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Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).

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MOZAMBIQUE

	FY 1997	FY 1998	FY 1999
	Actual	Estimate	Request
Child Survival and Disease..........	$10,832,500	$ 10,596,000	$9,920,000
Development Assistance..............	$21,100,000	$27,800,000	$31,300,000
Economic Support Funds.............	$500,000	---	---
P.L. 480 Title II...........................	$21,181,000	$23,854,800	$18,779,955
P.L. 480 Title III..........................	$4,000,000	$5,000,000	$6,000,000

Introduction

Given Mozambique's importance in providing ocean access for several landlocked countries and its proximity to the Republic of South Africa, political stability and economic growth in Mozambique contribute to U.S. national interests of peace, stability, and economic growth throughout the entire southern Africa region. Mozambique is also a growing market for U.S. exports. In addition, Mozambique continues to attract U.S. investment in its vast agricultural land, valuable fisheries resources, and significant mineral and natural gas reserves.

Mozambique is a major success story of war-to-peace transition in sub-Saharan Africa. USAID's support has been vital to this process, which began with the signing of the Peace Accords in October 1992, and has encompassed the demobilization of opposing armies, resettlement of almost five million displaced persons and refugees, successful democratic elections, and the installation of a new government that has managed a stellar economic revival. Mozambique's transition from war to peace, and from crisis to sustainable growth is nearly complete.

The economy grew at 6.6% in 1997, with substantial increases in agricultural production. A streamlined investment code is expected to facilitate project commitments worth $6 billion in foreign investment. Land tenure reform is critical to economic progress and began in 1997 with new legislation that promotes equitable land tenure security. The government's decentralization program will take an important step forward in 1998 with the first local government elections. The government restructured its budget to direct major increases to education and health, investments critical for sustainable growth. In 1997, government revenues increased by 21%, reducing Mozambique's budgetary dependency on external resources. Finally, Mozambique's eligibility for Highly-Indebted Poor Countries debt forgiveness currently scheduled for FY 1999 will help to reduce its annual debt burden and will reinforce positive perceptions of this African success story.

The Development Challenge

In spite of the successful transition, Mozambique still has a long road to travel to eradicate poverty, eliminate malnutrition, reduce mortality and increase incomes. Eighty percent of the population lives in rural areas, two-thirds in absolute poverty. Rain-fed subsistence agriculture leaves the rural poor particularly vulnerable to recurring drought and natural disasters. The average daily caloric intake in Mozambique is just 77% of daily requirements. Chronic malnutrition is estimated to affect 30% to 40% of Mozambique's children. Slash-and-burn agriculture and indiscriminate logging are leading to erosion and soil loss, sedimentation of waterways, and destruction of the marine ecosystem.

The population growth rate of 2.7% per annum erodes improvements in the standard of living. One-third of all rural health clinics were lost during the war, and 70% of the population lives without health services. Fifty percent of child deaths in Mozambique are the result of common treatable diseases, and HIV infection is estimated to be 8% to 10% of the adult population. Illiteracy rates are 25% higher than the average for sub-Saharan Africa.

A prerequisite for both rapid economic growth and democratization is good policies, and USAID has been influential in supporting Mozambique's reform agenda. The Government of Mozambique (GRM) has carried out ambitious financial sector reforms and promoted privatization and decentralization. All of the commercial banks and over 780 other entities have been privatized and the customs services are now under private management. As a result, the economy has grown at an average rate of over 6% annually for the past five years, the currency achieved stability in 1996, and inflation was cut to 4.5% in 1997. Continued economic growth is still vulnerable to Mozambique's debt problems, and revenue increases are still insufficient to make many needed development investments.

Mozambique's transition to democracy is still fragile. The executive branch's sensitive relationship with an increasingly strong National Assembly will require patience and continued political commitment. Following the 1998 local elections, newly-constituted municipal governments will be extremely weak. Regulations to support new laws in the areas of the land, business, and environmental management are required to support the pace and sustainability of economic growth.

Other Donors

The United States is the largest bilateral donor in Mozambique and in FY 1997 provided over $51 million in grants and food aid. In 1997, the donor community at large pledged about $790 million for development assistance. Major contributors are: the World Bank, the International Monetary Fund, the United Nations agencies, the European Union, the Netherlands, Sweden, Denmark, Switzerland, Italy, France and Norway. Portugal and South Africa maintain a major investment position in Mozambique.

FY 1999 Program

In FY 1999, the USAID program will continue to focus on Mozambique's central provinces, which were the most affected by war, contain 50% of the country's population, and boast the greatest agricultural potential. Increasing rural incomes will reduce absolute poverty and improve nutritional status. Income growth will stimulate on-farm investment and expand rural enterprises. Mozambique will participate in the Africa Food Security Initiative through rehabilitation of farm-to-market roads, expansion of producer business associations, and increased capacity of the Ministry of Agriculture to promote sound sector policies. In FY 1999, USAID will also support an agriculture sector investment program in conjunction with the GRM and other donors to enhance effectiveness of limited public sector activities.

Democracy and good governance, which requires and promotes informed participation, accountability, and respect for human rights are inextricably linked to sustainable development. USAID will also support Mozambique's second national elections -- a critical juncture for this young democracy. The program will support capacity building of the National Assembly, civil society groups, more effective judicial processes including alternative dispute resolution, and new municipal governments.

Primary health care is critical to enhancing human productivity, participation in an open economy, and improved family well-being. In FY 1999, USAID will increase focus on building local capacity in public and non-governmental institutions to ensure sustainable provision and access for basic health services, especially those related to child survival, malaria and polio. The program to combat HIV/AIDS will continue throughout the country.

In FY 1999, USAID will initiate a new strategic objective, increased use of sustainable natural resource management practices, to assist Mozambique to address growing environmental pressures related to economic growth. Activities will support increased capacity to assess environmental impacts, build sustainable environmental enterprises, and expand knowledge of sound environmental practices.

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MOZAMBIQUE
FY 1999 PROGRAM SUMMARY
(in Thousands of Dollars)

USAID Strategic Objectives	Economic Growth & Agriculture	Population & Health	Environment	Democracy	Human Capacity Development	Humanitarian Assistance	TOTALS
S.O.1 Increased Rural Household Income in Targeted Areas - DA - P.L. 480/II - P.L. 480/III	15,000 --- ---	--- --- ---	4,300 --- ---	--- --- ---	--- --- ---	--- 15,980 6,000	19,300 15,980 6,000
S.O. 2 Government and Civil Society are Effective Partners in Democratic Governance - DA	---	---	---	2,700	---	---	2,700
S.O. 3 Essential Maternal/Child Health and Family Planning Services - CSD - DA - P.L. 480/II	--- --- ---	9,920 6,300 ---	--- --- ---	--- --- ---	--- --- ---	--- --- 2,800	9,920 6,300 2,800
S.O. 4 Increased Sustainable Natural Resource Management - DA	---	---	3,000	---	---	---	3,000
Totals - CSD - DA - P.L. 480/II - P.L. 480/III	--- 15,000 --- ---	9,920 6,300 --- ---	--- 7,300 --- ---	--- 2,700 --- ---	--- --- --- ---	--- --- 18,780 6,000	9,920 31,300 18,780 6,000

Mission Director: Cynthia F. Rozell

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ACTIVITY DATA SHEET

PROGRAM: MOZAMBIQUE
TITLE AND NUMBER: Rural Household Income Increased in Targeted Areas, 656-S001
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999 : DA: $19,300,000; P.L. 480 Title II $15,980,000; >P.L. 480 Title III $6,000,000
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To increase household income of the rural poor in targeted areas by increasing access to markets, expanding rural enterprises and increasing sustainable agricultural output.

USAID Role and Achievements to Date: This activity focuses on increasing the capacity of rural households to increase incomes and enhance their food security. After 16 years of civil war, the resurgence of agricultural production is proceeding ahead of expectations. In the past two years, the country has increased coarse grain production from 72% to nearly 100% of requirements. The production of other important food crops such as cassava, beans, and peanuts has increased for a third year in a row. USAID's programs have significantly increased economic activities. Production of cashews, the principal small-holder cash crop, increased from 22,000 tons in 1995 to 40,000 tons in 1996, already exceeding USAID targets. USAID assistance in developing farmer associations has led to an increased ability to operate profitably. Informal and formal traders of food crops have effectively supplied urban centers with basic commodities at reasonable prices, while at the same time offering remunerative prices to producers.

In the first year of a multi-donor roads project, USAID financed the rehabilitation of over 200 kilometers of rural feeder roads to help move products from farm to market. Microenterprise activities also have grown throughout the country, and provide supplementary cash for basic household needs. Modest improvements in peoples' lives from increased agricultural production can be credited to the Mozambican government's commitment to improving the macroeconomic policy environment and implementing sectoral reforms, such as liberalizing the pricing and marketing of agricultural commodities. Eight U.S. private voluntary organizations (PVOs) carried out programs in 1997 to improve access to inputs and techniques for sustainable agricultural production, as well as to provide technical and organizational expertise in promoting marketing, microenterprises and microfinance.

Description: Mozambique depends upon smallholder agriculture to make a major contribution to economic growth. USAID baseline survey results show that in 1996 annual per capita income in areas where USAID is concentrating its efforts was only $50 per capita. USAID resources promote improvements in the policy framework, labor-intensive rehabilitation of farm-to-market roads, the adoption of sustainable farming practices, and the creation and growth of microenterprises. This approach is producing significant increases in rural household incomes and output.

The P.L. 480 Title III program is supporting the adoption and implementation of policies to replace government-mandated prices for agricultural commodities with broadly diffused market information and to reduce the role of the cereals marketing parastatal. Additional food aid policies seek to privatize all major ports and rail services; establish a private system for road maintenance; simplify business licensing, registration, and operations; and offer greater security and transferability of title to land. In addition, USAID is pursuing establishment of a legal framework for rural financial institutions and the liberalization of agricultural input markets throughout several programs.

To increase sustainable agricultural output and expand rural microenterprises, USAID finances collaborative efforts between government and private sector extension agents to introduce improved farming techniques, and help farmer-led associations process and market agricultural production and acquire entrepreneurial skills. Other income-generating activities that result in the preservation and enhancement of the agricultural resource base are being adopted. The rehabilitation of smallholder

cashew orchards, largely abandoned during the war years, is a priority because of its importance to sustainable agriculture and increased household incomes. Private voluntary organizations working with USAID are able to use local currency generated from P.L. 480 Title II sales to expand programs.

USAID is rehabilitating several key roads to connect agricultural production zones with urban markets and opening up new marketing opportunities for farming households. In conjunction with local communities, PVOs promote manual labor-based road rehabilitation to extend the network of farm-to-market roads. Over 1,000 kilometers of feeder roads will be improved and opened over the coming three years. USAID also supports the Mozambican government in ensuring road maintenance by providing technical assistance to a new road authority which administers maintenance funds, through training local private contractors in rehabilitation and maintenance, and through involving local communities who benefit directly from the roads.

Host Country and Other Donors: Key donors (World Bank, United States, Sweden, Denmark, Germany, Great Britain, European Community, United Nations Development Program) and the Mozambican government regularly consult on policy and implementation issues. The Ministry of Public Works and Housing effectively coordinates donor assistance for the rehabilitation of rural roads under the Roads and Coastal Shipping Project. The Ministry of Agriculture and Fisheries and donors are engaged in the preparation of a sector investment program scheduled for appraisal in FY 1998. A donor working group on microenterprise and microfinance meets regularly to share information and coordinate efforts. USAID and other donors are active in macroeconomic and sectoral policy dialogue with the Mozambican government.

Beneficiaries: An estimated 9 million people, 52% of Mozambique's population, live in USAID program target areas. Virtually all of these will benefit from the improved policy environment and USAID-financed technical interventions. The multi-donor roads program and market information systems will improve market access for 65% of this population. Food assistance ensures affordable wheat flour and edible oil for millions of poor urban Mozambicans, commodities which Mozambique does not produce in sufficient quantities.

Principal Contractors, Grantees, or Agencies: U.S. PVO partners of USAID include World Vision, CARE, Africare, Food for the Hungry, National Cooperative Business Association, Heifer Project International, Save the Children, World Relief, the Adventist Development and Relief Agency, and Technoserve. U.S. university partners include Michigan State University and the University of Wisconsin. Morrison Knudson International provides engineering services for the rehabilitation of rural roads.

Major Results Indicators:			Baseline			Target
Increase in rural per capita income		$ 50 		(1996)		$ 98	 	(2001)
Change in volume of 	(corn)			83,000 tons	(1995)  	134,000 tons	(2001)
marketed goods	(beans)        		12,500 tons 	(1995)		20,100 tons	(2001)
			(cashews)   		22,000 tons 	(1995)		35,400 tons	(2001)
Change in the:
a) No. of small and microenterprises		840,000 	(1996)		1,020,000 	(2001)
b)% of firms with more than one 	 	41% 		(1996)		55% 		(2001)
employee

Increased total crop production	(corn)	346,500 tons 	(1995)		449,000 tons 	(2001)
Increased small livestock production		90,500 	(1995)		145,500 	(2001)
 

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ACTIVITY DATA SHEET

PROGRAM: MOZAMBIQUE
TITLE AND NUMBER: Government and Civil Society Are Effective Partners in Democratic Governance at National and Local Levels, 656-S002
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $2,700,000 DA
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To promote citizen participation and increase the effectiveness of both government and civil society in democratic governance.

USAID Role and Achievements to Date: Mozambique represents one of the few "transition-to-democracy" success stories in Africa. USAID played a key role in this process by providing crucial support for the 1994 national elections which are considered a model by international observers. More recently, USAID activities have supported the consolidation of democracy in Mozambique through assistance to both government institutions and civil society organizations. Achievements include multiparty representation in an active National Assembly, now capable of seriously analyzing and debating, rather than simply rubber-stamping, legislation. The recent nationwide voter registration drive was a success, due in part to USAID assistance. Support to civil society institutions has resulted in initiatives to bring together political actors who have a history ranging from poor communication to deep distrust.

Description: USAID democracy and governance (D/G) activities focus on two complementary areas. The first involves increased citizen participation in governance, achieved through broadening debate and discussion of public policies, combined with increased informed participation in the electoral process. USAID activities are helping create the environment for improved public debate on key issues by developing opportunities for discussion and improving the substantive content of debate. For example, nationwide "citizen fora" have provided an opening for members of the legislature to meet with citizens and discuss issues of mutual concern. USAID support for public hearings on proposed bills within the National Assembly has led to the incorporation of citizen viewpoints into final legislation. Activities also improve the capacity of civil society organizations to constructively participate in public policy debate.

Recent activities supporting the electoral process include nationwide civic and voter education programs, and the training of voter registration and electoral monitors. Both sets of activities are being implemented in conjunction with Mozambique's first-ever local elections, which are planned for May 1998. Working with the Government's electoral administration, USAID supported the development of a comprehensive voter education program designed to increase informed participation in pre-election voter registration. This undertaking, supported by USAID through the National Democratic Institute (NDI), represented the first updating of the voter registry since the 1994 post-civil war general elections. The educational materials developed by NDI were used both by the Government's civic education workers, and by civic educators working with NDI's local non-governmental organization (NGO) partner. Working with the country's independent National Elections Commission, another USAID activity trained over 300 political party representatives responsible for monitoring the registration process. While the monitors reported some irregularities, which in most cases were promptly rectified, the overall registration process was considered a success. In fact, at the conclusion of the registration period an estimated 90% of the country's eligible voters were registered -- a remarkable feat given the many isolated rural areas throughout Mozambique.

The second D/G area is focused on institutional strengthening to improve the effectiveness and accountability of both government and civil society organizations. USAID's principal activity in this area supports the National Assembly. Implemented by the State University of New York, the main objectives of this multi-year program are to strengthen the legislative capabilities of Assembly commissions,

improve the two-way flow of information between the Assembly and constituents, and increase the effectiveness of both elected representatives and staff. Another capacity-building program is underway with the Maputo court system which emphasizes improvements in civil procedures. At the same time, USAID is supporting the development of alternative dispute resolution mechanisms in Mozambique. The possible use of arbitration to resolve commercial disputes is anticipated by the end of 1998. Support will be given to civil society organizations to improve their ability to promote change, and after local elections are held in mid-1998 assistance will be directed at newly constituted municipalities as well.

Host Country and Other Donors: Since the end of 1996, USAID has worked closely with the Mozambican government in programming democracy-related activities, while at the same time continuing to support civil society institutions. The World Bank, the United Nations Development Program, and the European Union will likely continue their significant programs. In terms of resource levels, the USAID program ranks third among bilateral democracy/governance programs in this area. USAID works closely with other donors through the Development Partners Group, and several technical level working groups (USAID chairs the group on parliamentary assistance). USAID's principal governmental partners include the Ministry of State Administration, the National Assembly, and the Supreme Court.

Beneficiaries: All Mozambicans stand to benefit from the democracy program. Given the programmatic emphasis on greater participation, historically disenfranchised groups, including rural residents and women throughout the country, will benefit particularly. Although democracy and governance are clearly national issues, due to resource constraints USAID will necessarily focus its rural field activities in the four central provinces selected as the target of the overall USAID program. Given the potential impact of improved governance on USAID's economic and social sector efforts, such a strategy will promote useful synergy between many of USAID's activities.

Principal Contractors, Grantees, or Agencies: Democracy and governance activities are implemented primarily through U.S. and local non-governmental organization partners and government entities. U.S. organizations involved with the current program include the National Democratic Institute for International Affairs, the International Foundation for Election Systems, the National Center for State Courts, and the State University of New York Research Foundation.

Major Results Indicators: 
							Baseline		Target
Citizen perception of influence on public		39%	(1997)		50% 	(2001)
decisions (percentage of public polled in
nationwide public opinion survey (POS))
							
Citizen perception that government works		15%	(1997)		33% 	(2001)
for citizens (POS)
							
National Assembly provides substantive input	0%	(1995)		25%	(1996 target) 
into legislation proposed by the executive branch				43%	(1996 actual)
(percentage of total legislation per year)

No. of times civil society representatives testify
before National Assembly committees		0 	(1995)		1	(1996 target)
										2	(1996 actual)

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ACTIVITY DATA SHEET

PROGRAM: MOZAMBIQUE
TITLE AND NUMBER: Increased Use of Essential Maternal/Child Health and Family Planning Services in Focus Areas, 656-SO03
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $9,920,000 CSD; $6,300,000 DA; $2,800,000 P.L. 480 Title II...........................
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To increase the use of essential maternal child health and family planning services by expanding access to and demand for community-based services.

USAID Role and Achievements to Date: Access to health care services and information is the major constraint to improved health. Only 30% of the population have access to health care, and 40% of health facilities have no trained staff. Use of essential services is constrained by inadequate knowledge of safe health practices and how to obtain these services. The health sector itself lacks institutional, human and financial resources to provide adequate services.

USAID focuses its efforts on rural provinces where health conditions are most acute. Through its primary health care activities, USAID has supplied essential drugs to most rural health facilities. USAID has improved management skills at Ministry of Health (MOH) clinics, and USAID technical assistance to the ministry supports decentralized planning and management in three provinces. Significant progress has been made in strengthening MOH capacity for provincial level planning, human resource management, supervision, as well as for improved budgeting and financial management systems.

USAID also supports the work of U.S. and international private voluntary organizations (PVOs) working with the MOH to improve the health of mothers and children through delivery of basic health information and services. USAID assistance has evolved from emergency relief to focus on sustainable development of rural health services. Over 5 million people in USAID's focus provinces now have access to improved services. USAID emphasizes beneficiary participation in program design and implementation through partnerships with indigenous non-governmental organizations (NGOs), in collaboration with public sector counterparts at national, provincial and community levels.

USAID-funded activities are contributing to increases in immunization coverage, prevention and treatment of diarrheal disease with oral rehydration therapy, child spacing, prenatal care, births assisted by trained personnel, improved nutrition, and exclusive breast-feeding. There have been notable achievements in raising the awareness of HIV/AIDS and changing high-risk behavior. Through the USAID-funded social marketing project, 1,800 private commercial sales outlets have been established and 100 sales agents trained. Condom sales have far exceeded expectations, with more than 16 million sold.

Description: USAID's program has three targets: 1) increased access to health services; 2) increased demand for these services; and 3) strengthened management of decentralized services.

In order to expand access, health services are being brought closer to the people. USAID supports the development of a strong outreach program in the focus provinces. With the help of PVOs, the MOH is emphasizing outreach from fixed facilities and the placement of health volunteers in communities. The USAID strategy also recognizes the need to improve the quality of clinic-based health services. By ensuring the availability of essential commodities, and by expanding and improving the human resource base, USAID support helps to ensure that facilities have the capacity to provide basic quality care. This includes the development of functional referral systems, essential to ensure basic standards.

With prevalence of HIV/AIDS increasing rapidly, and knowledge and use of safe child spacing being very limited, increasing awareness of and demand for reproductive health services is important to achieving an improvement in the health of Mozambicans. USAID is working with the MOH to expand family planning services into all basic health programs. Efforts are underway to build provincial level capacity to implement education campaigns aimed at producing changes in sexual behavior. To combat the spread of HIV/AIDS, USAID supports a social marketing activity to increase condom demand and access.

USAID also supports MOH decentralization, improved pharmaceutical management, health care financing and improved systems for data collection and analysis. These activities are strengthening the capacity of the government and local non-governmental organizations to develop and sustain effective health policies and to expand effective and efficient service delivery.

Host Country and Other Donors: Mozambique relies heavily on donors for health sector support, particularly in rehabilitating rural health facilities destroyed during the war. Switzerland, at the request of the Ministry of Health, has taken the lead in coordinating donor activity in the health sector. Other donors include the Netherlands, Finland, Denmark, the European Community, the World Bank and the United Nations Children's Fund. They are also supporting USAID-led programs to move from centralized to provincially-based management systems.

Beneficiaries: Children under five years of age and women of child-bearing age in Mozambique represent almost 40% of Mozambique's population. The USAID program focuses on the most densely populated rural provinces, where needs are the greatest. USAID support will reach over 8 million people by the end of 2001.

Principal Contractors, Grantees, or Agencies: USAID works with the Ministry of Health and U.S. and international PVOs to carry out activities in support of this strategic objective. U.S. PVOs, such as World Vision Relief and Development, Save the Children, CARE, and Project HOPE are particularly effective in supporting community outreach activities and in helping the MOH train health workers. Several other U.S. PVOs, such as Pathfinder, Population Services International and Health Alliance International have formed partnerships with Mozambican NGOs to build indigenous capacity. USAID also works with U.S.-based cooperating agencies to provide technical assistance for education programs, logistics management, data collection and analysis, and specialized reproductive health services.

Major Results Indicators:				Baseline			Target
Children 12-23 months vaccinated with diphtheria, 
pertussis and tetanus (third dose) 			49% 	(1997)		65% 	(2001)

Infants fed solely on breast milk			37% 	(1997)		60% 	(2001)

Cases of diarrhea in children				40% 	(1997)		60% 	(2001)
treated with oral rehydration therapy

Women using a modern contraceptive method	2.3% 	(1997)		12% 	(2001)

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ACTIVITY DATA SHEET

PROGRAM: MOZAMBIQUE
TITLE AND NUMBER: Increased Use of Sustainable Natural Resource Management Practices; 656-SO04
STATUS: New
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $3,000,000 DA
INITIAL OBLIGATION: FY 1999 ESTIMATED COMPLETION DATE: 2001

Purpose: To increase Mozambique's capacity to protect the environment and manage natural resources sustainably.

USAID Role and Achievements to Date: USAID's strategy integrates environmental protection in program activities that support sustainable agricultural development and economic growth. To date, USAID-funded activities focus on rural income increases through rehabilitation of Mozambique's agriculture sector on an environmentally sustainable basis, including rehabilitation of an important agroforesty crop, cashews. Community groups are actively working together to expand use of sound, on-farm environmental practices. Through the University of Wisconsin's Land Tenure Center, USAID provided technical assistance which led to 1997 legislation that will enable easier land access and titling for smallholders and communities -- a critical step to promoting the sound, long-term use of resources. USAID support has also strengthened Mozambique's capacity for environmental impact analysis in the area of road rehabilitation.

Description: The majority of USAID's target population is rural and poor. With little formal education and few formal sector employment opportunities, rural Mozambicans depend on subsistence agriculture, fishing and exploitation of forest products. Mozambique is experiencing rapid rural economic expansion, both small-scale and through large commercial concessions with the end of its civil war. Clearcut logging and slash-and-burn farming are destroying natural habitats and lead to soil fertility loss, erosion, siltation of waterways and coastal water quality degradation. If not addressed, this trend may diminish the sustainability of USAID, Government of Mozambique and other donor investments and create long term liabilities.

Environmental awareness among Mozambicans is minimal, and the country is yet to benefit from significant public interest in environmental regulation and enforcement. In USAID target areas there is very limited ability to manage natural resources sustainably. These are the same areas where conservation of watersheds, forests, wildlife, and important ecosystems is important for production of primary commodities and economic diversification. Achievement of rural economic growth requires a holistic approach, with integrated land-use planning and mechanisms whereby communities or individuals retain the right to manage their resources.

Mozambique is poised for large projects by foreign investors, such as exploitation of natural gas fields, a large aluminum smelter and mining activities. These are natural resource-intensive activities and carry the potential for significant environmental impact. Given weak in-country capacity, an inability to carry out required environmental assessments will ultimately delay these projects or result in insufficient consideration of environmental issues.

The lack of technical capacity is also felt at the local level, where there is a dearth of natural resource management planning capacity. As part of the new Land Law, groups including communities seeking land tenure for economic purposes will require environmentally-sound land use plans prior to titling. Sufficient expertise does not currently exist in Mozambique for this large effort, and there is a clear need for greater private capacity in country.

In FY 1999, USAID proposes to initiate a new strategic objective to support increased use of sustainable natural resource management practices, building on past USAID experience in promoting

sound agricultural practices and alternative economic activities through sustainable natural resource use.

USAID proposes three program targets. First, USAID activities would increase the knowledge and adoption of sound environmental practices, through community-based education programs to increase environmental awareness and adoption of sustainable resource use technologies. Second, USAID would strengthen Mozambican capacity for environmental public information and analysis. This would include activities to strengthen the private sector's role in meeting communities' needs for land use planning, and in promoting the protection of important ecosystems and conservation of economically-significant natural resources. USAID also would strengthen the government's regulatory role and private sector capacity to analyze the impacts of proposed investments. Third, USAID would increase sustainable environmental enterprises in USAID target areas. These would include the sustainable harvesting of forest timber and resins, medicinal herbs, and honey; multiple resource use activities in coastal zones and protected areas, including, ecotourism.

Host Country and Other Donors: USAID works closely with other donors through its participation in the Development Partners Environmental Working Group. Under the proposed new program, USAID will support the broader objectives of the Government of Mozambique and Other Donors. The Netherlands is the largest donor and is strengthening directly the capacity of the Ministry of the Environment. The World Bank supports coastal zone management through the Global Environmental Fund. Other donors with more limited environmental interests include United Nations Development Program, Denmark, Sweden, and Canada.

Beneficiaries: USAID's rural target group of 8 million people in four focus provinces would benefit from increased protection of natural resources that are critical to sustainable livelihoods. This would result from an increase level of environmental awareness, a public demand for protection of economically-important ecosystems, increased capacity to analyze environmental impacts, and diversified income-earning opportunities through environmental enterprises.

Principal Contractors, Grantees, or Agencies: Current agricultural-related environmental activities are implemented primarily through U.S. private voluntary organizations (PVOs) including Food for the Hungry, World Vision, CARE, Adventists Relief and Development Agency, Technoserve, and PACT. USAID anticipates that local organizations would play a significant role in managing activities under this new program. In addition, building environmental assessment capacity would focus on private sector organizations, limiting direct assistance to government's role in environmental regulation.

Major Results Indicators: As this is a new objective, baseline and indicators are being established but will include:

Increased environmental awareness
Adoption of sustainable natural resource management practices
Private sector entities strengthened in land use planning
Individuals trained in environmental impact assessment
Environmental enterprises initiated

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