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Public Agricultural Investment Requirements and Decisions in Mozambique

January 25, 2013

mozambique

As the government of Mozambique embarks on its National Agriculture Investment Plan (or Programa Nacional de Investimento do Sector Agrário (PNISA)), one of the major challenges that the investment planning team faces is assessing the amount and types of investments that will be needed to bring about desired changes, particularly to achieve a 7 percent agricultural growth rate each year. A new IFPRI discussion paper, titled Public Expenditures in Agriculture in Mozambique, discusses the types and amount of public agricultural investments required in order for the country to achieve its own development goals as established in the context of the CAADP framework, as well as the factors that drive public investment decisions.

The report finds that agricultural growth in Mozambique can be attributed largely to the expansion of the amount of land used for agriculture, which will ultimately be unsustainable as there is a limited area of land that can be used for agricultural production. In order to sustain and increase growth, the authors suggest that total government spending on the agricultural sector would have to increase by 17-21 percent per year, with significant increases in the proportion of expenditures going to productivity-enhancing investments that generate higher efficiency in farming practices and input use (such as irrigation and information on best practices) and bring about technical change (such as research and development).

The allocation of public expenditures does not always align with the types of investments that can bring about substantial long-term desirable changes. For example, both donors and politicians often face incentives to invest in programs in which the outcomes can be observed in a short period of time and can be attributable to their efforts. Therefore, policymakers are unlikely to invest a significant amount of resources to programs that will have the greatest effect on productivity, such as research and development. However, as the country’s planning and budgeting process is formally embedded within the CAADP framework and processes, there is potential to change such behavior by bringing civil society and the media closer to the activities of policymakers while educating the public on Mozambique’s investment needs. The report suggests further research on the influence of CAADP on investments as Mozambique progresses through the CAADP process, as well as finding innovative ways to increase the political returns to such key productivity-enhancing investments.

To read the full report, click here

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