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After independence, Mozambique relied on international solidarity and managed donor relations well. Donor dependency entailed loss of agency, allowing donors to challenge government capacity but never its authority. During the 2010s, donors expressed disappointment with reforms and challenged government legitimacy — not only due to developments in Mozambique. Donors are less enthusiastic about harmonised development cooperation and less concerned with aid effectiveness. Aid budgets are under pressure and development finance links more to other foreign policy concerns. Mozambique should expect increasing instrumentalisation of aid budgets. Institutions Mozambique developed to deal with donors are not well suited to present challenges. They focus on less relevant areas of the relationship with foreign countries, which often serve other agendas. Reforms could start with strengthening Mozambique’s Foreign Service as a genuine coordinator of foreign relations and the establishment of greater discipline around national plans and strategies. Institutionalising strong links between the foreign ministry and key economic ministries under the leadership of the prime minister could help.
This chapter provides a detailed account of the historical, political, and economic context of Mozambique. We draw attention to the big picture story and argue that the post-independence socio-economic performance and patterns of change cannot be understood without reference to the troubled history of the country. We identify fourteen core messages to keep in mind throughout the volume. They lead to selecting eight thematic areas for further study in Chapters 4 to 11.
This synthesis aims to put together the different threads pursued throughout this volume and presents our institutional diagnostic. We note as point of departure that Frelimo’s continuing inability to promote agriculture and broad-based private sector growth helps explain why the country lacks a consistent domestic engine of inclusive growth. We also return to the fork in the road. Remaining on the present path would lead to increasing inequality, further regional imbalances, and possibly armed conflict. The alternative is to use the expected gas revenues effectively for poverty reduction. Political power and authority continue to be almost exclusively vested in Frelimo. This stands out as a deep factor in our diagnostic. It takes visionary and brave leaders to take on the necessary reforms. to put the country back on a favourable trend. The uniting capabilities that Frelimo at least once possessed are exactly what is needed now. While one may argue that changes identified here are not necessary for Frelimo’s hold on power, the implications of increasing inequality, fragmentation, and conflict, serve as a strong warning sign and incentive to act in the national interest.
In this chapter we summarise results from studying existing institutional indicators, a quantitative survey of 149 respondents and more than 50 hours of interviews with key informants. Focus is on identifying a series of key institutional weaknesses for further analysis in subsequent chapters.
At independence in 1975, the Frelimo government took over public administration and started transforming it. The public financial management (PFM) system was adapted to central planning and management of the economy in line with nationalist and Marxist-Leninist thinking. While collapse followed in the mid-1980s, the PFM system was gradually and systematically reformed towards more transparent and efficient mechanisms, and successful reforms did coincide with high growth rates for more than 20 years, after 1993. As the nationalist agenda became more forceful from around 2005–10, when the natural gas reserves in the Rovuma Basin were confirmed, natural resources became the main focus as a source of revenue — severe cracks in the PFM system started to emerge. The ‘hidden debt’ scandal in 2013–14, renewed conflict between Frelimo and Renamo from 2013, and the insurgency war in Cabo Delgado from 2017 put the PFM system under pressure and performance suffered accordingly. The chapter demonstrates how difficult it is to make institutional reforms work, within a structure of political and economic power that may not benefit from them, even in a context of a high degree of aid dependence.