Abstract
Selected Issues
Enhancing Resilience to Climate Change in Mozambique: Risks and Policy Options1
While the long-term impact of climate change remains largely uncertain, it is expected that it has adverse effects on ecosystems, infrastructure, human health and welfare. Mozambique is one of the most vulnerable countries in the world and subject to a range of climate hazards: drought, floods and coastal storms, often with cascading effects. Moreover, there is significant disparity in the capacity of the various regions to cope with these disasters, with rural areas the worse off. Rising sea levels is expected to compound the overall vulnerability of urban areas by more inland flooding and infrastructure damage. Integrating climate change within the broader developmental agenda is critical to improve preparedness going forward. While these efforts will be costly, particularly in the context of limited fiscal space, evidence from other countries in the region suggest that small low-cost initiatives can be equally effective in enhancing preparedness.
A. Background and Context
1. Mozambique is one of the most vulnerable countries to natural disasters and climate risks (Figure 1). It is ranked 11th worldwide and 3rd in sub-Saharan Africa (World Risk Index, 2016). The country’s geographic location and topography (particularly low-lying elevation) add to the risk. Additionally, weak socio-economic infrastructure, high poverty and heavy dependence on rain-fed agriculture magnify these risks, in a context of limited access to insurance. Limited preparedness and lack of adequate resources further inhibit the country’s crisis adaptation and response capacity.
Mozambique: Vulnerability to Natural Disasters and Climate-induced Events
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Source: World Risk Index 2016.B. Implications of Climate Change
2. Climate change is already taking a toll on Mozambique. 14 of the 15 warmest years on record have occurred since year 2000 (Figure 2), resulting in a drastic change in the weather patterns of Mozambique: Annual temperature has increased by 0.6C degrees from 1960 to 2006 and is projected by increase by 1 to 2.8C degrees by the 2060s (McSweeney et al 2010); Average annual rainfall has decreased at a rate of 2.5mm per month between 1960 and 2006 (ibid.). Rainy seasons commence later, and dry spells last longer. Besides these patterns, Mozambique already started to feel the pinch of more extreme climate-related events, such as El Niño-driven drought in 2015/16.
Mozambique: Global Surface Temperature, Deviation from 20th-century,
(Average, °C)
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Sources: National Center for Environmental Information; and IMF staff calculations.3. Rising sea levels pose a significant threat to Mozambique’s coastal ecosystems and livelihoods. On a global scale, sea levels have already risen by roughly 9 inches since 1880 (Figure 3), and are projected to increase2 by another 12 to 35 inches by 2100 posing threat to low-lying countries. In Mozambique, over 13 million (60 percent of the population) lives in low-lying coastal3 areas with weak, non-resilient infrastructure and relies on local natural resources for their livelihoods. Against this background, sea level rise and associated saltwater intrusion could affect the availability of aquaculture, the viability of the coastal mangrove systems, and contaminate already stressed water supplies. There are already noticeable coastal erosion problems, but further sea level rise4 will increase the risk of flooding in the lowest lying areas, hence exacerbating the proliferation of unplanned settlements. Sea level rise also poses a threat to food security as it can lead to saline intrusion of agricultural lands along the coast.
Mozambique: Global Average Absolute Sea Level Change
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Sources: Commonwealth Scientific and Industrial Research Organization (CSIRO); and National Oceanic and Atmospheric Administration (NOAA).Note: Satellite data are based solely on measured sea level, while the long-term tide gauge data include a small correction factor because the size and shape of the oceans are changing slowly over time.C. Impact of Climate-Induced Disasters
4. Climate change, exacerbated by the recent El Nino, has increased the frequency and intensity of extreme weather events. Largely due to its geographical location, Mozambique is often impacted by droughts, storms, and tropical cyclones (Figure 4). Epidemics are also widespread. During the period 1992–2016, Mozambique was impacted by 78 natural disasters. These disasters affected over 17 million people and resulted in a cumulative economic damage of over 14 percent of GDP. The increased severity of these natural calamities challenges the country’s capacity to cope with such events.
Mozambique: Natural Disasters by Number and Type, 1992–16
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Sources: EMDAT database; and IMF Staff calculations.Note: Other include earthquake, landslide, and wildfire.5. Droughts, along with floods and storms, account for the bulk of population affected (Figure 5). Given their longer duration, droughts have gradually left almost half of the Mozambican population on the brink of famine. Floods affected 36 percent of population, over twice the regional impact. Storms affected almost 5 times more people in Mozambique than SSA.
Mozambique: Population Affected by Type of Natural Disaster
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Sources: EMDAT database; and IMF staff calculations.6. Epidemics are the deadliest natural disaster in Mozambique (Figure 6). Of the 4,862 disaster-related deaths between 1990–2016, epidemics claimed 2,881 lives (or roughly 60 percent). Increased extreme weather events, coupled with weak sanitation and limited access to clean water, contributed to this outcome.
Mozambique: Total Reported Deaths by Type of Natural Disaster
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Source: EMDAT database.7. The economic cost of natural disasters in Mozambique is among the highest among neighbors (Figure 7). The relatively high vulnerability of Mozambique to hydro-meteorological disasters resulted in a cumulative economic loss of 16 percent of GDP over the period 1990–2016. Such magnitude is largely explained by the interplay between high disaster proneness and weak socio-economic infrastructure, making Mozambique particularly vulnerable.
Mozambique: Total Reported Economic Cost of Natural Disasters, 1990–2016
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Sources: EMDAT database; WEO and IMF Staff calculations.8. Event studies suggest that natural disasters are associated with a marked slowdown in growth, but triggers a limited countercyclical fiscal response (Figure 8). Whilst corroborating the growth decline, events analysis suggests a broadly muted impact on the fiscal balance. To this end, some effects may occur with lags (associated with revenue or reconstruction), be obscured by expenditure switching, or be offset by external budget support.
Mozambique: Event Analysis, Impact of Natural Disasters on Macroeconomic Indicators, 1990–2016
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Sources: EM-DAT database; Mozambique authorities; and IMF Staff calculations.D. Structural Factors Contributing to Mozambique’s Vulnerability to Climate Change
9. Climate change will further strain government’s efforts to eradicate poverty. Mozambique is one of the poorest countries in the world, ranked 181st out of 188 in the UN’s Human Development Index (UNDP 2015). Poverty has significantly declined in the last two decades, but inequalities have increased and poverty has even increased in remote rural areas. Forty-six percent of the population live below the poverty line (2014/15 Household Budget Survey), while 80 percent of the population cannot afford an adequate diet (WFP 2017) and prevalence of under 5 stunting is 43 percent (Figure 9). Undernourished population ratio in Mozambique is much higher than in the region (Figure 10). Most of food-insecure households are located in the arid and flood-prone areas of the South and Center. Climate change will increase the impact on the most vulnerable the hardest as they are the ones who settle in the most appalling areas, which also tend to suffer from weak housing standards. The lack of effective social nets also increases the vulnerability of households’ hit by reduced subsistence production and wages. In addition, credit constraints and limited insurance reduce options to cope with disasters’ impact. Climate change could thus further compound poverty and income inequality.
Mozambique: Poverty, Inequality and Child Malnutrition
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Sources: 2014/15 Household Budget Survey; UNICEF; and IMF staff calculations.Mozambique: Proportion of Undernourished in Population
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Sources: Global Hunger Index; and IMF staff calculations.10. The rapidly increasing population, coupled with urbanization, exacerbate the impacts of climate change (Figure 11). Two out of three people live in coastal areas and are vulnerable to rapid-onset disasters such as cyclones, storms, and floods. In fact, the densely populated coastal lowlands are repeatedly affected by severe erosion, saltwater intrusion, loss of vital infrastructure and the spread of diseases vector borne diseases such as malaria, cholera and influenza. These risks are worsened by poor planning and uncoordinated high-risk settlements, many of which are relics of the civil war. The projected increase in rural-urban migration, coupled with the embedded socio-economic and special vulnerability, add significant disaster risks to the urban areas.
Mozambique: Urban and Rural Populations
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Source: World Bank Indicators.11. Lack of appropriate infrastructure adds to Mozambique’s vulnerability (Figure 12). Poor transport infrastructure limits its response capacity to extreme weather events. In this capacity, the current crumbling transport routes, unreliable electricity grids, and dilapidated buildings not only add to population’s vulnerability, but also delay crucial aid for those affected by disasters.
Mozambique: Availability and Development Level of Transport Infrastructure
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Source: World Risk Index 2016.12. A high share of agriculture in GDP also adds to climatic vulnerability (Figure 13). Studies have shown that for vulnerable countries reliant on rain-fed agriculture, yields could be reduced by 50 percent by 2020 (IPCC 2007). Agriculture accounts for 25% of the country’s GDP and 70% of employment. Small-scale subsistence farmers largely dominate the agriculture sector while 95% of food production is rain-fed. The projected reduction in cultivable area will also reduce prospects for subsistence farming and increase food vulnerability. At the same time, due to lack of alternatives, the poor engage in environmentally harmful subsistence practices, including slash-and-burn agriculture and the use of wood fuel.
Mozambique: Share of Agriculture and GDP per-capita, 2015
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Sources: World Development Indicators; and IMF staff calculations.13. Climate change would also deteriorate health indicators. Notwithstanding an already stretched healthcare system, still dealing with the legacy of HIV/AIDS, climate change is expected to lead to an increase in epidemics. Since the beginning of the 21st century, Mozambique has recorded a significant proportion of its population affected by HIV/ AIDS, roughly twice the sub-Saharan Africa average (Figure 14). The predominant and threating level of malaria incidence in Mozambique further increases vulnerability to climate change, as a significant percent of the population becomes more exposed to water and vector borne diseases. Access to safe water is a major problem during and following floods and droughts, leading to outbreaks of water-borne disease, such as diarrhea and cholera.
Mozambique: Prevalence of HIV, Total
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Source: World Bank Indicators.14. Spillover effects from neighboring countries also pose challenges (Figure 15). Mozambique is particularly vulnerable to change in water dynamics in neighboring countries, as it is situated downstream of nine major river systems that are already affected by climate variability. For example, in 2014 Mozambique was the country hardest hit by the floods resulting from the torrential rainfalls that emerged from southern eastern Africa. As a result, over 325.000 people were affected and 163 were killed. Weak infrastructure related to the drainage system and sanitation, magnify risks of flooding and the transmission of waterborne diseases. The sharing of river waters could also pose risks to electricity generation from hydro if there is increasing capture of water in countries upstream.
Mozambique: Incidence of Malaria
(Per 1,000 population at risk)
Citation: IMF Staff Country Reports 2018, 066; 10.5089/9781484345634.002.A005
Source: World Bank Indicators.E. Policy Response
15. Mozambique is committed to enhancing resilience to climate change and to strengthening capacity to respond to and mitigate natural disasters. Reducing vulnerabilities is one of the country’s top priorities defined in the Five-Year Government Plan 2015–2019. The revised legal framework5 strengthens the need for preventive measures and to integrating adaptation responses into development planning. Government long-term policy defined in the National Climate Change Strategy ENAMMC 2013–2025 and the recently approved Master Plan for Risk and Disaster Reduction for the period 2017–2030 provides a large set of measures to combat, adapt and mitigate climate change effects. To improve socio-economic infrastructure resilience, the government is preparing a Nacional Resilience Strategy, with detailed mapping of risk zones and building specification criteria.
16. However, public policies are hindered by weak historical data and poorly known country risk profile. A comprehensive database should be built and regularly updated to provide detailed data on natural disasters and their economic and social impacts. Partial data bases exist (EM-DAT, DesInventar) and other useful information is split in annual execution reports and post-disaster reconstruction plans. Better data collection and management systems combined with an improved methodology for valuing disaster economic impact would allow for a more accurate assessment of Mozambique’s risk profile. Once enough data is available, fiscal risks from climate change and natural disasters should be periodically assessed by the recently created Fiscal Risk Unit and publicly reported in the Fiscal Risk Statement.
17. Mozambique policy response focus on results and better alignment with regional and international efforts to climate change. The recently approved Framework for Disaster Risk Reduction defines a set of outcome and result indicators to which all relevant sectors are requested to contribute to through their policy plans and programs. These indicators could help measuring Mozambique performance in implementing both national strategies and regional and international commitments. The country supports the implementation of the African Strategy for Disasters Risk Reduction, including follow-up on Sendai framework, and the preparation of a regional strategy for managing natural disasters. Mozambique also adhered to the Paris Protocol for Climate Change, and the Sustainable Development Objectives.
18. Mozambique’s policy response also benefits from a dedicated institute to manage disasters and a robust inter-sector and decentralized system. The National Disaster Management Institute (INGC) has the mandate to reduce social and economic vulnerability to natural disasters and climate change induced events. This institute has 500 staff located at central, provincial and district levels and mobilizes over a thousand volunteers across the country. INGC Director chairs the Technical Council for Disaster Management which involves all director generals of relevant ministries, and reports to the Prime Minister and the Council of Ministers through the Coordinator Council. Given that the incidence of natural disasters seems to be rising, further capacity should be built at the INGC to better identify and manage disaster risk and to improve local response.
19. However, enough and timely financing remain a challenge to efficiently implement these policies. Annually Contingency Plans are supplied with insufficient budgetary resources and cover only emergency response operations. Donors usually finance four fifths of that plan, but financing for recovery and post-disaster reconstruction activities is mobilized ex-post, once disasters materialized and reconstruction plans are elaborated.6 This leads to financial uncertainty and substantial delays in reconstruction, exacerbating the impact on the affected population. Prevention and resilience are funded by sector budgets as part of their normal development agenda and activities.
20. Substantial and predictable financing for disaster management is needed. The recently created Disaster Management Fund could result in increased, more stable and better coordinated funding for disaster response, provided the government annually allocates the agreed 0.1 percent or more of the State Budget7 and donors supplement it with additional contributions. The budget for 2018 does not yet include an allocation for this fund, but maintains the allocation for the Contingency Plan which is half the minimum allocation for the fund (0.053 percent of total budget expenditure). It is expected that this funds become the main vehicle to pull financing for preparedness, response, recovery and post-disaster reconstruction activities, and also risk insurance.
21. Mozambique has not yet a disaster risk financing strategy to set clear policy for adequate financial protection. Realistic and well-balanced financial protection instruments should be defined, prioritized and operationalized to improving financial preparedness in the medium and long term. Risk transfer instruments, such as sovereign risk insurance, and contingent credit options which can be easily drawn down in the event of a disaster should be considered. The World Bank could assist the Ministry of Economy and Finance and the National Institute for Managing Disasters to develop this strategy.
F. Conclusion and Policy Recommendations
22. Mozambique is highly vulnerable to the impacts of climate change and natural disasters. Low-lying geographic location, coupled with weak socio-economic infrastructure further exacerbate the impacts of these risks. Adapting to climate change is already incurring significant economic and social costs, an additional strain on limited resources in Mozambique. These costs are expected to increase significantly, warranting a more coordinated approach to estimating long-term needs, developing sector specific contingency plans, coordinating various financing arrangements, strengthening coordination among stakeholders, enforcing better tracking of expenditures, and strengthening resource mobilization.
23. In this context, restoring macroeconomic stability is a prerequisite towards enhancing resilience to climate-induced events. This include (i) implementation of a fiscal adjustment to restore fiscal sustainability while containing public debt; (ii) normalization of monetary policy and (iii) strengthening governance and transparency, including by addressing the institutional weaknesses and corruption underlying the hidden loans, while advancing other structural reforms to generate growth and employment to reduce poverty and inequality.
24. Unless further actions are taken, climate change would significantly hinder economic development. To minimize the impact of climate change and natural disasters, the government needs to beef up risk-informed land use planning and develop sector-specific contingency plans. This entails developing a disaster risk financing and insurance strategy for the public sector as well as maximizing insurance penetration for the private sectors. In this capacity, strengthening insurance coverage, particularly of micro-finance, is essential to transferring risk associated with climate change. As insurance prices become inextricably linked with government policy on hazard mitigation, implementation and supervision of building codes, financial vulnerability reduces while prospects for investment and economic growth improve.
25. A policy mix focused on combining adaptation and mitigation strategies is thus needed. Such policies should not only be aligned with the country’s national disaster risk reduction plan, but also with housing, transport and land-use with a long-term vision of a sustainable future. Experience suggests that the best way to address climate change impact on the poor is by integrating adaptation responses into development planning. To the extent adaptation and mitigation measures are inadequate, cost-effective insurance policies and innovative financial instruments need to be further explored.
26. Scaling up investment in infrastructure and capacity building is imperative to enhancing resilience to extreme weather events. Sufficient infrastructure, coupled with better risk assessment and early warning systems, can not only prevent the often-catastrophic consequences of natural hazards such as flooding or storms, but it can also play a crucial role in the distribution of humanitarian aid supplies in the event of a disaster. More generally, it is also important to integrate climate change in the public investment programs to mitigate the risk of stranded assets. For instance, heavy reliance on hydro power can disrupt the supply of electricity during droughts or due to changes in water supply arising from climate change. The fact that Mozambique is located downstream creates greater risks as regard the availability of water during droughts, particularly if the demand is higher upstream, but also increases risks arising from heavy rainfall and floods, including damages to infrastructure.
27. A more gender-responsive approach to agriculture is essential to enhance resilience to climate change and decrease the risk of maladaptation. In this capacity, a renewed focus should be given to women’s representation in decision-making structures and to capacity building in agriculture as women predominate8 in this sector. Equally important is appropriate planning of land-use and the implementation of programs for diversification of subsistence crops and access to improved technologies, including agro-processing, in response to climate change. This, however, should go hand in hand with raising women’s awareness and training in best practices for climate change adaptation, such as the efficient processing of natural resources and the use of renewable energy.
28. Against its limited financing options and debt sustainability limits, Mozambique should create larger fiscal buffers for climate change adaptation and mitigation. There is a need to review the expenditure composition and focus more on addressing resilience to natural disasters, while protecting near-term priority social spending. Additional revenue should be mobilized to finance the infrastructure projects. Introducing a specific carbon tax could aid this effort. Innovative financial instruments should be further explored, including weather derivatives, debt swaps, and carbon markets. These instruments could allow the government to centralize and mainstream the climate financing needs related to both mitigation and adaptation.
29. Deepening the presence of private sector in the economy is pivotal to a sustainable climate change financing strategy. The implementation of the dedicated Contingency Fund recently created and better insurance coverage would increase financial buffers and mitigate damage costs associated with climate-induced disasters. Given its debt sustainability limits, Mozambique success in mobilizing required financing for mitigations and adaptation programs hinges upon seeking adaptation projects well-positioned for private investments. This entails addressing barriers to growth in key adaptation-related sectors requires establishing a value chain approach that links subsistence farmers and rural communities with other private sector entities and the broader market.
References
De Abreu, A., 2012, “National Adaptation and Mitigation Strategy,” Mozambique’s national climate change strategy, Maputo, Mozambique.
Ehrhart, C., and Twena, M., 2006, “Climate Change and Poverty in Mozambique,” CARE International Poverty-Climate Change Initiative, Maputo, Mozambique.
EM-DAT, 2017, “EM-DAT: International Disaster Database,” Centre for Research on the Epidemiology of Disasters (CRED), Université Catholique de Louvain, Brussels, Belgium. Available via the internet: www.emdat.be.
IPCC (Intergovernmental Panel on Climate Change), 2007, “Climate Change 2007: The Physical Science Basis,” Fourth Assessment Report of the IPCC, Working Group I. Geneva: IPCC.
Kwenda, S., 2010, “Mozambique: Women at Forefront of Resisting Climate Change,” Inter Press Service, Johannesburg, South Africa.
McSweeney, C., M. New, G. Lizcano, and X. Lu, 2010, “The UNDP Climate Change Country Profiles: improving the accessibility of observed and projected climate information for studies of climate change in developing countries: Mozambique Country Profile,” Bulletin of the American Meteorological Society, 91 157–166.
Steeg, J., Herrero, M., and Notenbaert, A, 2013, “Supporting the Vulnerable: Increasing Adaptive Capacities of Agropastoralists to Climate Change in West and Southern Africa Using a Transdisciplinary Research Approach,” International Livestock Research Institute, Nairobi, Kenya.
USAID, 2016, “Mozambique: Climate Vulnerability Profile,” USAID Agency Sustainability Plan and Agency Adapation Plan.
World Food Program, 2017 “Mozambique: WFP Country Brief,” Country profile, Maputo, Mozambique.
Government of Mozambique, 2014. Natural Disasters Management Law 15/2014.
Ministry of Environment, 2013. National Climate Change Strategy ENAMMC 2013–2025.
Council of Ministers, 2017. Disasters Management Director Plan 2017–2030.
INGC, 2017. Framework for Disaster Risk Reduction.
Council of Ministers, 2017. Disaster Management Fund Decree. 2018 State Budget [proposal].
Prepared by Mounir Bari, Leandro Medina, and Esther Palacio.
United Nations’ IPCC Assessment Report 2014.
Mozambique’s coastline, stretching 2700 km, is ranked the third longest in Africa (Sustainable Development in Mozambique 2000).
Sea levels are projected to rise between 0.18 m and 0.59 m by the 2090s compared to 1980–1999 sea levels (USAID 2016).
Natural Disasters Management Law 15/2014 and regulation.
Mozambique is highly dependent on donor contributions and external financing. Main partners are the United Nations, the World Bank, the African Development Bank, USAID, DFID, Denmark, Ireland, Sweden, China, Japan, and India.
Decree of creation of the Disaster Management Fund (2017).
About 73 percent (Kwenda 2017).