Zambézia will be the main target of the $500 million project of the US agency Millennium Challenge Corporation (MCC) in Mozambique, the final version of which has been delivered to Congress, including a new bridge on the Licungo River.
In the notification sent to the US Congress by the MCC on 16 August, consulted today by Lusa, it is stressed that that “highly impoverished” province in central Mozambique is 1,000 miles (1,600 kilometres) from the “epicentre of the conflict in Cabo Delgado”, the northern province affected in the last six years by terrorist attacks, and which will be the “target area” for this investment.
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The MCC, an external support agency funded by the US government and which provides grants for a fixed period to developing countries, plans to sign the agreement for this funding on 21 September in the presence of Mozambique’s President Filipe Nyusi.
The MCC board of directors announced this funding compact, called the Mozambique Coastal Connectivity and Resilience Pact, the second since 2007, last June, this time focusing on improving transport networks in rural areas, encouraging commercial agriculture through political and fiscal reforms and improving coastal livelihoods through climate resilience initiatives.
The total funding for projects already identified by the MCC will be $500 million (€465.7 million), with disbursements due to start in the 2023 fiscal year, plus the Mozambican government’s contribution of $37.5 million (€35 million).
The information sent by the MCC to members of Congress highlights the project for the new bridge over the River Licungo and the construction of the Mocuba bypass as the main priority for transport in Zambézia.
The MCC funding will enable the construction of “a major new bridge of the highest standard”, which will replace the current crossing, now almost 80 years old, diverting traffic from the town of Mocuba to a new location via a 16-kilometre bypass.
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Overall, the MCC allocates $310.5 million (€290 million) to Rural Transport and Connectivity (CTR) projects, including the bridge over the River Licungo and the construction of the Mocuba bypass, a project valued at $201 million (€187.7 million). Almost $83.5 million (€78 million) is earmarked for the construction of rural roads and $11 million (€10.3 million) for road maintenance, among others.
The Reforms and Investment in Agricultural Projects (PRIA) component has been allocated $30 million, half of which is for the Agricultural Investment Tax reform package, and the other half is for setting up the Zambézia Province Commercial Aggregation Platform.
“The PRIA project will support the government of Mozambique with a series of political and technical reform measures and assistance to increase the ease and decrease the cost of doing business in the national agricultural sector, including a new tax code for agricultural taxpayers and an improvement in VAT and in the reimbursement model in the sector,” the document said.
The third structural component of this investment is aimed at Coastal Livelihood and Climate Resilience (CLCR) projects, worth $100 million, to strengthen productivity “through sustainable increases in fish and shellfish harvesting and through non-extractive activities” but also using “sustainable ecosystem benefits, such as carbon credits and coastal protection benefits”.
The CLCR is organised into two activities, “Coastal Livelihoods”, to “help local communities better manage” fishing activity, update practices, fishing gear and the supply chain, and “Climate Resilience”, which aims to “protect and restore critical habitats through co-management with local communities, conservation and creation of protected areas, reforestation initiatives and through carbon finance opportunities”.
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“Recognising the differences in development approaches between the CLCR project and the recent growth of heavy sands mining along Mozambique’s coastal zones, the government has committed not to authorise mining concessions and operations in the CLCR project zones and (…) to follow all laws in force in Mozambique, including those related to the protection of sensitive ecosystems, intensifying the inspection and monitoring of mining activities in progress in areas close to sensitive ecosystems,” the document also states.
MCC added that it has developed “projects that will strengthen economies that depend on agriculture and fishing but are limited by connectivity and safe access”.
“The Compact presents three projects that meet MCC’s broad investment criteria, including an estimated economic rate of return of 14.7%,” it also said.
