Policy paper

UK–Mozambique development partnership summary, July 2023

Published 17 July 2023

Introduction

The Strategy for International Development (IDS) places development at the heart of the UK’s foreign policy. It sets out a new approach to development, anchored in patient, long-term partnerships tailored to the needs of the countries we work with, built on mutual accountability and transparency. This approach goes beyond aid and brings the combined power of the UK’s global economic, scientific, security and diplomatic strengths to our development partnerships. Our 4 priorities are to deliver honest, reliable investment, provide women and girls with the freedom they need to succeed, step up our life-saving humanitarian work, and take forward our work on climate change, nature and global health. The Integrated Review Refresh (IR23) reiterates that sustainable development is central to UK foreign policy and sets out how the UK will go further and faster on development to reduce poverty and reinvigorate progress towards the SDGs. This Country Development Partnership Summary details how the IDS and IR23 will be put into practice with Mozambique.

Country context

Following the end of a long and brutal civil war in 1992, Mozambique achieved 2 decades of high economic growth and positive human development progress, consolidated its peace process, and held consecutive peaceful elections. The potential of Mozambique’s extractive industries also became apparent with significant reserves of offshore gas discovered, in addition to considerable coal and other mineral resources (including rubies and graphite).

Recent history has been characterised by internal and external shocks. A combination of conflict in Cabo Delgado province, devastating cyclones, COVID-19 and internal governance challenges (epitomised in the hidden loan scandal in 2016) have significantly slowed progress. High levels of debt and limited fiscal space constrain investment in public services and infrastructure.

As a result, Mozambique is currently sixth bottom on the UN’s Human Development Index with 68% of the population living in extreme poverty^{[footnote 1]}. It remains one of the most climate vulnerable countries in the world and its rapid population growth (the third highest in Africa, with 53% of the population under 17) is placing growing strain on public services. Gender equality is enshrined in the constitution, supported by a positive legislative framework, and Mozambique has reached the goal of 50% female Ministerial representation. Yet half of girls drop out of school by the 5th Grade, and only 14% of adult women achieve secondary education (compared to 20% of men).  A key driver is high child marriage rates with 53% of all girls married by age 18, and adolescent pregnancy 4 times higher than the global average. In the north of the country there remains a humanitarian crisis with almost one million people displaced.

Despite these challenges, Mozambique has made significant development gains in some areas. Intensive malaria control efforts have helped to reduce malaria deaths by more than 50% since 2002, while, over the last decade, new HIV cases have fallen by 34% and AIDS-related deaths by 27%. Around one-third of the population now have access to electricity, compared to just 4% in 1998. Since 2000, primary school enrolment has increased, reaching near universal levels. The UK – a fellow Commonwealth member and one of Mozambique’s largest development partners of the last 20 years – has helped support these and other positive changes. In the last few years alone, the UK has supported over 1.5 million Mozambicans get improved access to water and over 1.3 million Mozambicans gain access to off-grid renewable energy.

We must build on these successes, supporting Mozambique to navigate 2023 to 2024 elections peacefully. Alongside significant unrealised potential in renewables, agriculture and tourism, Mozambique could become the fourth largest gas exporter in the world. This opens up the possibility of significant development gains over coming decades. A strong and mutually beneficial long term UK-Mozambique partnership can unlock these and build widely shared prosperity. To do so, we must collectively address the conflict in the north and its underlying drivers; and ensure gas revenues are used to deliver sustainable and inclusive growth, create jobs, reduce poverty and strengthen human capital.

Why and how: the UK’s development offer with Mozambique

Our vision is for a strong UK-Mozambique partnership that leads to a more secure, resilient, sustainable, and prosperous future for all. To achieve this, we will help to reduce poverty in Mozambique through a focus on 5 key areas:

1. Peace and Stability: Preventing humanitarian suffering and promoting long-term peace and stability in Mozambique & supporting Mozambique’s peace and security role in the region and globally.

2. Improving Service Delivery: Strengthening Government of Mozambique systems, governance, and efficiency for effective and equitable service delivery, particularly in the poorest regions and in areas of instability.

3. Sustainable and Inclusive Prosperity:  Strengthening the conditions for green and inclusive growth that delivers more equitable outcomes for women, builds climate resilience, and supports mutual prosperity.

4. Strengthening Climate Resilience: Improving management and response to climate and other shocks and stresses, promoting nature-based solutions and sustainable livelihoods.

5. Strengthening Inclusive Governance and Democracy: Promoting good governance for improved service delivery, deepening democracy, and preventing conflict.

In doing so, the UK will draw on the full range of its resources including UK technical expertise, bilateral and central development programming, strong advisory capability in-country, convening power, leveraging international finance, and by influencing the wider multilateral system. We will work collaboratively across UK government departments and agencies, including the Foreign, Commonwealth and Development Office (FCDO), with the Department for Business and Trade on economic partnerships and the Ministry of Defence and National Crime Agency on peace and security goals. In addition, we will work closely with the growing UK private sector presence in Mozambique and harness the power of British Investment Partnerships (BIP). BIP is the UK’s primary vehicle through which we will support resilient infrastructure development and the green transition, including through the UK’s development finance institution, British International Investment (BII). Mozambique is a priority country under BIP and that enables access to BIP’s Centres of Expertise through which the UK will mobilise technical assistance and advice.

We will also build on our impact to date. This includes:

• UK technical assistance on tax and public financial management that helped support conditions for the International Monetary Fund (IMF) and World Bank to restart budget support in 2022, unlocking over $750 million of finance for Mozambique
• supporting the Government of Mozambique (GoM) to expand social safety-nets in the province of Cabo Delgado, heavily affected by insecurity and a humanitarian crisis
• through a 70% UK shareholding in independent power producer, Globeleq, supporting a major expansion in Mozambique’s energy generation capacity which, once operational, will provide electricity to over one million customers.
• raising £500 million of UK private sector led investment in agriculture, infrastructure, and energy sectors
• championing results-based finance and devolved delivery in water and sanitation which has now become the norm for government infrastructure operations in this area
• providing life-saving humanitarian response to cyclones, including providing shelter to over 30,000 people suffering from the impacts of Cyclone Freddy in 2023

Who we work with

Our primary partner is the Mozambican Government, with whom we have built a strong peace and security, economic, humanitarian and development partnership.

The UK also works with a wide range of local, national, and international partners, such as other governments, UN agencies, Civil Society Organisations, and the private sector, including UK businesses. UK companies are some of the biggest taxpayers and employers in Mozambique, supporting over 400,000 Mozambican farmers in the agro-industrial sector alone. The World Bank, IMF and African Development Bank – all of whom receive significant UK funding centrally – have major programmes in Mozambique and we collaborate closely on macro-economic issues and reform. With the World Bank, we work closely on health (including preventable deaths), education, social protection, and climate. The global health funds have significant investments in Mozambique, including the 2nd highest allocation globally for HIV, TB and Malaria for 2024 to 2026 (over $770 million) for which we have dedicated technical support in-country to support its effectiveness.

The UK coordinates closely with other development partners through the Development Partner Coordination platform and co-chairs several sector and thematic groups. We also work closely with the private sector through the UK-convened Strategic Business Group.

Key programmes

The UK supports a range of transformative human development programmes that focus on health and girls’ education, social protection and water and sanitation. These are focused on strengthening transparent, and accountable systems that help government spend its money more effectively, improving and speeding up delivery, and innovating and testing new approaches.

These include:

1. Transforming Access to WASH & Nutrition Services in Mozambique (TWASH2): (£40 million over 5 years). T-WASH II provides climate resilient water and sanitation (WASH) infrastructure and promotes basic hygiene and health practices which improve sanitation, nutrition and help prevent diseases.

2. Support to Social Protection Programme 2 (SSPP2) (£30 million over 5 years). SSPP2 supports Mozambique to develop and run a more comprehensive and sustainable social protection system reaching the most vulnerable population. During COVID-19, the UK helped support 1.4 million people in vulnerable households to receive additional cash transfers.

3. Mozambique Demographic Transition (Waala) (£34 million over 9 years). The programme promotes cost-effective interventions that address the drivers of demographic transition, such as high child and maternal mortality and increased access to voluntary family planning and girls’ education.

In addition, the UK has bilateral programmes focused on tax & economic governance, peace and stability and humanitarian responses to the conflict in the North and initiatives on both transparency and accountability and on supporting climate resilient agricultural investments. On energy, the UK is working with Mozambique to promote investment in the sector and improve access to clean, affordable energy. For example, UK partnerships with off-grid renewable companies through the ‘BRILHO’ programme, have improved access for over 1.3 million people and raised over £24.5 million of additional private funding, generating 2,400 direct jobs.

In addition to our bilateral programmes, we have prioritised engagement with centrally managed and regional programmes, to ensure they effectively contribute to our development strategy. For example, as a British Investment Partnership (BIP) priority country, we work closely with investment vehicles such as BII and UK Export Finance to help secure greater private sector investment and improve access to finance. Regional programming and advisory expertise on trade facilitation will closely align with our bilateral work. We also draw heavily on central programmes for research, evidence, and innovation, including through the International Growth Centre (IGC), which brings world-class academic expertise to support the Government of Mozambique to build evidence to inform policy decisions. The UK’s Blue Planet Fund is also establishing in Mozambique to support marine protection and increase the climate resilience and prosperity of vulnerable coastal communities.

The UK has robust structures in place to monitor the effectiveness of its development work, through regular reviews and evaluations.

Financial information

Initial allocations have been set internally to deliver the priorities set out in the International Development Strategy (May 2022) and the Integrated Review Refresh 2023, based on the FCDO’s Spending Review 2021 settlement.

The department’s spending plans for the period 2022 to 2023 to 2024 to 2025 have been revisited to ensure HM Government continues to spend around 0.5% of Gross National Income (GNI) on ODA. This was in the context of the significant and unexpected costs incurred to support the people of Ukraine and Afghanistan escape oppression and conflict and find refuge in the UK, and others seeking asylum. The Government provided additional resources of £1 billion in 2022 to 2023 and £1.5 billion in 2023 to 2024 to help meet these unanticipated costs. The Government remains committed to returning ODA spending to 0.7% of GNI when the fiscal situation allows, in line with the approach confirmed by the House of Commons in July 2021.

The country development partnership summaries include the breakdown of programme budgets allocated to individual countries for 2023 to 2024 and 2024 to 2025. These allocations are indicative and subject to revision as, by its nature, the department’s work is dynamic. Programme allocations are continually reviewed to respond to changing global needs, including humanitarian crises, fluctuations in GNI and other ODA allocation decisions.

It should be noted that these figures do not reflect the full range of UK ODA spending in these individual countries as they do not include spend delivered via core contributions to multilateral organisations, or regional programmes delivered by the FCDO’s central departments. Other UK Government departments also spend a large amount of ODA overseas. Details of ODA spent by other UK government departments can be found in their Annual Report and Accounts and the Statistics for International Development.

Expected FCDO sector spend (International Development Strategy sectors): 2023 to 2024

Figure 1. Financial year 2023 to 2024 Mozambique Allocated Funds by Sector: Women and Girls, 26%; Global Health, 23%; Humanitarian Preparedness and Response, 22%; Climate and Nature, 15%; Other, 14%.

90% is marked as being principally or significantly focused on promoting gender equality and 10% is marked as being principally or significantly focused on disability inclusion.

FCDO ODA allocation

British High Commission Maputo’s expected ODA budgets for financial year 2023 to 2024 and financial year 2024 to 2025 are shown below.

Allocated ODA budget financial year 2023 to 2024: £20,076,000.

Indicative ODA budget financial year 2024 to 2025: £47,000,000.

Supporting information sources

• British High Commission Maputo
• DevTracker
• D-portal
• FCDO Evaluation Repository

1. Country Insights Human Development Reports ↩