Whose Wealth Is It Anyway? Mozambique's Outstanding Economic Growth with Worsening Rural Poverty

ABSTRACT Despite rapid economic growth and massive inflows of aid, rural poverty in Mozambique is worsening. Agricultural production and productivity have not increased in the last decade. Use of chemical fertilizers and other modern technology is at a low level and decreasing. The present development model emphasizes that the role of government and donors is to provide human capital and infrastructure, while the private sector is responsible for economic development and ending poverty. The most recent national surveys confirm what is being seen elsewhere in Africa — that this non‐interventionist strategy does not raise agricultural productivity or reduce poverty. While 80 per cent of Mozambique's population is engaged in agriculture, this sector contributes only 20 per cent of GDP. This suggests that investments in agriculture are likely to generate pro‐poor growth, both to rural and urban dwellers. This policy failure is increasingly recognized, but donors and government have invested too much political capital in the current policy to change easily.