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                   Country Strategy Paper


Development Cooperation Ireland
Embassy of Ireland

Cooperaçâo Irlandesa
Embaixada da Irlanda

February 2001
                        Development Cooperation Ireland
                            Country Strategy Paper

                                    Table of Contents

Table of Acronyms ..................................................................................... ii

Map of Mozambique ................................................................................. iii

Executive Summary .................................................................................. iv

1. Introduction ............................................................................................ 1

2. Political Context..................................................................................... 2

3. Economic Context: ................................................................................ 3

4. Poverty Context .................................................................................... 5

5. Key Cross Cutting Issues ..................................................................... 6

6.Current Programme ............................................................................... 9

7. Future Strategy .................................................................................... 15

8. Conclusion ........................................................................................... 24

Appendix 1 ............................................................................................... 25

Table of Acronyms

ADP       -   Accelerated Demining Program
AMODER    -   Mozambican Association for Rural Development
CIRESP    -   Commission on Public Service Reform
COPA      -   Technical Committee
EU        -   European Union
ESSP      -   Education Sector Strategic Plan
FRELIMO   -   Mozambique Liberation Front
GAVI      -   Global Alliance for Vaccines and Immunization
GDP       -   Gross Domestic Product
GNP       -   Gross National Product
GOM       -   Government of Mozambique
HIPC      -   Heavily Indebted Poor Countries
IA        -   Development Cooperation Ireland
MAE       -   Ministry of State Administration
MICOA     -   Ministry of the Environment and Coordination
MISAU     -   Ministry of Health
NGO       -   Non Governmental Organisation
NORAD     -   Norway Development Agency
PAAO=s    -   Annual Planning & Activities Budget
PARPA     -   Absolute Poverty Reduction Action Plan
PROAGRI   -   Agricultural Sector Public Expenditure Program
PRSP      -   Poverty Reduction Strategy Paper
RENAMO    -   Mozambique National Resistence
SDC       -   Swiss Development Cooperation
SIFAP     -   Training System for Public Administration
SWAP          -      Sector Wide Approach
UNADP     -   United Nations Accelerated Demining program
UNDP      -   United Nations Development Program
UNICEF    -   United Nations Children=s Fund
UN        -   United Nations
UTRESP    -   Technical Unit for the Reform of the Public Sector

Map of Mozambique

Executive Summary
Since the end of the civil war Mozambique has maintained a stable macro economy and
produced consistently strong economic performances with annual growth rates of over
7%. (Due to the serious flooding, the year 2000 was an exception, with a reported
growth rate of 3.8%). Despite these many years of solid economic performance
Mozambique remains one of the poorest countries in the world, with a Human
Development Index ranking of 168 out of 174 ( 2000).

Ireland began its Aid programme with Mozambique in 1996 and it has grown from
IR,3.9million in 1997 to IR,11.8 million in 2000.

This Country Strategy Paper is the result of a number of programme reviews and key
studies, culminating in a multi-disciplinary planning mission in September 2000. The
Country Strategy Paper will serve as the guideline and management planning tool for
the Development Cooperation Ireland Programme for the period 2001 to 2003. The
new programme will remain focused on basic needs and poverty reduction while taking
into account the emerging trends, particularly in the moves towards sector programming
and budgetary support. The programme will retain and develop its provincial
programmes. These have proved effective and have provided valuable experience of
the issues and challenges facing the rural population. They have also informed the
programme in its interventions at national level. The estimated budgets for the three
years are , IR15.5 million in 2001, Ir 23 million in 2002 and Ir30.2 million in 2003.

The overall objective for the Mozambican programme for 2001 t 2003 is to A
Contribute to the reduction in Poverty in accordance with the Government of
Mozambique=s own National Development Strategy@. The program will have 5 key
focal areas.

(1) Provincial :Support to the Provincial Governments of Niassa and Inhambane and
their lower levels of administration. Concentrating on building local human and
institutional capacity, in order to plan, manage, coordinate and implement development
in their areas and sectors.

(2) Social Sectors/Basic Needs: support for the implementation of programmes which
address the basic needs of the Mozambican population, and in particular, those aimed
at improving the quality of Health and Education Services delivered. This includes
contributing to reducing the impact of HIV/AIDS.

(3) Productive Sector/Infrastructure: support to the productive and infrastructural
sectors which will assist in the enhancement of the incomes for poorer people through
the increased agricultural production and access to markets.

(4)Participatory Democracy/ Good Governance: support to the process of
democratisation, human rights, transparency, accountability, good and efficient
governance, and participation at all levels.

(5) Budgetary Support: support to the general budget to enhance the revenue
available to the GoM in carrying out it programmes of poverty reduction and

development, as well as enabling it to build the capacity of it own institutions.

1. Introduction
1.1 Mozambique has been a priority country for Development Cooperation Ireland
since 1996. The Programme has grown from ,3.9million in 1997 to ,11.8million in
2000 against the background of unprecedented economic growth in Mozambique, albeit
from a very low base.

1.2 Mozambique ended its vicious civil war in 1992 through the signing of the Peace
Agreement in Rome . National and Presidential elections were held in 1994 and again
in 1999 in which Joaquim Chissano and the Frelimo Party ( which has governed
Mozambique since independence in 1975 ) were victorious.

1.3 Mozambique has an area of 799,390, with a coastline extending for over
2000 kms. Its population is estimated at 17mn. The country is placed no.168 out of a
total of 174 countries on the UNDP Human Development Index (2000). As indicated in
the UNDP National Human Development Report for Mozambique(1999) there are
regional disparities in the extent of poverty, Maputo and Maputo Province comparing
favourably to the rest of the country.

1.4 Since the first democratic elections in 1994 real growth has exceeded 8% pa on
average and from 1996- 1998 it exceeded 10% making Mozambique one of the fastest
growing economies in the world. The floods emergency in February/ March 2000
resulted in a deterioration of economic performance to 3.8% in that year. This
impressive overall performance is due to a number of factors, including : the advent of
peace, the introduction of a multi-party democratic system and a decisive move away
from a closed centrally planned economy towards greater openness to market
mechanisms. The donor community has also assisted in this economic recovery by
providing extensive financial and technical support to the Government throughout the
transition period .

1.5 After a one year pilot programme in 1997, the parameters for Development
Cooperation Ireland support were laid out in a three year Plan for 1998 -2000. The
essentials of the Plan were : area-based programmes in the Provinces of Niassa and
Inhambane , support for the development of Health and Education sectoral
programmes at national level and support for Multilateral Debt relief. An Interim Review
of Ireland=s Country Programme was undertaken in November 1999. It concluded that
the three year Plan continued to be relevant and appropriate to the Mozambican context
and to the development policies and plans of the Government of Mozambique.

1.6 Following the interim review a Review was undertaken of the Area -based
Programmes in June 2000. Based on the experience of the first phase, it was
recommended to continue the programmes for at least another three years. Design of
a second three- year phase of the area-based programmes is to be based on the
following principles :

a) The consolidation and further increase of the capacity building efforts.

b) The continuation of the sectoral province - wide activities at the same level of
intensity as in Phase1.

c) Real emphasis on community /district development be applied through the initiation
of district level programmes. Each province should have one pilot district, at a later
stage to be expanded to another pilot district.
1.7 Preparations for the Mozambique Programme Strategy were facilitated by the
above-mentioned Interim Review and Area-based Programmes Review as well as the
August 2000 Review of activities in the area of Good Governance, Democratisation and
Human Rights, the socio- economic survey of the Chiconono- Mavago road in Niassa
Province and suggested guidelines prepared by local consultants in collaboration with
provincial officials in the Provinces of Inhambane and Niassa .

1.8 The Country Planning Mission took place in Mozambique from 11-22 September
2000. The Team included a repersentive for the Mozambican Ministry of Foreign
Affairs, Specialist Support staff from Dublin and Kampala, local consultants and
management staff from the Embassy in Maputo.

2. Political Context
2.1 Mozambique achieved its independence from Portugal on 25 June 1975. The first
President, Samora Machel, was also leader of the sole political party, Frelimo. In 1977
Frelimo declared itself to be a Marxist- Leninist party. Covert assistance from the white
minority regime in Southern Rhodesia was stepped up and channelled to a group that
came to be known as RENAMO. It adopted tactics designed to inflict damage on the
economic and social infrastructure of Mozambique.

2.2 Following the independence of Zimbabwe in 1980 the support for RENAMO came
from the apartheid regime in South Africa and some groups in western countries.
RENAMO grew rapidly in size and in military effectiveness, which enabled it to destroy
the social and economic infrastructure in wide areas of the country. In 1986 President
Samora Machel and some of his key advisers were killed in a still-unexplained air crash
on South African territory
By 1987 the war had devastated the economy and the country had become increasingly
dependent on foreign assistance. At this juncture the Government decided to introduce
far-reaching reforms, abandoning its former Marxist philosophy in favour of political
liberalisation and a more market-orientated approach. In 1990 the principle of a multi-
party system and other reforms were enshrined in a new constitution.

2.3 Peace consultations initiated in 1990 culminated in a peace accord signed in Rome
in October 1992 by the leaders Of FRELIMO and RENAMO. In 1994 the first multi-
party elections were held, in which FRELIMO secured an overall majority.

2.4 The political stability obtaining in Mozambique since 1994 and the impressive
macro-economic growth under the leadership of President Joaquim Chissano led most
observers to discount the chances of RENAMO in the second Presidential and
parliamentary elections in December 1999. However, the results were much closer than
expected. Of the total of 250 seats in the national assembly, FRELIMO won 133 and

RENAMO and its allies 117. In six of the ten provinces the opposition now has a
majority of the national assembly seats.
In the presidential elections the opposition candidate, Afonso Dhlakama, secured 48
per cent compared to President Chissano=s 52%. Although these results were
validated by a decision of the Supreme Court the opposition has not officially accepted
 the results on the basis that the counting process was flawed.

2.5 A major challenge for the Government is to ensure a more even countrywide
distribution of the economic gains that have been made over the past five years.

3. Economic Context:
3.1 Mozambique is one of the poorest countries in the world with a GNP per capita of
US$230, and ranks 168 out of 174. (See Table 1 for comparisons to other
Development Cooperation Ireland Priority countries). Two out of three Mozambicans
live in absolute poverty, mainly in rural areas. Life expectancy at birth is 46 years and
only four in ten adults can read and write. At least one in seven Mozambicans are
already infected with HIV and the numbers are rising steadily.

3.2 With an area of 802,000 sq km, slightly greater than that of Zambia, Mozambique is
twelve times the size of Ireland. Population is currently estimated at 17 million, but
population density is relatively modest at 22 persons per sq km (compared to 108 in
Uganda). A striking feature of Mozambique is its extensive coastline which measures
2,500km, one of the longest coastlines on the continent. This feature characterises it
as an important seaport and access corridor for its western landlocked neighbours of
Zimbabwe, Zambia and Malawi. The country is well endowed with significant rivers
basins such as the Zambezi and Limpopo draining west-east. In addition, Mozambique
has vast areas of high potential agricultural land with low population densities,
particularly in the north.

3.3 The economy has endured a number of significantly adverse events since
independence in 1975. A loss of human resources following the mass exodus of
Portugese after independence, the implementation of unsuccessful socialist policies
and a brutal civil war which did not end until 1992, left the economy in tatters.
Rehabilitation of infrastructure and pro-growth economic policies have seen the
Mozambican economy experience vigorous and impressive growth which over the past
five years has averaged 8.5%between 1995 and 1999 (in 1998 it reached 11.1%).

3.4 The Government=s tight monetary policies have brought inflation under control. It
has fallen from over 54% in 1995 to 3.8% in 1998. It rose again in 1999 to 4.8%.
However, the economic impact of HIV/AIDS will almost certainly be devastating, as the
effects are likely to wipe out many of the hard won gains of recent years.

3.5 The Government has pursued open economic policies with an emphasis on private-
sector led growth, and has implemented a comprehensive structural reform programme.
The privatization programme which began in 1991 saw the privatisation of around 90
large-scale enterprises, and a further 1,200 small and medium-scale enterprises by
1999. A restructuring plan for the national railway company is now underway and the
management of the water companies serving the five major cities has been

concessioned to the private sector. However, investors in Mozambique still complain at
the high level of red tape and measures are being enacted to address this issue. There
is also some question regarding the competitiveness of the financial sector.

3.6 Domestic revenue mobilisation in Mozambique by comparison to other neighbouring
countries is low, at 10.8% of GDP in 1999 and an expected 11.5% in 2000 (the latter is
unlikely following the floods). Improving the tax structure and increasing domestic
revenue mobilisation are important and immediate challenges to the Mozambique

3.7 The local currency, the Metical, has continued to depreciate against the US dollar.
It fell by 13% in the first six months of 2000 but in relation to the South African rand by
only 3%. The pressure on the Metical reflects the continued strength of the dollar and
the effect of increasing fuel costs.

Future Outlook:
3.8 The flood disaster earlier this year has had an adverse effect on the Mozambique
economy, particularly with regards to infrastructure and agriculture. The main road
north from Maputo still requires costly detours which greatly hinders communication and
movement of goods. Agriculture which accounts for 30% of GDP is likely to see a fall of
7% during 2000 with a slow recovery in 2001. GDP growth has been revised
downwards to 3.8%, but recovering to 10% in 2001. The effects of HIV/AIDS are as yet
unknown but it will undoubtedly pose a major threat to development in Mozambique.

3.9 Mozambique has been promised around US$453m at a special UN conference in
Rome to assist the country build up its economy and infrastructure following the floods.
Implementation of this programme will cause inflationary pressures which may see a
rise to double digits over the short term. The after-effects of the floods will also have an
adverse effect on revenue mobilisation which is unlikely to rise as per Government

3.10 Following the floods the Bretton Woods institutions and a number of other
creditors agreed to provide complete debt relief for twelve months to April 2001. This
provides a saving of $73m and added to Mozambique=s successful achievement of
decision point at HIPC, will result in an annual debt repayment liability in 2000 of around
$15-25m. In future years debt repayments are estimated to be around $50 m/annum,
down from $175m pre-HIPC. To reach the anticipated completion point in March 2001,
the Government must produce an acceptable Poverty Reduction Strategy Paper
(PRSP). An interim PRSP is already available and wider consultations with civil society
and the private sector are on-going.

3.11 Since 1997 the fiscal deficit excluding grants has been around 11-12 per cent
(12.1% in 1999). This was higher than anticipated, due to expenditure overruns caused
by the extra costs of the national elections. In 2000, the overall deficit is expected to be
12.9% but could rise to 16% of GDP as a result of the floods. It should normalise again
in 2001.

3.12 Though the economy has had a major setback as a result of the floods, especially
the agriculture sector, it is expected that this will be offset by the commencement of

     production from the $1.3 billion Mozal aluminium smelter which has begun operations.
     It is expected to produce 245,000 tonnes of aluminium per year. There are other
     potential large-scale export earners in the pipeline, such as the Maputo Iron and Steel
     Project, aiming to produce 3.5 million tonnes of steel slabs for annual export; the
     Maputo Development corridor which involves upgrading the road from Maputo to
     Johannesburg is expected to generate projects worth $5 billion. Studies are also
     currently underway to investigate the feasibility of reviving coal production in Tete
     province, the construction of an iron ore reduction plant in central Mozambique and the
     exploitation of heavy sands in Zambezia. The extent of interest in investment in
     Mozambique is encouraging for the Government and the economy at large which if
     accompanied by increased agricultural production, points to a positive economic
     outlook. However, there are some concerns that the difficult political and economic
     situation in Zimbabwe will have an adverse effect on the Mozambican economy
     particularly the traffic through Mozambican ports.

     3.13 There are three areas of focus in the donor GoM dialogue in relation to economic
     and financial management, revenue mobilisation, budget and fiscal transparency, and
     reform of the financial sector. These issues will also be the focus of the benchmarks for
     the proposed framework for macro-financial support to Government.

     Table x.x        Economic and Social Indicators for Mozambique

                                    MOZ     ETH            TAZ        UGA      ZAM      LES     SSA         IRL

Area km sq                          802     1104           945        241      753      30      24267       70

Population million                  17      63             33         21       10       2       642         4

Population/ sq km                   22      63             37         108      13       69      27          54

GNP per capita $                    230     100            240        320      320      550     500         1916

Life expectancy at birth Males      44      42             46         42       43       54      49          73
Infant mortality per 1000 live      134     107            85         101      114      93      92          6

Child malnutrition % children <5    26      48             31         26       24       16      33          -

People living with HIV/AIDS         85,00   2,600,00       1,400,00   930,00   770,00   85,00   20,736,10   1,700
Total number (age 0-49) 1997        0       0              0          0        0        0       0

Adult rate of HIV/AIDS (% age       8.35    9.31           9.42       9.51     19.07    8.35    7.58        0.09
15-49) 1997

Access to safe water % popln        32      27             49         34       43       52      -           -

Illiteracy % > 15yrs 1998 Females   73      70             36         46       31       7       49          -

Net enrollment rate 1997:           40      35             48         -        72       69      77          100

                            22      25           -     -        42       73      55         100

Source: World Development Report 2000/2001

4. Poverty Context
4.1 Mozambique is one of the poorest countries in the world, the UNDP Human
Development Index ranks it as 168 out of 174. The 1996/96 Conditions of Life Study
indicated that between 60 and 70 percent of the Mozambique population live in
absolute poverty. Poverty is more widespread in rural areas then in towns, with the
north of the country and the provinces of the central region generally being the poorest.
Poverty and limited access to social services affect women and children more than
men, both in rural and urban areas. The poorer families are typically large with a lower
education standard and a dependance on one income. HIV/AIDS will increase poverty
especially among young people and women, who are the most affected groups.

4.2 Long years of civil unrest and conflict have left the country without much social
infrastructure and human capacity to cater for the basic needs of the population. The
rural population is also adversely affected by an inadequately developed infrastructure
that hinders access to markets that would enable them to boost their incomes by selling
crops. The Ministry of Finance and Planning define the concept of poverty as A the
inability of individuals to ensure for themselves and their dependents as set of minimum
basic conditions for their subsistence@
 ( MPF 1998)

 Indicator                                                               1999
 Infant Mortality (/1000)                                       134
 Under Five Mortality(/1,000)                                   213
 Life Expectancy at Brith                                      43.8
 Access to Safe Water                                            46
 Literacy Rate                                                   57
 Female Literacy                                                 27
 Fertility Rate                                                 5.2
Source: World Development Report 2000/2001, World Bank and Human Development
Report, 2000, UNDP.

4.3 In April 1999 the Government of Mozambique launched its Action Guidelines for the
Eradication of Absolute Poverty. This will the main policy and strategy framework for
combatting poverty in the medium and long term. The goal is the reduction of the
incidence of absolute poverty from the current levels of 70% to around 50% in the next
ten years. The Action Plan for 2000 to 2004 ( PARPA) from these Guidelines is now
been developed to reach the medium term target of 60% by the 2004. The PARPA
underlines the need to maintain the necessary macro-economic framework and social
conditions for sustainable economic growth with a view to promoting development in
rural areas, women=s socioeconomic status, social equity and food security. This Plan
will also be taken as the basis for the design of a Poverty Reduction Strategy Paper (

5. Key Cross Cutting Issues
5.1 Because of its vast size and relatively sparse population, Mozambique does not
suffer from any widespread environmental problems. It enjoys a considerable wealth of
natural resources and the challenge facing the country is to exploit these resources in a
sustainable manner. The Government of Mozambique has shown a commitment to
conserving the environment. A Ministry of the Environment (MICOA) was established in
1997. A strong legislative base has been put in place (Forestry and Wildlife Law, Land
Law), a Land Commission has been established and an Environmental Policy and
Management Plan adopted. Nevertheless, pockets of deforestation, soil erosion, and
coastal erosion exist and some environmental concerns surround the tourist industry
and some large scale industrial projects.

5.2 MICOA is in the process of establishing offices in the Provinces. It has received
considerable support from a group of donors through a cost-sharing pool operated by
UNDP. Danida and World Bank have also supported the Ministry but through project
modalities. The Ministry has a difficult role which it has not yet fully developed. Its
relationship with the Centre for Investment is particularly fraught and MICOA is
perceived as a Ministry which blocks rather than supports development. A number of
donors are of the view that MICOA has become too involved in implementing projects
and should instead be focussing on raising awareness and coordinating environmental
management across all Ministries. Preparation of Environmental Profiles is considered

5.3 During the Country Strategic Planning exercise, consideration was given to joining
the group of donors who are providing support to the Ministry through a cost-sharing
mechanism. However, despite the considerably expanding budget, resources were not
sufficient to make any meaningful contribution. Instead the country strategy will focus on
mainstreaming environmental considerations and adopting best practice in relevant
sectors such as roads.

5.4 The Constitution of Mozambique states that men and women have equal political,
economic social and cultural rights. The Ministry of Social Welfare is charged with the
responsibility of overseeing Government policy with respect to gender issues whilst
each individual Ministry is responsible for preparing their own concrete gender
strategies. However, the relatively low standing of the lead Ministry has resulted in a
gender approach that is slow and uncoordinated.

5.5 Mozambique is often cited together with South Africa as the country that has the
greatest number of female parliamentarians in the region (28%) as well as an
increasing number of senior government officials (3 Ministers and 5 Vive - Ministers).
However, the challenge is to ensure that gains are sustained, formal representation
translates into meaningful participation, and that decision makers use their position to
introduce and enforce effective policy and legal changes.

5.6 The concept of gender has been repeatedly stressed in various international fora
and Mozambique has a number of institutional mechanisms and specific targets to

promote gender equality. Much needs to be done to operationalise the good intentions.
 Extensive capacity building is required to ensure that gender analysis is included in
SWAps, budget preparation and all other government policies and programmes.

5.7 Subsistence agriculture provides a livelihood for the majority of the population. This
work is largely seen as women=s work and gender inequalities are evident in the legal
structure particularly with regard to ownership of productive assets. In a more formal
setting access to credit is a key impediment to the advancement of female

5.8 Maternal mortality in Mozambique is one of the highest in the world and womens
health issues are generally seen in terms of womens reproductive role alone. In
addition, biological factors render women more vulnerable to contracting HIV/AIDS but
women are often powerless to negotiate for safer sex. As HIV/AIDS spreads across the
region the burden is falling disproportionately onto women.

5.9 As well as having less access to health services, women in Mozambique also have
more limited access to education opportunities. Investment in education is an anti-
poverty strategy and poverty constrains educational opportunities. The governments
focus is primarily on increasing access to primary education, including the need to
address cultural values and structural factors that limit the participation of girls in

5.10 As a first step towards a more comprehensive understanding of gender issues in
Mozambique, Development Cooperation Ireland has, with the Swedish Embassy,
recently supported a gender profile of Mozambique.

5.11 Following the signing of the Peace Accord in 1992, population mobility has risen
dramatically due to re-settlement, migration and tourism. The HIV prevalence rate has
risen in tandem. There are strong indications that the real level of infection is higher
than official reports because, in a country as poor as Mozambique many people die
without any diagnosis and there is a cultural reticence to identify the cause of death as
AIDS. Currently prevalence rates are highest among young people and women

Epidemiological situation:

                                                  1999                     2000
 First AIDS case reported in 1986
 Cumulative total of reported AIDS               17,224                Not available
 Cumulative total of HIV+                       1,400,000                1,474,046
 Cumulative total of AIDS deaths -               83,600                   99,530

 HIV prevalence rate in adults             15.4%                             16%
Source: United Nations Country Assessment 2000

Male/Female Ratio:

                                   1999                                2000

                         Male      Femal         Total      Male     Femal     Total
                                   e                                 e
 People living with      606,08    784,99        1,389,08   642,28   831,76    1,474,04
 HIV/AIDS                9         8             6          4        2         6
 New AIDS cases          42,204    49,624        91,828     48,332   58,900    107,233
 HIV Prevalence in       13.9      16.7          15.4       14.5     17.3      16.0

5.12 The HIV seroprevalence in the country is very diverse. The central provinces of
Tete, Manica, Zambezia and Sofala are most affected as the HIV epidemic appears to
have started earlier in these regions. Another indication that there is significant under-
reporting of the HIV/AIDS rates comes from the fact that Maputo accounts for two thirds
of all reported AIDS cases. This is despite the fact that it has lower levels of HIV
infections than most of the rest of the country. This is assumed to reflect a greater
access to health and diagnostic services in Maputo. In addition, information, education
and communication is most concentrated in the capital city.

5.13 Existing data is based on only 5 sentinel sites. No routine sentinel surveillance has
been implemented in the northern region or in rural areas. However, by the end of 2000
the Ministry of Health will establish sentinel sites in all provinces.

5.16 The national response to the epidemic was initiated in 1988 with the creation of the
National AIDS Control Programme (NACP). This was situated in the Ministry of Health
and participation of other Ministries was limited. In 1999 the Government formulated a
National AIDS Strategic Plan (NASP) 2000-2002.

5.17 In 2000 the Government formed the National AIDS Council (NAC) to coordinate
and structure the response to AIDS. The NAC is within the Office of The Prime Minister
which reflects its higher profile and the multi disciplinary response to the epidemic. The
business sector and NGO=s and CBO=s are also formulating their response and
coordinating with the NAC but the situation is certain to get worse before it gets better.

6.Current Programme
Public Sector Reform

6.1 In general, Mozambique does not have a strong point of departure when it comes to
competence in public administration. Of the present number of public servants of
approximately 108,000, 52% did not complete the basic education cycle (i.e., less than
seven years), 29% have attained the basic level (seven years), 16% have attained
secondary school level ( twelve years). Only 3% have completed higher education

6.2 In the Provinces, cities and districts outside Maputo, mid-level personnel are scarce
and university trained administrators are few. However, a considerable number of public
servants are below 45 years of age, indicating that any reform and retraining
programme will be of potential benefit to the public service for many years to come.

6.3 In recent years, the Ministry of State Administration (MAE) has undertaken some
reforms. These have included the creation of 33 new elected municipalities
(autarquias), the establishment of a new careers and salary structure and an
unsuccessful attempt at salary decompression. However, most recently the government
has begun to address the question of reform more seriously and to look at what kind of
structures might be required to design and implement a reform programme.

6.4 In March 2000, the government established the Inter-Ministerial Commission on
Public Service Reform(CIRESP) which is chaired by the Prime Minister with the Minister
for State Administration (MAE) as deputy chair. To service this Commission and to
provide research support and policy guidance, a Technical Unit for the Reform of the
Public Sector(UTRESP) has been created under the Directorship of the former
Secretary General of Education. The Unit has four additional unit managers with
responsibility for developing policy and plans for public service reform in the following
      Good Governance, Transparency and Ethics.
      Administrative Reform/Human Resource Development
      Financial and Political Management.
      Private Sector Development and >Quick Wins=.
      Decentralisation and
      Salaries and Career Structures.
At present , a study on the final area is being undertaken under the auspices of the
World Bank. Development Cooperation Ireland in 2000 has contributed to the budget of
UTRESP to allow for the effective operation of the unit.

Capacity Building
6.5 In addition to the above initiative, since late 1998, the GOM has supported a
capacity building initiative in the form of SIFAP- The Training System for Public
Administration. The objective of SIFAP is to strengthen the capacity of public officials
and administrators in the delivery of public services. It aims to cover future training and
capacity building needs based on training programmes in public administration using
both formal (middle and higher level civil servants) and non-formal approaches.

6.7 The SIFAP programme is in two phases, phase one of 2 years of which one year
has elapsed and a preliminary implementation phase two of 5 years which it is
envisaged will begin in mid-2001.The project will then become the permanent capacity

building vehicle for the Mozambican public service.
At present, the main project components are focused on
      rationalisation of the capacity building initiatives across all Ministries.
      the creation of a modular system of training linked to career development
      the development of a distance education initiative
      curriculum development
      training of trainers
      carrying out a training needs analysis and identification of target groups
      developing, upgrading and regionalising the present Institute for Public
The project is located in the MAE under the Director for Public Administration and is
guided by a Consultative Committee with membership from MAE, the Ministry of
Education and the Ministry of Planning and Finance.

6.8 The current phase of the SIFAP programme is being funded by UNDP, NORAD
and Development Cooperation Ireland and we have contributed approx. 10% of the
budget. It is expected that this preliminary phase will end by April of 2001 and the
implementation phase will be launched with a formal policy document in July of that
year .The project complements our capacity building programmes in the Provinces.

6.9 Emphasis on education is a key strategy of the Government of Mozambique in its
fight against poverty. Economic, political and social development are seen as
dependent on making education accessible to all Mozambicans and ensuring that it is
relevant and of good quality. Poor educational levels have been identified as
determinants of poverty and the particularly low levels of participation and achievement
 of girls, and those living in rural areas, are constraints to development. The
Government=s development strategy has a focus on expansion and improvement in the
education system and is underpinned by the belief that increasing access and
improving quality of basic education are powerful mechanisms for redistribution and
promotion of social equity and for enabling citizens to effectively participate in
democratic processes. Education has a key role to play in the promotion of health and
nutrition, the fight against HIV/AIDS and the development of the economy.

6.10 During the past four years IA has been supporting education activities at Provincial
levels in Niassa and Inhambane and at National level. In the two provinces, support was
provided for in-service training for newly recruited teachers, classroom construction and
furniture and for adult literacy. Over the past year Development Cooperation Ireland
supported the process of developing the provincial strategic plans. These are now
being translated into operational work- plans and will provide the basis of more strategic
and co-ordinated support over the next three years. The experience has enabled IA to
become familiar with the sector, its problems and challenges, and to build strong
partnerships on which to base its programme of support to education over the next plan

6.11 At national level funds have been provided for Caixa Escolar (textbooks and
educational materials). Development Cooperation Ireland has participated in the
process of developing the ESSP and is represented in the Ad Hoc group and the COPA

(the highest level technical committee).

IA support in the fight against HIV/AIDS started in Inhambane province in 1999 with
assistance to the local health department provided by AMREF, a regional NGO. The
programme was geared to providing the social education and communication
component complementary to health sector activities. A one off grant was given to the
newly established National AIDS Council to assist in setting it up and as a gesture of
IA=s commitment to the fight against HIV/AIDS. More substantial assistance is needed
as soon as the appropriate systems have been put in place.

6.12 Health indicators in Mozambique are among the worst in the world and reflect
endemic poverty, a high burden of infectious disease and poor access to essential
health services. Life expectancy at birth is 46 years; the infant mortality rate is 134/1000
and current estimates would indicate that over 16% of the adult population are infected
with HIV virus. Though overall expenditure on health has increased , it is still very low in
absolute terms. Donor assistance accounts for approx. 50% of public health
expenditure in Mozambique.

6.13 Though the Ministry of Health (MISAU) is committed in principle to moving towards
a health SWAP, progress in this direction has been slow. A lack of management
capacity, disharmony and poor co-ordination between donor agencies and challenges in
the political and physical environment have all contributed to delays in this respect.
However several key >building blocks= are in place which will facilitate a move in this
direction. The MISAU has recently outlined a time frame for developing a Strategic
Health Plan which will form the axis for the development of a health SWAp over the
forthcoming months.

6.14 The focus of the Development Cooperation Ireland programme of support to the
health sector in the initial phase of the country programme was on physical
rehabilitation and recurrent cost support at Provincial level. This was complemented by
an annual contribution to the central fund used to purchase pharmaceuticals
(earmarked for vaccines). However, following an interim review in 1998, Development
Cooperation Ireland support to this sector was re-oriented in a more strategic manner -
to support strategic health policy and systems development at both national and
provincial level. It continued its contribution to the pooling for recurrent costs support to
the two area based programmes and at the national level.

6.15 Following the 1998 review, it was agreed that Development Cooperation Ireland
support at national and provincial level should be consistent and complimentary. At both
levels, Development Cooperation Ireland would support the strengthening of health
policy and the formulation of health plans. This was complemented by financial support
for the development of appropriate support systems and for the funding ( both
earmarked and non earmarked) of the plan. This approach has proved to be very
successful and has ensured that central ministry policy is reflected in the Provincial
Planning process. In addition, Development Cooperation Ireland has played a key role
in facilitating the Provincial Health Directorates in developing their strategic plans. The
involvement of the central ministry in this process has led to a strengthening of its

capacity to provide technical input to other Provinces, for the development of their
strategic plans.

6.16 Development Cooperation Ireland support for MISAU at central level together with
the support that has been given to the Provincial Health Directorates in Niassa and
Inhambane have greatly contributed to our understanding of the health sector in
Mozambique. It has assisted us in placing our support for health development at
provincial level in it proper context. Possibly even more important is the fact that it has
proved possible to channel the experience gained at provincial level into discussions at
central level. In addition, through our direct contribution to the Planning Department of
MISAU we have been able to support the policy-making process at central level.
Experience from our involvement with the programme to date forms a solid basis on
which Development Cooperation Ireland can consolidate and expand its programme of
support to the health sector over the next three years.

6.17 Agriculture accounts for about 34 percent of GDP in Mozambique, even though it
employs up to 80 percent of the workforce. There are 2.5 million small farmers which
account for 95% of cultivation activities, growing food crops and cash crops such as
cashew nuts, cotton, and tobacco for export. Because of the magnitude of the people
involved and the potential development growth possible in the sector, agricultural will
remain central to the Mozambican economy.

6.18 In 1998 the Government and a numbers of Donors agreed to a five year plan for
the development of Agriculture in the country. The PROAGRI programme is the only
fully operational SWAp in Mozambique. Development Cooperation Ireland has been at
the centre of the development of PROAGRI with the Donor Working Group on
Agriculture since it=s inception. Support to the sector is based on an overall framework
of jointly agreed guiding principals and the PAAO=s, the annual work plans and budgets
from each of the components and provinces. There is a system of 6 monthly reviews of
the programme during which progress is monitored, constraints identified and actions
agreed for the next semester. Donor support for the PAAO=s is jointly agreed in the
annual review of PAAO=s workshop in September/ October.

6.19 While there have been problems with the implementation of the programme these
have been due mainly to the low level of capacity at both central ministry levels and the
provinces. However, the programme is perceived as moving forward and some benefits
are already visible on the ground in the provinces. Recently the first ever external audit
of a government ministry took place in Agriculture and while the audit was adverse, due
to a lack of financial information and systems of accountability at the lower levels of
government, it was seen as a good starting point.

6.20 Development Cooperation Ireland has supported PROAGRI at two levels. It has
contributed untied budgetary support at the central level Ministry based on the overall
plans and guidelines for the implementation of the PAAO=s. At provincial level in both
Niassa and Inhambane, support has been focussed on building the capacity of the
provinces to absorb national level funding. All support at provincial level has been under
the guiding principals of PROAGRI.

6.21 Throughout the nationalist struggle and particularly during the civil war, combatants
on all sides used landmines for offensive and defensive reasons. Many mines were laid
in an indiscriminate fashion and have already claimed the lives of more than 10,000
Mozambicans. To date it has been confirmed that 32 types of antipersonnel mines and
19 types of antitank mines, manufactured by 15 nations, have been used in

6.22 With the ending of the war, the mobility of the rural population, in particular, has
risen dramatically. Access to schools, clinics, government services and arable land are
all restricted by the presence of mines. Poor, rural communities returning to their land
are regarded as one of the highest risk groups.

6.23 To date, Development Cooperation Ireland has supported the mine clearing
operations of the United Nations Accelerated Demining Programme (UNADP) in
Inhambane and the work of HALO Trust in Niassa Province.

Good Governance
6.24 Development Cooperation Ireland=s programme of good governance has been
assisting at national , provincial and grassroots level in a number of ways. Apart from
capacity-building programmes described in para.6.5 above, the second national
parliamentary elections in December 1999 were assisted in a number of ways. These
included the financing of three Irish participants in the EU Election Observation Team
and support for 15 pre-election civic education projects in Maputo, Inhambane and
Niassa . An election media monitoring project jointly run by the Mozambican League of
Human Rights and the British NGO ARTICLE 19 was also supported . Fourthly, a
contribution was made to the UNDP project of technical support to the election
process.An important focus of Development Cooperation Ireland=s attention in the
years 1998-2000 has been the situation of prisoners. Development Cooperation Ireland
has supported through the Sant= Egidio Community construction of medical and
sanitary facilities in two Niassa prisons as well as literacy and vocational facilities. It has
also supported the prison component of the UNDP project of support to the Justice
sector. Other areas of support have been for the establishment of three community
radios ( including one in Inhambane Province and one in Niassa Province ) through a
UNDP/UNESCO project. A programme of assistance to a Maputo organisation dealing
with the rights of widows and single mothers has also commenced. In September 1998
, under the democratisation subhead, a visit by the leaders of the FRELIMO and
RENAMO parliamentary parties to Dublin and Belfast to discuss the Irish and
Mozambican peace processes took place.

Feeder Roads:
6.25 Access to markets has been identifies by the Niassa provincial government as one
of the key constraints to development of agriculture in there area. Over the last number
of year the programme has support the rehabilitation of a 35km road from Mwembe to
Chicinono, using labour based methodology. The work is carried out by the contracting
arm ECHMap unit in the Niassa and supervised by the Office of Public Works.

Community Development
6.26 A programme of support was developed over the last number of year to bring the

benefits of development to local communities. District Programmes in Mwembe in
Niassa and later in Funaloura in Inhambane were launched to support these districts to
work with and serve communities. The district programme are split in to two
components, support to the district administration and support to community based
projects. The funding for these programmes is split 35% for the district admin. and 65%
for the community. The community development programme is still in its infancy and in
2000 considerable time was spent planning the options for the future. A Community
Development Officer has been placed in both districts and a number of district and
community projects supported. They have also commenced information gathering and
participatory development activities. A number of PRA=s have been carried out to
empower communities and help them identify their own constraints and challenges.

6.27 In the first phase of the programme, the organisation, AMODER (Mozambican
Association for Rural Development) has been supported with a programme of rural
credit. Four districts in the north of Inhambane Province were identified. AMODER
promotes rural trade networks through the establishment of a revolving fund for the
promotion of the rural trader network which supports the development of productive
economic activities. The pilot phase concentrated on supporting both formal and semi-
formal traders and supporting entrepreneurs who wished to develop new initiatives. This
phase has now come to end and an extensive review is being carried out by another
key donor, the EU, with particular emphasis on the long term sustainability of the

Debt Alleviation:
6.28 As it attempted to recover from the war, Mozambique was severely restricted by its
debt repayment obligations. Debt had reached unsustainable levels and since 1984
Mozambique had been to the Paris Club five times seeking debt relief from its bilateral
creditors. Multilateral debt increased from $113 million in 1985 to $1.6 billion in 1995.
The Governments ability to service these debts was affected by years of war, drought
and low export earnings.

6.29 From 1995 to 1999, inclusive, we contributed to the Foreign Debt Alleviation Fund
for multilateral debt relief. In 2000, Development Cooperation Ireland provided an
additional $2million of debt alleviation as part of our response to the serious floods.

6.30 In June 1999, Mozambique qualified for debt relief under the terms of the Heavily
Indebted Poor Countries (HIPC) initiative. The Government is hoping to reach the
completion point for enhanced debt relief in 2001. If Mozambique reaches this point,
debt service should be reduced to sustainable levels and continued support for debt
alleviation will not be warranted.

7. Future Strategy
7.1 The Country Planning Mission, following discussions with the partners and
stakeholders and taking into account the reviews and sectoral papers prepared,
concluded that the country programme for 1997 to 2000 was relevant to the needs of
Mozambique and that the new programme will build on this foundation. The programme
for 2001 to 2003 will continue to be focused on basic needs and poverty reduction while

taking into account emerging trends, particularly in the moves towards sector
programming and budgetary support. Assistance to reduce the impact of HIV/AIDS will
be an important component. The programme will continue to develop its provincial
programmes. These have proved effective and provided valuable experience of issues
and challenges that are faced on the ground. These have informed the programme in
it=s interventions at national level.

Overall Objective
7.2 The overall objective for the Mozambique Country Strategy for 2001 -2003 is to

AContribute to the reduction in Poverty in accordance with the Government of
Mozambique=s own National Development Strategy@

Programme Strategy

!     To increase the programme size each year for the period 2001-2003 based on
      the Government absorbitive and management capacity ensuring that resources
      are directed at effective and efficient interventions.
!     Support will be within the GoM policy frameworks and focus on the Mozambique
      PRSP sectors through support to the process of development and
      implementation of sectoral plans at national and provincial level. Also promoting
      inter-sectoral linkages and consistencies in the programme. .
!     To increase the level of support to the economic and productive sectors in line
      with the priorities identified by the GoM.
!     Continuing support to provincial governments of Niassa and Inhambane
      ensuring that the impact on poverty reduction remains a key focus, through
      promoting participatory processes at all levels.
!     To participate in dialogue regarding marco-economic support and consider
      providing financial assistance in this area while recognizing the importance of
      good governance activities and interventions to the development of an open and
      transparent government.
!     To have a strong focus on capacity building at national and provincial
      levels and ensuring synergy between the two levels.
!     Putting into effect Development Cooperation Ireland guidelines to ensure a
      strong focus on HIV/AIDS, Gender and the Environment in the programme
!     To establish adequate management capacity for Development Cooperation
      Ireland in Mozambique in light of the rapid expansion envisioned by this strategy.
!     To collaborate closely with other donors and agencies

 Programme Focus
7.3 The Development Cooperation Ireland Mozambique Country programme for 2001 -
2004 will have five key focal areas :

(1) Provincial :Support to the Provincial Governments of Niassa and Inhambane and
their lower levels of administration, concentrating on building local human and
institutional capacity. In order for them to plan, manage, coordinate and implement

development in their areas and sectors.
(2) Social Sectors/Basic Needs/HIV/Aids : Support for the implementation of
programmes which address the basic needs of the Mozambican population, and in
particular, those aimed at improving the quality of Health and Education Services
delivered. A major emphasis will be on contributing to the prevention of HIV/AIDS and
the reduction of its= impact.

(3) Productive Sector/Infrastructure: support to the productive and infra structural
sectors which assist in the enhancement of the incomes for poorer people through
increased agricultural production and access to markets.

(4)Participatory Democracy/ Good Governance: support to process of
democratisation, human rights, transparency, accountability, good and efficient
governance, and participation at all levels.

(5) Budgetary Support: support to the general budget so as to enhance the revenue
available to the GoM in carrying out it programmes of poverty reduction and
development, as well as building the capacity of it own institutions of government.

Provincial Support:
7.4 Support to the Provinces of Inhambane and Niassa will continue over this Country
Strategy period. In line with the Area Based Review carried out in June of 2000 the
number of sectors and the levels of support to each province will be maintained. Future
expansion will build on the foundation of the first three year programme. Funding levels
will be in line with the Provincial Governments ability to absorb and sustain the levels of

7.5 In both provinces it is proposed to continue with the development of the district
programmes as recommended by the Area Based Review. Increased emphasis will be
placed on the building of the district administrations= own capacity to carry out it=s
functions and to genuinely work with its communities. The programme will identify ways
to empower communities to see the opportunities and challenges that face them.
Changes in the institutional setup for districts and developments in decentralisation
policy will be monitored closely.

7.6 In both provinces capacity building of the provincial government and the relevant
administrations is seen as key to the overall success of the programme. In Niassa a
new programme of institutional building and training will be developed in early 2001.
This will build on the existing programme, but take into account the changing situations
at both provincial and national level. The programme will make endeavour to use locally
available trainers and institutions. In Inhambane support will continue to be given to the
GTZ programme of capacity building. It was agreed that Development Cooperation
Ireland would proceed with the provision of a Planning Adviser to Inhambane but that
consideration would be given to funding the post through the Provincial authorities
rather than direct recruitment by Development Cooperation Ireland

In both provinces support will be given to assist in prevention and mitigating the effects
of HIV/AIDS, part of which will be mainstreamed in existing sector programmes.

Additional resources will be made available for establishing and developing local
capacity both in government departments and in the provincial National AIDS Council
units shortly to be established in the Governor=s office in each province.

7.7 In both Niassa and Inhambane, it is proposed that Development Cooperation
Ireland continue its support for the development and implementation of the Provincial
Strategic Health Plans. This support will be effected through a tripartite management
arrangement between the provincial government, SDC and UNICEF. The focus of these
Strategic Plans will initially be on capacity building and the development of appropriate
support systems. Once these institutional arrangements are in place an extension of the
health service network can gradually be instituted.

7.8 It is proposed that there continue to be a formal mechanism to ensure that the
experience of our engagement with MISAU at central level is channelled through to the
provinces, and that similar experiences at provincial level inform our support to the
central ministry

7.9 In the Education sector support will be provided to strengthen the directorates ability
to plan, manage and monitor its education programme. It is vital to encourage
collaboration and coordination of donors, agencies and NGO=s active in the education
sector throughout the province. It is intended to support and participate in the
development of ongoing monitoring systems. Finally, although support for construction
will fall in overall percentage terms, where support is provided it is intended to ensure
the proper functioning of facilities by supporting appropriate requirements such as
equipment, furniture and other materials.

7.10 Support to Rural Water and Sanitation programmes will continue in both Niassa
and Inhambane. Emphasis will be given to developing a coordinated approach to these
sectors with other actors and stakeholders and building the capacity of the local water
department to taking the leadership of the sector . However a study will be carried in the
middle of 2001 reviewing the support and to assess the opportunities to assist further
in this area.

7.11 Feeder Road development in Niassa will continue to be funded using the provincial
Office of Public works. In line with the recommendations of the viability study and the
approval of the Provincial Environment Department the rehabilitation of the Mavago to
Chiconono feeder road will be go ahead using labour based methods. This road will
link the two district of Mwembe and Mavago. An investigation into the merits of funding
rural roads in Inhambane will also be completed.

7.12 Demining in both Provinces will continue with support being provided to HALO
Trust in Niassa and UNADP in Inhambane. A three year phasing out plan for HALO
Trust will be supported and it is expected that by 2003 that only a small fire brigade type
service will be required. UNADP is in the process of transition to becoming a local NGO
but connections with the UN, particularly with regard to finance and accounting will
remain. At the end of this three year programme a further review will be carried out to
see if continued support to ADP is warranted. It is anticipated that a result of the
transition to local status will be channelling of funds locally and in addition, funds may
be channelled to the national institutional body responsible for coordination.

7.13 A budget line will be retained for the support of pilot projects at both provincial and
national level. The will provide the flexibility to react to opportunities that arise,
particularly in the productive sector, and to be proactive on issues that emerge over the
coming three years. This is particularly important in an economy in transition from
centralised control to a more market led situation.

Central Support:
Social Sectors:
7.14 The Education Sector Strategic Plan was developed following a long process
during which it was agreed that substantial and radical changes had to be introduced if
education was to achieve the social and economic goals of national development
strategies. The ESSP sets out the challenges and the goals for the sector for the
medium and long term. These relate to access, equity (gender and geographical)
quality and shortage of resources and inefficient use of available resources. Poor
health and nutrition levels, and the high adult illiteracy rates, particularly of women,
(74% of women in Mozambique are illiterate) contribute to the problems. The impact of
HIV/AIDS on the sector will be severe, especially affecting demand at primary school
level. It is estimated that the already acute need for trained primary level teachers will
be increased by 25% due to illness and death as a result of HIV.

7.15 The education sector policy and plan has as its goal to ensure that all children
have access to good quality primary schooling. Particular emphasis will be on reducing
the gender gap in basic education to directly reduce poverty. Improving levels of adult
literacy, especially of women is also a priority as is reducing regional disparities.

7.16 Future support will focus on strengthening the capacity of MINED at National and
Provincial levels to implement the ESSP. The overall objective will be to improve the
quality of learning and teaching in the classroom. Funding will be provided through
pooling funds in collaboration with other donors, particularly Sida, Netherlands, DFID
and World Bank for key components aimed at improving quality and building capacity;
teacher education and management training, revitalisation of ZIPs, provision of
textbooks and education materials.

7.17 Support will be provided to ensure that the MINED HIV/AIDS programme is
implemented as a matter of urgency and this issue together with gender is
mainstreamed in the sector plans at provincial and national levels. Similarly, support for
adult literacy will be targeted at the provincial as well as national levels. Through this
approach it is aimed to develop a synergy between the national level debate and the
practice and reality of provincial level activity. To ensure that this synergy is responded
to in the most appropriate manner, flexibility will be retained in relation to the most
effective funding mechanisms.

7.18 In view of its potential to contribute significantly to poverty reduction, support for

the development of public health services will continue to be a central focus of
Development Cooperation Ireland Programme in Mozambique. The GoM has
recognised the poverty reducing potential of investing in health development and has
indicated that improving access to quality health services will form a major component
of Poverty Reduction Plan 2000-2005. The Ministry of Health has agreed that it will
move towards a sector wide approach by: completing the Medium Term Expenditure
Framework on an annual basis; completing a Strategic Health Plan by the end of 2000;
transferring the management of existing pooling arrangements into the Ministry and
improving efforts to co-ordinate donor inputs.

7.18 In the next phase of the programme it is proposed that Development Cooperation
Ireland build upon the strategic focus agreed in the context of the 1998 review ( ie to
support health development activities at both central and provincial level). It is proposed
that Development Cooperation Ireland continue to assist the Planning Department of
MISAU in its efforts to complete the health policy framework. If requested by the central
government it is recommended that Development Cooperation Ireland provide funding
support for the development of the SWAp process and for the development of
appropriate support systems to assist it becoming operational. It is recommended that
Development Cooperation Ireland continue to co-operate closely with other donor
agencies and positively work to improve the quality of partnership between key
stakeholders. The Ministry of Health has recently developed a gender strategy and this
will be supported through assistance to mainstreaming gender in the strategic planning
and health sector reform process.

7.19 In addition, it is recommended that Development Cooperation Ireland continue to
direct budget support to the pharmaceutical sub-sector through existing pooling
mechanisms. Development Cooperation Ireland should advocate and support the
Ministry in its efforts to integrate this >pool= into the Ministry of Health budget. Serious
efforts have recently been made by the Ministry to strengthen the procurement,
management and the distribution of essential drugs. Because the Ministry is now
receiving some funds through GAVI (Global Alliance for Vaccines and Immunization) for
the purchase of vaccines, and because there is a need for further funds for the
purchase of essential drugs, it is recommended that future contributions to the
pharmaceutical >pool= are not tied to vaccine purchase.

7.20 In view of the enormous needs in the human resources sub-sector, it is
recommended that Development Cooperation Ireland, working in co-operation with
other agencies, explore how it can contribute to the
the development of human capital within the Ministry of Health. The impact of
HIV/AIDS on the health sector is of increasing concern. For example, in many health
units between 30-50 % of users have HIV related conditions, and a significant number
of health staff are already affected. This issue will therefore be taken into account in all
IA support to the health sector.

7.21 The planning of Development Cooperation Ireland support within the CSP
framework should, as a general principle, be negotiated on an annual basis, with the
Planning Department of the Ministry of Health and for the provincial level with the
Steering Committee of the Provincial Director of Health. These consultations will
provide the opportunity for agreeing the focus of planned ( earmarked and

unearmarked) contributions to the sectoral plans.

Productive Sectors/Infrastructure.
7.22 Requests that Development Cooperation Ireland consider increasing support to
economic activities and specifically to the private sector, was a recurring theme in
meetings with Government at Central and Provincial level. The tourism and fisheries
sectors were highlighted but no specific suggestions were made as to how they might
be supported. In response to these requests, Aincrease support to economic activities@
was adopted as one of the country programme=s strategic foci. The area of
infrastructural development and the development of a road network is essential to the
overall development of the productive sector in Mozambique. The issue of the impact
of HIV/AIDS will be analysed and mainstreamed in all IA assistance to the productive

7.23 Feedback regarding PROAGRI received at provincial and district level was
positive. Resources are flowing down from the centre and the PAOO=s are being
implemented. There is scope to improve participation by farmers in the formulation of
PAOO=s but this will take time. Support to PROAGRI will continue or be increased.
Although donors have committed themselves to funding the 5 year programme in full,
much of the promised funds are in the form of loans rather than grants. The level of
Ireland=s support to PROAGRI could be increased as the GOM would welcome the
possibility of replacing loan with grant funds. However, at this point in time, the planning
team wished to leave open the possibility of supporting some private sector agriculture-
related activities outside PROAGRI..

7.24 The National Roads Administration ( ANE) and the Road Fund are presently under
going instructional reform in development of the tertiary road or feeder road
programme. It is proposed in the new framework to decentralised the funding and
authority for these roads to provincial level. At the moment there is no national road
basket funding mechanism. In 2001 the programme will investigate the possibility of
working with other donors towards the development of a joint funding mechanism. A
study on the investment opportunities in the sector will be under taken in the middle of

7.25 AMODER: AMODER is an NGO which is providing rural banking services in four of
Inhambane=s Districts. With the support of other donors, particularly Sweden, it is also
operational in many other parts of Mozambique. Its purpose is to promote economic
development by facilitating the marketing of local products. It provides medium sized
loans to

$      the transport sector (purchase of small trucks)

$      small traders to finance the renovation of stores and for working capital;

$      fishermen for the purchase of necessary inputs;

$      small industries such as milling and carpentry.

AMODER proposes to expand its existing operations in Inhambane and has submitted
a proposal and business plan to Development Cooperation Ireland.

Participatory Democracy and Good Governance
Public Sector Reform and Capacity Building
 7.26 It is expected that a formal Public Service Reform Policy document addressing
the above areas will be formally launched by the President of the Republic in April of
2001. This is the most serious attempt to address the challenge of public service reform
in Mozambique since independence in 1975. It is very likely that the initiative will
produce a quite comprehensive reform programme which the GOM will ask its partners
to support. To this end, the budget in the Development Cooperation Ireland programme
for Public Service Reform and Capacity Building reflects the increasing importance of
our support to this area.

Democratisation and Human Rights
7.27 Future support will focus on :

a) Phase 11 of the UNDP/UNESCO media project, which also includes support for
local community radio in Mozambique.

b) continuation of support of initiatives to promote the human rights of prisoners in
Mozambique, improve their living conditions and provide vocational training for them

c) monitoring of the Ministry of Justice=s strategic planning exercise and the UNDP=s
strategic review of the justice sector for indications of other areas in this sector
requiring donor support. The forthcoming study on informal systems of justice in
Mozambique should also be monitored, as these may also benefit from donor support

d) continuation of support of initiatives aimed at strengthening the capacity of women in
Mozambique to claim their rights, and investigation of similar possibilities concerning
children=s rights and labour rights

e) further support to the UNDP Parliament project funded in 1997 will be coordinated
with other donors.

Budget Support:
7.28 Budget support will be provided to the GoM at a proposed level of 20% of the
programme budget. The budgetary support will be provided under the terms of the
ACommon Mechanism@ agreed between the GoM and a consortium of donors,
Denmark, European Community, Ireland, Netherlands, Norway, Sweden,
Switzerland, United Kingdom.

7.29 It is considered appropriate that Development Cooperation Ireland will provide
Budget Support at this time, as the quality of coordination and dialogue with

Government of Mozambique (GoM) and the donors is very high. The overall aim in
providing budget support is to contribute to and strengthen GoM=s poverty reduction
strategy by:-
S      Supporting the overall macroeconomic reform programme and contribute to
       higher economic growth;
S      Providing a financial basis for increased revenue allocations to priority
S      Strengthening the dialogue on improved public financial management and
       increased domestic revenue mobilisation;

7.30 GoM has since 1987 been making positive efforts to reform its economy away
from the previously state controlled system. Exchange rates and interest rates have
been liberalised; quantitative and other restrictions on trade have been lifted; and a
privatisation programme implemented. Careful monetary and fiscal policies have
contributed to relatively high growth rates and reduced inflation.

7.31 In macroeconomic terms, there are two main reasons for macro-financial
support:- the need to finance a large current account deficit in a situation where
access to foreign financial markets is very limited and which is likely to last for a
number of years yet; the second reason is the low available savings in the economy
which is insufficient to finance development expenditure particularly that needed for
continued rebuilding of national infrastructure.

7.32 Exports of goods from Mozambique are very low by international standards, but
are expected to increase from $230m in 1999 to over $500m in 2001, mainly based
on growing export revenue from the Mozal aluminium smelter. Imports would be
expected to show a decrease as the construction phase of the smelter is concluded.
 The required financing deficit is estimated to be between $500 - 600m per year.

7.33 In order to reduce transaction costs for GoM and to ensure consistency, donors
have agreed to a co-ordinated approach which will include:-
S      a common set of indicators for the medium term to review overall
       implementation of policy and institutional reforms within the framework of the
S      a common set of programme milestones/outputs focussing on financial
       management which are clearly defined, achievable and easily verifiable within
       an agreed timeframe;
S      a common procedure for disbursement;
S      common monitoring mechanism;

7.34 The donors have drawn up a AJoint donor programme for macrofinancial
support to the Government of Mozambique@ which contains nine articles:-
S     The overall goal of the programme;
S     Scope;
S     Dialogue;
S     Implementation and monitoring schedule;
S     Disbursement mechanism;
S     Reporting requirements;

S     Conditions for the transfer and utilisation of the funds;
S     Evaluation and review studies;
S     Auditing;

7.35 It is considered that the common procedures which have taken over two years
to develop are comprehensive and tight and will serve as an effective means of
ensuring productive dialogue with the GoM.

Technical Support and Management Issues.
7.36 Technical support and management structures which evolved since the
Embassy was established in1996, were entirely appropriate during the
programme=s development phase and have served Development Cooperation
Ireland well. The programme initially focussed on the two Provinces of Niassa and
Inhambane and only gradually developed a strong central element as PROAGRI,
Health and Education sector programmes emerged. The Embassy played an active
and constructive role in the development of all three sector programmes.

7.37 This Country Strategy Paper foresees a dramatic increase in the level of
support to Mozambique and significantly more resources being channelled through
Central rather than Provincial level. The Provincial programmes will remain of
strategic importance in directly addressing Development Cooperation Ireland=s
commitment to poverty reduction and partnership, in enabling us to play a role in
supporting implementation of government sector policy and programmes at a
decentralised level and in feeding back that experience into policy dialogue taking
place at central level.

7.38 It was agreed that the existing technical support and management
arrangements were no longer appropriate to this changed and enlarged programme
and that a fundamental review of staffing levels, competencies, roles and
responsibilities would be required. A review of the management structure and
requirement of the programme was carried out at the end of 2000. Implementation
of any changes awaits the final report.

7.39 It was also agreed that recruitment of a second Project Officer would proceed
following clarification of the role and preparation of an updated Job Description.

Programme Funding
7.39 The Mozambique programme has increased rapidly since it=s inception in
1996. Between 1998 and 2000 the programme has increased by 76%. The
proposed budgets for 2001 itself represents an increase of 110% on 2000 (
excluding the emergency assistance for the Floods)and the overall increase for the
period of the Country Strategy Paper is 3.5 fold increase.

7.40 While there will be modest increases to the provincial programmes in line with
capacity to absorb and sustain this investment, most of the increases in funding will
be channelled through the central level ministries and budgetary support.

7.41 PEAG documents will be developed for all new funding proposals. It is
proposed that support in each individual sector and area based programme will be

covered by one document per sector or ABP and these will be submitted for
approval to Dublin.

8. Conclusion
8.1 The 1st Country Strategy period 1997 to 2000 for Development Cooperation
Ireland programme in Mozambique has build a good foundation. The changing
nature of Irish development cooperation has given rise to new opportunities for
growth and partnership with the Government of Mozambique, while maintaining a
focus on poverty reduction and the provision of basic needs.

8.2 This Country Strategy Paper will act as a guideline and management tool for the
development of the Development Cooperation Ireland programme in Mozambique
for the period 2001 to 2003. Specific emphasis will be on building stronger
partnerships with the Government of Mozambique with support to the key basic
need priorities areas that they have identified in their own strategies and plans

Appendix 1

Indicative Budgets 2001 -2003
Programme Title                                           Projected             Expenditure

Sector/Activity                              2000*                      2001                  2002        2003

Social Sectors
Education                                1759726                    2,900,000          4000000         5000000
Health                                   1504997                    2,800,000          3300000         4300000
HIV                                                                   600,000         1,500,000        2000000

Productive Sectors
PROAGRI                                    950705                    1200000          2,000,000        2500000
AMODER                                      95425                     300,000           300,000         300000

Feeder Roads                               289609                     800000           1800000         2500000
Water                                      259743                    300,000            500000          800000

Cross-Cutting Issues
Capacity Building/PSR                      496057                     800000          1,500,000       2,000,000

Good Governance                            336430                    400,000            600,000        600,000
Demining                                   480215                    400,000            400,000        400,000
Community Dev't/DP's                       138617                    250,000            500,000        600,000

Macrofinancial Support
Budget Support                                                      3,000,000         4,500,000       6,000,000
Debt Alleviation                         1700000
Emergency                                2719613

Unallocated                                                          750,000           1000000         2000000

Support Costs                              887491                   1,000,000         1,100,000       1,200,000

Total                                   11592935                15,500,000           23,000,000      30,200,000
        * The figures for 2000 are the actual amounts spent.


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