU Election Observation Missions; and

- Support to targeted key actors and processes, including international and regional human rights instruments and mechanisms.

The EIDHR funds specific projects in Mozambique through calls for proposals with the aim of eliminating gender based violence.

The Spotlight Initiative

The European Union and the United Nations launched in September 2017 a new global Initiative to eliminate all forms of violence against women and girls. The initiative is in line with the 2030 Agenda with a particular focus on women's rights and empowerment and the wider goal of leaving no one behind. Backed by an initial financial envelope from the EU of EUR 500 million, this partnership looks to ensure that all women and girls can live a life free of violence. Of the total amount, EUR 40 million iare dedicated to Mozambique, where the programme is implemented in three provinces: Gaza, Manica and Nampula.

Learn more about the Spotlight Initiative.

The EU and its Member States are at the forefront of the response to major crises around the world. In addition to the more medium and long term development assistance, the EU provides humanitarian aid through its Directorate-General for European Civil Protection and Humanitarian Aid Operations (DG-ECHO, referred to as ECHO). ECHO mandate is to provide humanitarian assistance to the victims of conflicts or natural and man-made disasters, to save, preserve life and reduce or prevent suffering. This assistance is intended to go directly to those in distress irrespective of race, religion or political convictions.

 

Humanitarian country context in Mozambique

 

Mozambique is one of the countries most affected by the impacts of weather-related loss events. The EU has been on the forefront of funding life-saving relief such as food, shelter, medical treatment and other items to people affected by natural disasters. Following the two devastating Cyclones Idai and Kenneth in March/April 2019, ECHO provided over Euro 8m in emergency assistance. A further Euro 10m has been made available for food and cash assistance in October 2019.

 

Assistance is channeled through Non-Governmental Organizations, International Organizations and such as United Nations (UN) and Red Cross agencies. Find more info on ECHO here. As part of the wider post-cyclone reconstruction in Mozambique, the EU has pledged EUR 200 million, announced at the International Donors Conference in Beira.

 

Support to post-cyclone reconstruction

 

Overal EU suport for reconstruction efforts in Mozambique amount to EUR 200 million and implementation is iongoing. Of this amount, EUR 100 million are a concessional loan through the Europan Investment Bank.

 

THE EXTERNAL INVESTMENT PLAN (EIP)

This is EU’s ambitious instrument to encourage investment in partner countries in Africa and the EU Neighborhood region in order to promote inclusive growth, job creation and sustainable development and so tackle some of the root causes of irregular migration. The EIP is adapted to the specific needs of partner countries and builds on the very successful model used within the EU, where the ‘Juncker Plan’ has already triggered more than € 240 billion of investment. 

The EIP focuses on a number of priority investment areas, such as sustainable energy and sustainable connectivity; micro, small and medium enterprises financing; sustainable agriculture, rural entrepreneurs and agroindustry; sustainable cities and digitalization for sustainable development.

WHY AN EXTERNAL INVESTMENT PLAN?

Instability and conflicts in Africa and the EU Neighborhood have been aggravated by the global economic crisis, reducing access to finance for much needed investment. Instability and conflict have also exacerbated the ongoing migration crisis with more people than ever on the move in Africa and in the Neighborhood.

The European Union and its Member States are collectively the world’s biggest providers of development assistance, providing €75.5 billion in 2016, or almost 60% of global assistance. Traditional assistance in the form of grants remains essential – but must be complemented with other tools and sources of finance in order to reach the ambitious targets set by the Sustainable Development Goals. The international community agreed in 2015 on an innovative agenda on financing for development through innovative financing models. The External Investment Plan is part of the EU’s contribution to these commitments.

HOW WILL IT WORK?

The External Investment Plan will crowd in private investors, where viable business proposals meet social needs, and where limited public funds can attract private money. The Plan will encourage private investors to contribute to sustainable development in countries outside of Europe. The European Fund for Sustainable Development (EFSD) isthe financing mechanism used to support investments by public financial institutions and the private sector. With a contribution of €4.1 billion from the European Commission, the EIP is expected to leverage more than €44 billion of investments by the end of 2020.

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