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Mozambique is a Southern African country with a population of 28.9 million according to the last census in 2017. The country 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. Agriculture and fisheries 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 28 Member States, is the main donor in Mozambique. The EU, in close coordination with the other co-operation 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 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 defense and security forces and the Renamo´s militarized arm. The EU has been supporting dialogue for peace and stability which resulted in the signing of the Definite Peace Agreement in August 2019.
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.
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.
The legal framework for EU and Mozambique relations is provided by the Cotonou Agreement, signed in June 2000 between the ACP countries and the EU, covering a period of 20 years (2000-2020). Work is underway in preparation of the post-Cotonou era. The partnership is centered on the objective of fighting poverty.
Dialogue with the National Authorizing Officer (NAO)
The position of National Authorizing Officer (NAO) is outlined in Article 35, Chapter 6 "Management and Executing Agencies". The overall objective of the NAO's office 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:
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 12 EU Member States with local representation, namely Austria, Belgium, Finland, France, Germany, Ireland, Italy, Netherlands, Portugal, Spain, Sweden and UK, the main players include the Unites States, Canada, Switzerland, Norway, Japan, the United Nations, the Bretton Woods Institutions and African Development Bank. UN agencies are highly prominent in the country, some of whom the EU is implementing important projects with.
Donor's Coordination Platform (DCP)
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.
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.
Technical and financial cooperation
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.
Trade policy reforms in Mozambique started in 1987 with the Economic Rehabilitation Program which put in place market-based economic policies. Mozambique is member of the World Trade Organization (WTO) since 1995 and of the Southern African Development Community (SADC) since its creation in 1980 (then as SADCC). 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.
The EU is a major trade partner of Mozambique, being its main export destination mainly due to the preponderance of aluminum. In 2017, EU was Mozambique´s 2nd import partner, after South Africa.
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 negotiations ended in 2014 with the parties signing the agreement in Botswana, in June 2016. Mozambique's Parliament ratified the agreement in April 2017, with it entering into force 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
Good Governance and Development Sector
EU and Mozambique National indicative Programme (2014 - 2020) has two main focal sectors, namely, Good Governance and Development and Rural Development. Actions under this focal sector aim to provide overall support to national public policy and its priorities and its complementary actions, with emphasis on capacity strengthening of core government systems, domestic accountability and macroeconomic management. It also promotes an enabling environment to support 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.
Rural Development Sector
The Rural Development focal sector has a two-pronged approach to the support of 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 through appropriate transport infrastructure. On the other hand, the EU supports enhanced rural competitiveness by fostering the conditions for sustainable growth of micro, small and medium-sized enterprises in rural areas.
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 Delegation to Mozambique has formulated an integrated approach to rural development, named PROMOVE, which components, except trade, are geographically concentrated in the provinces of Nampula and Zambezia in order to maximize synergies, economies of scale and impact.
The PROMOVE Programme
PROMOVE´s overall objective, under the rural development focal sector, is to foster sustainable, inclusive and broad-based economic growth and sustainably reduce poverty through: a) improving food security and nutrition status and b) enhancing rural competitiveness. The programme has six components of action, namely Transport, Energy, Agribiz, Nutrition, Biodiversity and Trade.
PROMOVE Transport - € 124 Million
PROMOVE Transport is part of the European Union's overall approach to rural development under the 11th EDF, and will focus, in particular, 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. Challenges related to food and nutrition security and climate change will receive special attention as a way of guaranteeing access to food and to public and social goods and services in rural areas.
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.
PROMOVE Energy - € 94 Million
PROMOVE Energy is a key component that specifically focus on rural energy services access and that is complementary with the €10.5 million mobilized already for the implementation of the energy Project Preparation Facility aimed to project development and enabling business environment.
Mozambique's Renewable Energy Atlas (2015) has proved that the country is endowed with an extraordinary mix of renewable energy sources. However, current energy access rate in the country 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.
The action in this sector will contribute to boost progress toward the 2030 Agenda, in particular 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 population and private sector operators, particularly in rural areas, 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 are earmarked for this first phase, which started in 2018.
Energy Services Access Programme (MESAP) - This refers to the second phase of the EU Access to Energy programme, a continuation to the energy Project Preparation Facility (PPF). MESAP aims to support direct investment on projects supported by the PPF first phase, but not limited to it, with the objective of increasing rural electrification. MESAP will consider direct investment on the development of mini-grids and stand-alone solar home systems projects.
Participation of the private sector through innovative financial instruments such as ElectriFi, the Africa Investment Facility (AfIF) or the new European External Investment Plan (EEIP) are key for the implementation.
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, geographic concentration in Nampula and Zambezia aims to cover a variety of agro-ecological zones with overall favorable production conditions extending over the two development corridors of Nacala and Zambeze valley. Agriculture in these provinces is characterized by small-scale farming.
Consequently, increasing rural competitiveness must combine the two sides: 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:
Implementation started in 2019.
PROMOVE Nutrition - € 30 Million
Underway since 2017, the PROMOVE Nutrition 5-year 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 2013). Stunting is widely prevalent and remains a key public health concern, primarily affecting infants, young children and women of reproductive age. This nutrition component contributes for the coordination and strategic planning for nutrition while scaling up the implementation of nutrition-specific interventions included in the government´s Multi-sector Action Plan for the Reduction of Chronic Undernutrition 2011-2015 (PAMRDC 2020) .
The action under PROMOVE Nutrition entails support to the "nutrition governance system" at both central and local levels; secondly, the action will scale up the delivery of specific components of the provincial PAMRDC plans, also covering water-sanitation-hygiene (WASH) interventions - 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 poor rural and urban populations on natural resources for livelihood represents a major concern for biodiversity conservation.
The overall objective of this component is to protect the biodiversity and contribute to improving the livelihoods of rural communities through sustainable management of natural resources. The program will cover the area 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
The EU Delegation to Mozambique undertook studies in the field in order to identify areas for intervention.
PROMOVE Trade - € 12 million
This is the only project among the six components 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 capacity to implement reforms 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 then 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 to reinforce democratic, social and economic governance through the implementation of 7 projects on electoral assistance, private sector support, rule of law, public services, the establishment of the Macroeconomic and Financial Management Institute in Luanda, as well as the support to the PALOP-TL coordination mechanism and a Technical Cooperation Facility to support the identification and implementation of actions.
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.
The PALOP-TL/EU programme turned 25 years in 2017 and to mark the date, a short-movie competition took place and six selected young movie directors from each of the PALOP-TL countries received funding to produce short-movies and participated in an arts residency in Maputo.The movies were presented in international cinema festivals in Africa and Europe. Since 1992 a total of 23 projects have been financed under diffferent EDFs.
Facebook link: Concurso Curtas PALOP-TL 25 Anos
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 were carried out in Mozambique aiming to present a comprehensive overview of CSOs' enabling environment and options to maximize CSOs’ support as important actors of governance.
Permanent dialogue occurrs in different formats in view to integrating civil society voice during EU programme identification phase. Citizens' platforms are regularly consulted on the preparation of policy papers on themes such as the gender, democracy and human right profiling. EU´s CSO mapping processes led to the creation of a partners group with 21 partner countries and agencies, they meet four times a year.
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:
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 Action Plan outlines means for collaboration between the EU and local institutions in partner countries, and reinforces the commitment to mainstreaming human rights into all the EU's activities and policies, ensuring coherence and efficiency. The instrument also supports civil society to become an effective force for political reform and defense of human rights. The 5 priority areas of the Action Plan are as follows:
Support to Human Rights and Human Rights Defenders in situations where they are most at risk;
Support to other EU Human Rights Priorities with main focus on protecting human dignity including support to the protection and promotion of children's and women's rights, fighting discrimination in all its forms, fighting impunity, promotion and protection of freedom of religion or belief, promotion of 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 in Mozambique has been funding specific projects, through calls for proposals with the aim of eliminating gender based violence. The last call for proposal was launched in April 2017 with an allocation of 900,000 EUR.
Gender and women’s rights on EU´s agenda
In 2015, the European Council adopted the new Gender Action Plan, a framework for "Gender Equality and Women's Empowerment: Transforming the Lives of Girls and Women through EU External Relations 2016-2020". The action plan focuses on four thematic areas:
Ensuring girls’ and women’s physical and psychological integrity
Promoting the economic and social rights / empowerment of girls and women
Strengthening girls’ and women’s voice and participation
Shifting the Commission services’ and the EEAS’ institutional culture to more effectively deliver on EU commitments.
To implement the Gender Action Plan, the EU Delegation to Mozambique and the 12 Member States represented in the country, supported the Ministry of Gender in the process of elaborating of the Gender Country Profile, launched in November 2016.
The Spotlight Initiative
As part of the efforts to preventing violence and towards achieving gender equality, the European Union and the United Nations launched on 20 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, irrespective of their age, sexual identity, ethnicity, migration status, or socio-economic situation. Of the total amount, EUR 40 million is dedicated to Mozambique.
Together, the EU and its Member States are at the forefront of the response to all major crises around the world. In addition to the more medium and long term development assistance, the EU also provides humanitarian aid through its Directorate-General for European Civil Protection and Humanitarian Aid Operations (DG-ECHO, referred to as ECHO).
The mandate of ECHO 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.
Aid is being 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.
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 External Investment Plan 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 External Investment Plan 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 newly created European Fund for Sustainable Development (EFSD) will be the 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 2020.
The EU approach is in perfect harmony with the G20-Africa Partnership, focused on strengthening sustainable private sector involvement, investments in infrastructure and renewable energies, and support sustainable economic development for growth.