AfDB Grants Mozambique $47.09m for Special Agro-industrial Processing Zone

The African Development Bank Group (AfDB) has approved a $47.09 million grant for the first phase of Mozambique’s Pemba-Lichinga Integrated Development Corridor, a Special Agro-Industrial Processing Zone.

The grant from the AfDB is expected to improve agricultural productivity and agribusiness development in the Niassa province by building institutional capacity, skills, and entrepreneurship.

In the project, Niassa will improve policy and development coordination with national departments, especially the Ministry of Industry and Commerce and the Ministry of Agriculture and Rural Development.

In Special Agro-Industrial Processing Zones, agro-processing activities are concentrated in areas of high agricultural productivity to boost productivity, integrate production, processing and marketing. Farmers, processors, aggregators, and distributors will be able to operate in the same geographical area, thus reducing transaction costs and enhancing productivity and competitiveness. As well as providing adequate infrastructure (energy, water, roads, ICT, etc.) to rural areas of high agricultural potential, SAPZs will also attract investments from private agro-industrialists and entrepreneurs to contribute to the economic and social development of rural areas.

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The project aligns with Mozambique’s National Development Strategy 2015-2035, which aims to improve living standards by restructuring the economy and expanding and diversifying its production base. These initiatives are consistent with the international community’s concerted efforts to promote inclusive economic growth and peacebuilding in Mozambique’s north.

It also aligns with the AfDB’s Country Strategy Paper for Mozambique 2018-2022, with a focus on the northern provinces, and its Feed Africa Strategy for agricultural transformation.

According to Carlos Mesquita, Mozambique’s Minister of Industry and Trade, the project is a “gamechanger” that will promote social inclusion, boost the economy, and foster peace by improving important industry enabling factors such as infrastructure for development.

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AfDB Country Manager for Mozambique, Cesar Augusto Mba Abogo, emphasized the importance of Special Agro-Industrial Processing Zones as a shared facility to enable agricultural producers, processors, aggregators, and distributors to compete more effectively by reducing transaction costs, sharing business development services, and increasing productivity and competitiveness. 

“SAPZs can promote the participation of small producers in value chains and value addition, thus offering an inclusive development model,” he stated.

The project builds upon a long list of Bank interventions that have provided infrastructure in northern Mozambique and helped unlock its agricultural potential. 

Two of these latest bank-supported projects are the N13 Cuamba-Mu*ta and N14 Montepuez-Ruaca roads connecting Cabo Delgado and Niassa.

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