By the Blouin News Business staff

Agro-biz SEZs may sprout up in Mozambique

by in Africa.

A traditional African village in Mozambique. Getty Images

A traditional African village in Mozambique. Getty Images

Mozambique has taken the first steps towards creating special economic zones (SEZs) that will hopefully boost agro-business. In order to promote investment and increase farm production, the country has now identified 24 “development poles” that could potentially have SEZs, according to Minister for Agriculture and Food Security Jose Pacheco. He was quoted on Tuesday by local newspaper Notà­cias as saying the sites were determined based on agro-climate conditions, strategic location vis-à -vis markets, existing or planned infrastructure, and the need to diversify farm products.

Agriculture is the backbone of Mozambique’s economy, accounting for over a quarter of the country’s GDP and employing 80% of its labor force. The overwhelming majority of producers are subsistence farmers, whose chronic food insecurity is exacerbated by climate change and natural disasters such as floods, droughts, and cyclones. But Mozambique has the potential to eventually become a major food producer, since only 16% of its arable land is currently cultivated. Therefore, improving agricultural productivity and ensuring access to food are top priorities for Mozambique’s leaders.

The government’s new plan has identified a wide range of opportunities all along the value chain for crops such as potatoes, wheat, beans, corn, soy, and rice, as well as poultry, cattle, and timber. Pacheco added that the creation of the agro-business SEZs (grouped into 6 corridors) is being coordinated with the Ministry of Economy and Finance so that operators may eventually benefit from some tax exemptions.

Mozambique’s annual GDP growth has averaged 7.4% over the past two decades, following the end of its 16-year civil war in 1993. “Regional Spatial Development Initiatives Programs” and “Growth Poles” are at the core of the country’s development; they aim to foster spill-over growth by attracting small and medium-sized enterprises related to large (usually public) investment projects. Notà­cias reported that Mozambique’s experience with SEZs is relatively recent, dating to Government Decree no. 75/2007, which established the Office for Accelerated Economic Development Zones. Only 5 SEZs have been established to date, so the new plan would be a major expansion.

If these agro-business development poles and SEZs prove to be successful, then they may later be expanded, even internationally. Building links from neighboring landlocked countries to Mozambique’s ocean ports could make the country an important player in regional food security and international markets, notes USAID.

Enormous recent discoveries of offshore natural gas and a proposed LNG terminal may make the most headlines, but boosting agribusiness will provide far more jobs and feed more people. The government is right to encourage both simultaneously.