“Minerals will not solve all our problems…” says President Guebuza.

May 10, ’12 9:06 AM
President Guebuza

 

(2012-05-10) Mozambican President Armando Guebuza warned on Monday that the social and economic problems faced by Mozambicans will not be solved simply through the exploitation of mineral resources, but through integrating the mining sector with other areas of the economy.

Guebuza was speaking in London at a meeting with the Mozambican community resident in Britain.

He recognised that Mozambique could have a brilliant future thanks to the mineral resources it possesses, and others that may be discovered in the future. However, this will only come about gradually.

“The minerals we have discovered will not give their best results immediately”, he said. “It will take time for us to recover the investments made, It will take time but that doesn’t mean that we won’t have gains. We shall gain from the jobs created and the taxes paid. Gradually there will be benefits, although not at the level that would be desirable”.

“This situation is creating impatience”, Guebuza admitted. “But we must keep a cool and clear head, because the benefits will come”.

Over the last decade, the President added, Mozambique had maintained an average annual growth rate of between seven and 7.5 per cent.

“We used to have a per capita income of 80 US dollars and today it’s more than 400 dollars”, he said. “It has been rapid and sustainable growth, which has kept on throughout recent years, and even with the global financial crisis growth has not faltered”.

Guebuza explained that this growth was not due simply to coal and natural gas. “We are growing sustainably without gas, and even without coal”, he said. “I would like to remind Mozambicans that we should not think that the use of these resources will solve all our problems”.

“What must happen is that the resources are used to speed up development, and thus bring us to accelerate the fight against poverty”, he added.

Guebuza recognised that recent economic growth is not yet reflected in an improved quality of life for Mozambicans. “Often the question is asked – if there is growth, why is it not reflected in people’s pockets?”, he said. “This is a problem of distribution. The government is distributing wealth through the provision of good quality services, by increasing access to clean water, building schools and improving their quality, and bringing electricity and telephone services to the population”.

He pointed out that, over the last ten years, these services have become more accessible to citizens. In the recent past, there were parts of the country where people had to walk for 200 kilometres to reach the nearest health post. That maximum distance has now been cut to 40 kilometres.

“This is important and has a great impact on people’s lives”, said Guebuza. “These results are most visible for people who live in the countryside”.

Guebuza also noted that access to higher education used to be limited because there were only two universities in the country, both in Maputo. But now it is possible to attend university courses in all 11 provinces.

About 250 of the 600 Mozambicans living in Britain attended the meeting.

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Firmino Mucavele rightly says…..”You can’t eat minerals!”

May 9, ’12 12:37 PM

One of Mozambique’s top economists, Firmino Mucavele, has warned that, despite the rapid development of the mining industry, Mozambique will go nowhere if it does not build up its agriculture. Cited by Radio Mozambique, Mucavele, who was recently distinguished by NEPAD (New Partnership for Africa’s Development) for his work on agricultural development, warned that you can’t eat minerals – minerals run out, and the resources derived from mining do not guarantee food security. According to Mucavele, “70 to 80 per cent of the investment in mineral resources is foreign and only 20 per cent of the returns stay in Mozambique”. The minerals, he claimed, “will merely contribute to the image of the country. They are not a solution to food security or to our sustainable development”. Mucavele called for far-reaching reforms in the agricultural sector, with the adoption of a pragmatic and realistic policy for transforming subsistence agriculture into commercial farming. He argued that Mozambique will only have an agriculture with high levels of production and productivity, which contributes to the development of other sectors, when it banks on commercial agricultural, with small and medium seized companies. He warned that there is no coordination between different value chains, and there is no harmony and congruence between the policies and actions defined for the various sectors of development. “As a result, no action or policy is successful”, he said, “If there is financing for seeds, there is no financing for transport or storage. If there’s a railway line, there’s no agro-processing. There are no linkages between production, processing, storage and distribution”. Mucavele also pointed to the low level of agricultural research, and the lack of connections between research, extension and innovation. There was a lack of investment in research, and a failure to use adequately the few staff trained in this area that the country possesses. Illustrating the shocking lack of agricultural staff, Mucavele said that Mozambique only has 800 rural extensionists –who have to deal with about 36 million hectares of arable land. Smaller countries have much larger numbers of extensionists. Thus in Malawi, ten years ago, there were 3,150 extensionists, and in tiny Swaziland there were 2,300. Under the government’s current agricultural programme, Mozambique hopes to raise the number of extensionists to between 6,000 and 8,000. Even so, the number will remain well below the country’s needs. Mozambique was good at drawing up plans, Mucavele said – but they were never fully implemented. “We have an inexhaustible wealth of policies”, he said. “What we need to do is take some of them and implement them, linking theory with practice”.

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Check out the Guardian article….

Apr 27, ’12 10:28 AM

Congrats to David Smith for his excellent article, challenging many of us in development in Mozambique and other resource rich countries to ask the ever mosre important question — who will gain from all of this future wealth?

Check out David’s article at :

http://www.guardian.co.uk/world/2012/mar/27/mozambique-africa-energy-resources-bonanza

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Thomas Friedman is right….Pass the Books. Hold the Oil.

Apr 27, ’12 10:16 AM

Thomas Friedman is right. It is only “great to have oil, gas and diamonds,” if “they’re used to build schools and a culture of lifelong learning.   

 

In Mozambique, the prospect of billions of dollars of revenues from recently discovered natural gas and coal present a tremendous developmental opportunity for investment in future generations.   With capital inflows for investment in the mining and gas sectors forecasted to reach above $60 billion by 2018, the Government of Mozambique has the opportunity to plan sustainable increases in social sector financing.  Expected revenues could reverse the reality that only 15% of its children complete primary school and almost 45% of its children lose precious cognitive skills through stunting in their early years.  Investments in the extractive sector can be leveraged to ensure that public finances through taxes and royalties benefit Mozambique’s children and their families in an equitable manner.

Check out the NYTimes’ Op-Ed at…….

http://www.nytimes.com/2012/03/11/opinion/sunday/friedman-pass-the-books-hold-the-oil.html?_r=1

 

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Taxes for good?

Feb 13, ’12 5:40 PM

I spend a lot of time thinking about the revenues from the extractive industry and the wait predicted by some experts as to when the monies will actually be visible in the national treasury.  My concern is that children don’t have the luxury of waiting a decade or two for coal and natural gas revenues to flow in and out of the national coffers and eventually into the pockets of their parents – through decent employment, their teachers – through quality education and their community health clinic – through basic vaccines and other core services.  Children need their rights fulfilled now.  Children are stunted due to inadequate nutrition and care practices today and will not have the capacity to grow into the leaders of tomorrow if they are physically and cognitively compromised in their first two years of life.  Investing in social protection systems could make the difference to the most vulnerable and give them a fighting chance for their futures.

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If I had a million dollars…

Feb 4, ’12 11:25 AM

Many of us could spend a few moments daydreaming about winning the lottery or finding a pot of gold at the end of a rainbow.  But in resource rich countries like Mozambique, the discovery of coal and natural gas, among other mineral resources, can place a Government within a tempest of rapidly evolving circumstances where decisions with regard to the legal, policy and fiscal regimes can mean the difference between sustainable development for all or battling the resource curse for decades to come.

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Building the investment case for children

Jan 24, ’12 10:16 AM

The extractive industries are the most important developmental opportunity and challenge in Mozambique today.  There is great potential for the coal, gas and other mineral resources to act as a driver for development.  There are also large risks involved.  Tete province, the current centre of mining exploration and production, is already one of the poorest provinces in the country with 60% of children experiencing deprivation-based poverty: only 69% of children are in primary school and 48% of children are stunted.  The mining sector is already causing substantial price inflation in the province, particularly for food, which will impact poverty rates and the nutritional status of children.  Anecdotal evidence from families in resettlement areas indicate even less access to basic health services and education, while long term environmental effects may lead to even more precarious livelihoods for the populations in and around the mines in the years to come.

UNICEF Mozambique is developing a strategy to protect children and their families from any harmful impacts of the extractive industries, including those that may arise from relocation and resettlement of communities, the environmental impacts of exploration and extraction of resources and ensure their access to justice, if any violations occur.  At the same time our long term partnerships, with the Ministries of Finance and Planning as well as with the IFIs and donor partners here, have us well positioned to engage on the potential allocations of national wealth created by the extraction of non-renewable natural resources through high quality Government social development programmes.  Our strategic entry point in advocacy to date has been linked to ensuring all Mozambican children and their families benefit equitably from their “national inheritance.” 

But what about you?  Where do you stand on the resource curse versus blessing debate?   What impacts have you seen in your country?  in your thematic area?  Let’s join forces to bring sustainable development and equitable access to the resource wealth to future generations!

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Welcome to The Chapa!

Nov 29, ’11 10:08 AM

Grab a seat and hold on, this is going to be an exciting ride. With international human rights standards as our roadmap, our destination is the future of Mozambique where all children’s rights are fulfilled.  The journey will be long and bumpy, with unexpected diversions a certainty.  The trip will also be expensive and staying the course may require tough choices along the way.

An ever present factor along our social policy journey is the debate over identifying fiscal space in the budget for social and economic development.   But what is fiscal space?  It depends who you ask, i.e. it means different things to different people in the development, financial and aid communities.   Experts have defined it as space to spend a government’s budget without jeopardizing the stability of the economy.   The same experts debate how certain resources in the budget can be labeled or calculated.  And yes, yet another group of experts, including the UN, define it in relation to how government’s mobilize resources to combat poverty and achieve the Millennium Development Goals (MDGs).

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All aboard the Social Policy blog

Nov 25, ’11 12:14 PM

In Lewis Carroll’s, Alice in Wonderland, Alice asks the Cheshire cat to tell her the way to go. “That depends a good deal on where you want to get to,” answers the cat. “I don’t much care where,” Alice replies, “as long as I get somewhere.” The cat responds, “Oh, you’re sure to do that, if only you walk long enough.”

Alice in Wonderland

Social policy is about achieving social outcomes in cost-effective ways. It’s the final destination of the long path of sustainable development. But choosing the ‘right’ route (the means) to achieve those goals is as important as the final destination. And understanding the bumps and detours along the way makes all the difference…

The Chapa will take us down that road, asking questions at each stop and collecting innovative ideas along the way. <

Join the ride.

 

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