Project Factsheet
Tools for » More and better jobs in Cabo Delgado province and Nampula province - Harnessing the opportunities of the New Economy in Mozambique
Project ID 00091681 Description SDG-F JP Mozambique
Fund
SDG Fund
Start Date *: 29 Jan 2015
Theme
Joint Programmes
Project status On Going
Country Mozambique Participating Organization   Multiple
About

Sectorial area of intervention and policy objectives

Inclusive economic growth for poverty eradication

Create opportunities for decent jobs and secure livelihoods.

Create better government policies and fair and accountable public institutions.

Promote inclusive and sustainable business practices.

 

Joint programme summary:

The proposed programme seeks to contribute to improved articulation between stakeholders to promote sustainable livelihoods for young people (both male and female) and female-headed households, through adjusting economic policies and strategies to generate sustainable employment. The proposal acknowledges that Multi-National Enterprises (MNEs), and extractive industries (EI) in particular, represent an opportunity which is far from being exhausted in terms of the absorption of local labour and the integration of local small and medium sized enterprises (SMEs) in their value chains to the benefit of local economies.

For a small economy like Mozambique, the ongoing and expanding development of the EI sector should have a positive and transformative impact on socio-economic development and for governance. Youth employment and extractive industries represent two of three "signature" issues for the UN in Mozambique, a choice derived from a perceived urgency to tackle poverty-related issues like social exclusion and economic disparities a contribution to conflict-prevention whilst at the same time strengthening the role of the UN as a trustworthy partner between government, business and labour organizations and civil society.

The development challenges that the proposed programme will address are the current low impact of MNE on wealth and job creation, particularly in the natural resource extraction sector in Mozambique. While investment in EIs contributes positively to increasing GDP and government revenue, the effect on broader based prosperity has so far been marginal for three reasons: Firstly, many of the jobs created in and around EI mega-projects have not directly resulted in employment opportunities for young Mozambicans. For example, in 2010 the five main mega-projects combined only created an estimated 3,800 direct jobs and Government approved private investments with an estimated value of US$3.4 billion in 2011 are projected to create a mere 33,871 new jobs – an equivalent cost of US$ 1,385 million per direct job. The challenge is that the majority of these jobs are highly skilled and specialized whereas the vast majority of young Mozambicans can only offer low-skilled or un-skilled labour, with women falling largely in the latter category.

Secondly, national firms often fail to supply MNEs with local content. “local content"   generally refers to the purchase locally of goods and services that are relevant to specific industrial infrastructures and value chains. As a positive first step,the Ministry of Mineral Resources recognized the policy challenges during the consultations leading to the design of draft regulations relating to the local content strategies of mineral investors. Although the development of local content strategies is expected to be implemented in mining concessions, the enforcement of this policy tool may be confronted with a weak manufacturing sector and industrial policies and strategies that are acknowledged by Government and partners to be in need of urgent upgrading to conform to the present socio-economic and technological challenges. For example, the value of locally purchased goods and services in 2011 stood at $350 million, a figure that pales compared to the multi-billion dollar investments made by MNEs in the same year.

Thirdly, and related to the above, local SMEs remain excluded from the benefits related to the extractive industries since business (small supplier, big buyer) linkages and value-chain development, which could maximize employment creation and local transactions, are far from being made a reality. For example, several thousand people will need to be resettled to develop the Afungi project in Palma District in Cabo Delgado Province, but the environmental and social impact assessment study commissioned by the investor makes no reference to livelihood creation or to the affected communities.

The proposed programme will address these development challenges through promoting and facilitating the development of gender-sensitive employment policies, work force skills, and the productive capacity of SMEs and business linkages in partnership with selected MNEs operating in the provinces of Cabo Delgado and Nampula.

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Contacts

If you have questions about this programme you may wish to contact the RC office in Mozambique or the lead agency for the programme. The MPTF Office Portfolio Manager (or Country Director with Delegation of Authority) for this programme:

The persons with GATEWAY access rights to upload and maintain documents for the programme:

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