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News, 11/9/2016

Good and bad news from Mozambique - cities are becoming richer while rural areas are becoming poorer

According to a recent study, increasing numbers of Mozambicans have been lifted out of extreme poverty. Mozambique is among Finland's long-standing development partner countries, and Finland played an important role in conducting a study on national poverty.

As cities have grown, well-being gaps within the country have become increasingly large. Decision-makers are now expected to take action to improve the living conditions of the poor in rural areas and of those living in informal economy.

The results of the fourth study on national poverty in Mozambique were published in Maputo at the end of October. The research data which is based on statistically exhaustive sampling was collected in 2014. Mozambique's National Institute of Statistics was responsible for the collection of material. The results of the study do not yet reflect the effects on poverty of the current economic crisis, the collapse of Mozambique's currency metical (MT) and the accelerating inflation.

Poverty has declined most in Maputo, the capital city, and its surroundings. Photo: Laura Torvinen.

The study examines poverty both from the perspective of consumption poverty and from the perspective of multidimensional poverty and well-being. The first one measures poverty primarily from the perspective of the population's food consumption while the second one evaluates the possibilities to have access to basic education and health care, water and sanitation services and consumables.

Poverty on decline

According to the study, the relative proportion of those who live in extreme poverty has declined both in light of consumption poverty indicators and multidimensional poverty indicators. The results were compared with those of the previous study on poverty in 2008-09. As far as consumption is concerned, the relative proportion of those living in extreme poverty still exceeds 46%; in 2008-09 almost 52% of Mozambique's population lived in extreme poverty.

The situation in the province of Maputo which surrounds the capital has improved the most: the proportion of those living in extreme poverty has decreased substantially from 55.9% to 18.9%. Development in Maputo, the capital city has also been highly positive.

Mozambique's population growth has been rapid, about 2.8% in 2010-2015. Therefore the number of people who live under the national poverty line (30 MT per day = about EUR 0.75 in 2014) has increased during the period under review. A total of 11.8 million people now live under the national poverty line. When comparing with the results from the first study on poverty (1996/97), the number of poor people has remained the same although the population growth was about 50% during the same period.

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Villagers at the well in the district of Nicoadala. Photo: Jaakko Jakkila.

Growing inequality

What causes most concern is the growing inequality between population in rural areas and cities, and among the different provinces. Inequality has grown substantially over the past five years. The range of the so-called Gini coefficient which describes inequality from zero to one (0 = full equality; 1 = full inequality) has risen from 0.40 to 0.47.

In the northern province of Niassa, the relative proportion of the poor among the entire province's population has almost doubled from 33% to 60.6%.

The key message of the report to Mozambique's decision-makers is that to eliminate extreme poverty highly consistent measures must be taken to improve the living conditions of the poor in rural areas and of those living in informal economy. Investments are needed into the agricultural sector and especially small farmers who are self-sufficient should be supported.

Investments into education and employment

The unofficial sector which increasingly employs young people entering the labour market suffers from low productivity; those who make their living in this sector are very vulnerable to different external factors and they have very limited possibilities to rise from extreme poverty. Investments into improving employment and productivity are essential.

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Self-sufficient small farmers need special support. Photo: Jaakko Jakkila.

The representatives of the Ministry of Finance, the University of Eduardo Mondlane, OXFAM Organisation, the World Bank and the WIDER Institute who took part in the panel discussion that followed the presentation on the study results shared the concern for Mozambique's rapidly growing inequality. Is the country's government really prepared to draw conclusions on the basis of the study on poverty and to address the problems raised by it? Those who took the floor underlined the need to improve people's access to information on the societal services they are entitled to.

Finland has directed development cooperation funding to the research department of the Ministry of Finance.  In cooperation with researchers of the WIDER Institute and the University of Eduardo Mondlane, the research department was responsible for analysing the data and preparing the report of the study on poverty.

Laura Torvinen

The writer is Finland's Ambassador to Mozambique.

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