Management of public funds must be improved

Custódio Duma, Joaquim Dimbana
Social Watch Mozambique, Mozambican Human Rights League

Although there has been economic growth in Mozambique in the last 10 years, the population’s standard of living remains among the lowest in the world. The country continues to face enormous social, economic and regional gaps, and there are no clear inclusive and participatory public policies. Good governance is an essential requirement to provide the population with a minimum of basic social services and living conditions which can pave the way towards ensuring genuine social security.

Morethan 60% of the population still depends completely and exclusively onagriculture for survival. According to a recent Ministry of Agriculturereport (SETSAN, 2005), there are 520,000 people in the south of the country whoare facing a situation of extreme food insecurity and need immediate assistance.The number could rise to 660,000 if no help is forthcoming before October 2007.In the south, the production of cereals has fallen by around 30% and vegetablesby 12%. The southern and central regions are ravaged by cyclones, floods anddrought.

Meanwhile, the report Poverty and well-being in Mozambique (2004)reveals that rates of poverty in different regions of the country vary widely.The highest rates are in the central region (around 74%), and in the provincesof Sofala (87.9%), Tete (82.3%) and Inhambane (82.6%), but these areas are notvery densely populated and only 28.2% of the poor live in them. In contrast,39.3% of the nation’s poor live in the much more densely populated provincesof Nampula and Zambezia, but although poverty rates are higher in these tworegions the annual budget allocation they receive is less than the funds that goto other less impoverished provinces with smaller populations.

TABLE 1. Measures of the incidence and depth of poverty (using the basicbasket approach)


Incidence of poverty

Depth of poverty
























































Cabo Delgado
























































Maputo Province







City of Maputo







Source:Poverty and well-being in Mozambique (2004).

According to the report cited above, only 12% of rural dwellers have access torunning water and only 31% have an indoor latrine, whereas in urban areas thepercentages are 66% and 68% respectively. A mere 20% of the rural populationhave a health care centre or post in their village. This is probably the reasonwhy some 60% of childbirths in rural areas take place in the home, while in thecities the rate is 16%.

According to the Joint United Nations Programme on HIV/AIDS (UNAIDS), lifeexpectancy in Mozambique is just 41.9 years, among the lowest in Africa, and theHIV/AIDS pandemic is partly responsible for this situation.

Government plans to promote development

Official projections indicate that the country’s economy will grow by 7% in2007, and there will be one-digit inflation. Investment will be mainlyconcentrated on improving and harnessing infrastructure in the sectors ofenergy, communications and water supply in rural and peri-urban areas.

The current government has made the fight against poverty the main priorityin its five-year plan. This is seen as a precondition for human, economic andsocial development not only in the countryside but also in the cities. There arehuge differences between rural and urban areas and between the regions nearMaputo and those farthest away, and these gaps are a long way from beingrectified. The administrative unit in the country’s 11 provinces is thedistrict, and the idea is to use each district as a nucleus for nationaldevelopment. One of the most important elements in the five-year plan is theallocation of MZN 7 million (USD 274,000) to each of the 128 districts, to beused initially for public investment programmes.

In 2006, Social Watch Mozambique criticized this policy, alleging that thedistribution of funds did not follow coherent allocation criteria nor was itproportional to the potential or the needs of each district. The project was afailure in terms of management, implementation and monitoring, which led thegovernment to decide that the funds would be disbursed as credits ormicro-credits to finance initiatives from local development organizations andassociations. This connected state activity with the commercial bankers, inspite of the fact that it is a consultative committee run by the localadministration that decides which organizations to finance.

The Mozambique school network will be expanded in 2007. There are expected to be4.9 million pupils in the general education system (covering grades 1 through10), which represents a 12% increase over the 2006 figure, and there are plansto build 1,425 classrooms throughout the country. This amounts to significantprogress, but there are still serious problems as regards the distribution ofschool resources. The province of Zambezia, for example, has an enormouspopulation but receives the lowest education allocation from the nationalbudget.

There are also plans to build seven hospitals in rural areas, plus three healthcare centres and four medicine storage facilities, and to renovate another 17medical facilities (hospitals and health care centres). In 2007 work will beginon the construction of a general hospital in Matola, training centres in Mocímboada Praia in Cabo Delgado and Cuamba in Niassa, and the Infulene Institute ofHealth Sciences in Maputo. In addition, antiretroviral treatment will beextended to cover more than 96,000 people living with HIV/AIDS. It is estimatedthat around 1.8 million people in Mozambique are HIV-positive.

Foreign assistance

Overall government expenditure in 2007 is expected to be MZN 70.8 billion (USD2.77 billion), and around 54% of this will come from foreign sources.

The World Bank promised USD 70 million in 2007 to support the government’sprogramme to combat extreme poverty with the Social Economic Plan, and this sumcame into the country’s general state budget in the form of a credit. Thegovernment made a commitment to use these funds to reduce poverty levels andpromote rapid economic growth that would be sustainable and inclusive, but itdid not give any concrete data about the plan. The USD 70 million was to behanded over in two payments, one in each six-month period. A World Bankrepresentative said that the poverty reduction assistance programme included anew series of credits whose main objective was to support the implementation ofthe Action Plan to Reduce Absolute Poverty 2006-2009 (PARPA II). This willinclude three annual operations to be implemented between 2007 and 2009. Theprogramme began in 2004, and the country received the sum of USD 60 million inthat year.

In July 2007, the United States awarded Mozambique a five-year grant totallingUSD 506.9 million, to be invested in reducing poverty rates in the country. Thegovernment has decided to invest these funds in the provinces in the northernregion.

In Mozambique the financial sector is very weak because of high levels ofcorruption, a lack of transparency and access to information, fraud in thebanking system, and the fact that the legal apparatus does not have theindependence to tackle financial wrongdoing.

Failures in governance erode the people’s trust

Poverty in the country is generally defined as serious deficiencies in the areasof nutrition, health, schooling, access to potable water, and a safe and healthyliving environment, which are all critically important for individualwell-being. Therefore, poverty is seen as an evil that must be attacked byimplementing public policies geared to individual and social well-being.

This definition of poverty suggests that the government should implement publicpolicies that are not just designed to improve the country’s economicdevelopment indicators but are aimed at improving people’s lives. Every daythere are reports that large numbers of people are dying for lack of medicalattention or medicines, and in the district of Chibabava in Sofala provincethere are many who have nothing but wild fruit to live on. The government wentso far as to finance the purchase of donkeys at some administrative posts in thenorth of the country to help move sick people, and at the hospital in the cityof Nampula there is a three-month waiting list for medical consultations.

Citizens’ participation versus bureaucracy and centralization

Under pressure from donors, the government of Mozambique set up a mechanismknown as the ‘joint review’ whereby each year the government itself, thedonors and representatives from civil society review current economic and socialplans by examining the balance of what has been achieved. This mechanism shouldbe transparent and honest, but it is becoming more and more complicated andcentralized because the flow of information is rather slow and the data that issupposed to be discussed, compared and monitored by those taking part is notreceived in good time.

In the joint review this year it was suggested that the problem was not that thegovernment lacked the resources to improve the lives of the people, but that itlacked suitable public policies and the political will and ability to managepublic funds. For example, in 2006 the Ministry of Justice received a mere USD100,000 to reform the prison system, while a permanent secretary in the provinceof Sofala spent around USD 325,000 from the public treasury to buy and renovatea house for himself. This fact is on the record, documented in the accounts ofthe Administrative Tribunal.

It is this kind of mismanagement of public funds and poor rationalization ofresources, plus the fact that state agents accused of corruption andappropriating public funds for their own ends are not brought to trial, thatconstitute the main obstacle to reducing poverty in Mozambique.

The wrong choices

In 2007 the government announced that it was giving priority to the ‘greenrevolution’, a programme whereby subsistence-level peasant farmers would betransformed into traders. However, this scheme overlooked the fact thatagricultural techniques in the country are rudimentary and there is no incentiveto modernize them. Something similar happened last year, when the governmentpromoted the cultivation of jatropha to produce biofuel as an alternative topetrol, which was becoming more and more expensive. Vast areas of land wereallocated to this crop, but today its future is unclear because there was nodefined policy as to how this product was to be produced and exploited, andalready people are talking about the negative and polluting effects this plantcan have.

Mozambique is a member of the Southern African Development Community (SADC), andstarting in 2008 various consumer products will be exempt from 20% of customsduties under the trade protocol in this regional agreement. Business leaders inthe country are predicting disastrous results from this tariff change becausethey are not in a situation to compete with a strong economy like that ofneighbouring South Africa.

Citizenship without security

The people of Mozambique are further and further away from being able toexercise their economic rights or enjoy the benefits of economic justice. It hasbeen calculated that half the population is not officially registered, whichmeans that these individuals cannot prove that they are citizens for anyofficial purposes. One of the main reasons why enrolment rates in schools are solow is that many children are unregistered and do not have any kind of personaldocumentation or identity card.

Crime rates are increasing, mainly in the big urban areas, and according to thenewspaper Jornal Domingo more than athousand people were murdered last year alone. In 2006, a study by theMozambique Human Rights League found that 69% of the young people involved incrime and prostitution in the cities of Beira and Maputo had resorted to theseactivities for lack of work, food or housing. This suggests that good healthcare and education have a direct impact on well-being, because they improvequality of life and the ability to participate in society, just as good healthand education increase an individual’s ability to be economically productive.

The current government is increasingly losing credibility and the people’strust because it has failed to put a stop to rising crime, and nor can it bringcorruption under control or punish the guilty. Public policies are not bringingabout any improvement in the quality of life of the population; some people aretaking the law into their own hands and lynching suspected criminals, whileothers are turning to violence to satisfy their basic needs. Essentially, theMozambican people do not feel they are involved in any kind of human developmentprocess.


National Directorate of Planningand Budget, Ministry of Planning and Finance, Economic Research Bureau, Ministryof Planning and Finance, International Food Policy Research Institute PurdueUniversity (2004). Povertyand well-being in Mozambique: the second national assessment. [online]<>.

SETSAN (Technical Secretariat for Food Security and Nutrition) (2005).Monitoring report on food and nutritional security in Mozambique. Maputo:SETSAN, Ministry of Agriculture and Fisheries.