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Wednesday, 18 June 2008

In pursuit of a "green revolution"...

After a decade of sustained economic growth , at times as high as 14 percent, driven by huge capital investments, Mozambique is realising that foreign direct investment is not everything. The problem appears to be that large infrastructure projects like Mozal may worth a lot ($2.1bn in Mozal's case) but their impact on direct employment creation is minimal (1000 in Mozal's case). In response to growing concerns, the Mozambique government is responding with a "second wave of reforms" which aims to share wealth a bit more . Excerpt:

But PARPA's second phase - launched in 2006 - is the pursuit of a "green revolution", designed to open up the country's 128 districts to the rewards of commercial agriculture through the provision of transport, communications infrastructures and financial services in the rural central and northern provinces. About 80 percent of the country's 21 million people are engaged in small-scale farming.

“[Our] main aim is to get the country to produce enough food to meet domestic consumption. At the moment we still import rice and maize to augment our local production,” Caterina Pajume, deputy minister of agriculture, told IRIN. “We are doing this by funding [at low interest rates] agricultural projects [at the grass roots level] in the 128 districts of the country.”

The government is also revising its approach to extractive industries to ensure that future mega-projects, like Mozal, generate more revenue for the poor. New tax regulations, such as 10 percent on oil, six percent on natural gas, 10 percent on other mining products, would also see mining concerns paying a tax on a mine's surface area.

Deputy Minister of Mineral Resources, Abdul Razak, said earlier this year the 2007 laws had made it obligatory to publish fiscal revenue from petroleum operations, and ensure that part of the tax revenue from mining and petroleum operations would be used for the local community's benefit.

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