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Africa
Mozambique
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Mozambique

The Development Challenge: Eleven years after the end of a devastating post-colonial civil war, Mozambique continues on a positive development track. Mozambique's overall macroeconomic performance for calendar year 2003 remained strong. Real gross domestic product (GDP) growth is estimated at a healthy 7%, following on the 10% growth achieved in 2002. Inflation was held to 10.8% during 2003, down from 17% in 2002. The country continues to advance reforms that facilitate private sector-led, poverty-reducing growth. Mozambican non-governmental organizations (NGOs) are building public support for the fight against corruption as the government of the Republic of Mozambique (GRM) develops its capacity to be responsive and actually reduce corruption. Health statistics reveal that the GRM's close partnerships with donors, international private voluntary organizations (PVOs), and domestic NGOs are improving the health status of women and children--and this work is done increasingly by Mozambicans themselves.

Strategic Objectives
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These achievements notwithstanding, the country continues to face several development challenges including the need to: maintain high economic growth rates; further reduce widespread poverty; reduce the high incidence of HIV/AIDS; enhance gender equality in political as well as economic life; strengthen democracy and political stability; reduce unemployment levels; and reduce vulnerability to natural calamities. Close to 70% of the population lives at or below the absolute poverty level. Sixty percent of adults are illiterate. Despite increased vaccination rates and improved access to basic health services, life expectancy remains low at 40.2 years for women and 38.4 for men, and continues to fall due to HIV/AIDS. Even if Mozambique can successfully reduce the incidence of HIV/AIDS in the medium-term, the present prevalence rate of 13.6% will eventually translate into large multi-generational costs for the economy and society.

Mozambique's ports provide access to global markets for several landlocked neighboring countries. Its proximity to the industrial heartland of South Africa underscores the fact that its political stability and economic growth contribute to the U.S. national interests of peace, stability, and economic growth throughout Southern Africa. As a rapidly growing economy, Mozambique is increasingly a potential market for U.S. exports and U.S. investment in, among others, agriculture, fisheries, and minerals.

The USAID Program: The data sheets that follow cover the five strategic objectives of the new Country Strategic Plan that USAID will implement with FY 2004 and FY 2005 funds. These five objectives will foster sustained, poverty-reducing economic growth that reaches average Mozambicans through agricultural development and increased international trade; stem the spread and impact of HIV/AIDS; improve maternal and child health; and establish models of good governance among municipalities while attacking corruption where it most affects average citizens. FY 2004 funds will be used to implement new and ongoing programs designed to sustain rural income growth in target areas, increase labor-intensive exports, increase the use of quality child survival and reproductive health services, reduce the transmission of HIV while also mitigating the impact of the AIDS epidemic, and make municipal governance more democratic.

Mozambique is a focus country under the President's Emergency Plan for AIDS Relief (PEPFAR). All proposed HIV/AIDS activities are being integrated into PEPFAR and are subject to the approval of the U.S. Global AIDS Coordinator. Additional funding from the Global HIV/AIDS Initiative account is anticipated for both FY 2004 and FY 2005. As a leading donor in the fight against HIV/AIDS in Mozambique, USAID will contribute to FY 2004 and FY 2005 PEPFAR objectives by promoting abstinence and behavior change for youth, preventing mother-to-child transmission, supporting orphans and vulnerable children, and providing antiretroviral treatment and related care.

The USAID Development Assistance Program grants (DAPs), which integrate Development Assistance (DA) with P.L. 480 Title II resources, seek to improve food security and nutrition of rural households by increasing agricultural production and marketing as well as improving nutrition and health behavior. A 2002 review of the determinants of malnutrition in Mozambique suggests that improvements in food security, while necessary, are not sufficient to guarantee improvements in nutrition. The review noted that health and sanitation, caring practices by the mother, and the mother's own nutritional status and educational background are key determinants of the nutritional status of children in Mozambique. The DAPs also help to increase cash income through sales of agricultural produce and other income-generating activities. The DAPs place a strong emphasis on nutritional behavior change where the mothers of well-nourished children serve as volunteers in the community to teach their peers how to nurture their children. This is a sustainable effort with increasing impact, as the network of mothers with well-nourished children grows.

USAID has strong collaboration with Mozambican partners in each of the target strategic sectors, with more emerging as the country develops. These partners range from GRM counterparts to leading members of the domestic and international for-profit and non-profit sectors. USAID will continue to rely on Mozambican partners for leadership, guidance, and support.

Other Program Elements: USAID's Economic Growth, Agriculture and Trade Bureau provides central funding for activities in Mozambique as part of the Conservation of Resources in African Landscape (CORAL) program. CORAL improves the sustainable use of agricultural land and increases the protection of natural resources (principally forests) and biodiversity, including both freshwater and coastal ecosystems. Ecotourism development is a key enterprise activity under CORAL, and is being considered as a focus area under the new country strategy.

USAID's Global Health Bureau, which, in collaboration with other USG agencies implements HIV/AIDS activities to help achieve the PEPFAR targets, funds HIV/AIDS activities in Mozambique through centrally-funded grants. Medical Service Corporation International will begin prevention and treatment programs through community and faith-based organizations in FY 2004. The International HIV/AIDS Alliance has also begun work in central Mozambique on community-based prevention and care initiatives. In addition, CARE has begun providing small-scale grants for community-based HIV/AIDS prevention, care, and support initiatives. Mozambique is also part of the Anti-Corruption Initiative (ACI) and through its municipal governance program will work to increase opportunities to reduce corruption in government and public service delivery institutions.

Other Donors: Donor coordination is excellent. In October 2003, the World Bank convened the 14th Consultative Group on Mozambique. The meeting focused on progress made during the past two years in implementing the GRM's Action Plan for the Reduction of Absolute Poverty ("PARPA" in Portuguese). Delegates agreed that the key challenges confronting Mozambique are to encourage private sector-led growth and to extend the benefits of that growth to all Mozambicans, particularly the poor. Delegates recognized the need to broaden participation among Mozambicans in the formulation and monitoring of PARPA priorities and to better integrate these activities into the GRM's legislative and budgetary processes. In this context, the GRM established a "poverty observatory" to evaluate and monitor the implementation of its current PARPA. Donor support is increasingly harmonized through broad agreement on Mozambique's Performance Assessment Framework (PAF), which includes a common set of key monitoring indicators. Based on the positive results that the GRM has achieved in implementing its poverty reduction strategy over the past three years, donors reaffirmed their ongoing commitments by pledging approximately $790 million in external assistance for 2004, exceeding the GRM's requested level of $680 million.

The United States is one of the largest bilateral donors, with plans to provide over $60 million in grants and monetized food aid in FY 2004. Other major donors include the World Bank, the International Monetary Fund, the United Nations Development Program, the European Union, the United Kingdom, Japan, the Netherlands, Sweden, Denmark, Switzerland, Italy, France, and Norway. Portugal, South Africa, and the United Kingdom are major sources of private investment in Mozambique. Donor coordination working groups are active in all of USAID's strategic areas.

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Fri, 14 Jan 2005 14:25:17 -0500
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