A ‘MOZAMBICAN ECONOMIC PARADIGM’? A CRITICAL REVIEW OF THE ‘7 MILLION’ INITIATIVE

[Image credit: author's photo; beneficiaries of the fund that were victims of irregularities. The mill was broken at the time and they could not afford repairs.]

Roberta Holanda Maschietto has a PhD in Peace Studies from the University of Bradford and is currently a post-doctoral researcher at the Centre for Social Studies, University of Coimbra. Her research interests include the concept of empowerment and its operationalisation, in particular in peacebuilding contexts, as well as local subjectivities of peace and power.

In 2006 the government of Mozambique introduced for the first time a budget to be allocated to each one of the 128 districts in the country. At the time, the budget had a fixed value of seven million meticais (circa USD300,000), and was called the Local Initiative Investment Budget (Orçamento de Investimento de Iniciativa Local, OIIL), being popularised as the ‘7 Million’. In 2009, the budget was transformed into a fund, the District Development Fund, retaining nevertheless its popular name and core functions.

In a nutshell, the ‘7 Million’ resembles a micro-credit scheme. The fund that enters the district is supposed to be used in the form of credit concession to the poor strata of those economically. Its central objectives are job creation and food production in the districts. The ‘7 Million’ has furthermore a strong empowering appeal: not only does it aim to promote empowerment by investing in local producers who would otherwise not have access to credit, but it also works in connection with the local councils, who have an active role in deciding who will obtain the funding taking into consideration the local needs.

Beneficiaries of the fund: originally, they wanted to invest in wholesale but they changed to redirect the money to the shop they already had.
Beneficiaries of the fund: originally, they wanted to invest in wholesale but they changed to redirect the money to the shop they already had.

The local councils were formalised in 2005 and defined as ‘an organ of consultancy of the local administration authorities’. They should be constituted by prominent people in the communities, such as ‘community authorities, representatives of interests groups of economic, social and cultural nature’ in each territorial rank of the district (1). Whilst having a consultative status, when it comes to the ‘7 Million’ they are the ones entitled to select the projects that will obtain the credit, as they are deemed to know better the needs of the community. Therefore, their inclusion in the process is what guarantees that the process is ‘bottom-up’ and representative of local interests.

In practice, the ‘7 million’ became one of the main political banners of President Guebuza, who referred to it as the ‘Mozambican economic paradigm’ (2). In his speeches, he portrayed the ‘7 million’ as nearly a panacea thanks to which local development has taken place, food production has increased, local communities have been integrated with the national market, jobs have been created, and poverty has been reduced (3). The initiative has even been praised by the African Peer Review Mechanism and portrayed as an example to be followed by other African countries (4). An in depth analysis of the district of Angoche, located in the northern province of Nampula, however, casts doubts about such a successful propaganda.

Focus group with some in the community
Focus group with women in the community

First, the understanding that the local councils are ‘representative of the local communities’ is very problematic. In 2011 there was a big process of reconstitution of the local councils. In Angoche, the process was followed by the district’s technical commission, who was in charge of guaranteeing its transparency and inclusiveness. In practice, many people in the communities admitted not taking part of the selection process — some did not even know about it. Many who did take part, including chosen members of the councils further referred to a ‘pre-selection’ phase where the ‘eligible people’ to the councils — to be voted by the people — were previously selected by a local traditional authority (usually the régulo), contrary to what should have taken place. Furthermore, in some cases, there were reports that members of the opposition ‘refused to take part’ of the selection process. In one case, a member of the technical team admitted they had to re-schedule a new selection process in one of the localities precisely because of the issue of inclusiveness. However, in other cases where reports of bias were reported, nothing was done to correct the process or verify it further.

Besides the problems related to the selection process, many participants in the communities observed that their interaction with the members of the local councils was very weak, or simply did not take place. This was particularly so in the case of women. Some individuals also manifested a feeling of ‘separateness’, as the local councils were portrayed as linked ‘with the structure’, instead of a body that represents the community.

When the ‘7 Million’ was considered, these critical perceptions were often magnified, as many beneficiaries — and people who had attempted unsuccessfully to obtain the fund — reported acts of bribery involving members of the local councils, as well as local authorities. There were also reports of political discrimination, exchange of values and projects inside the council, and, before 2009 — when the fund was disbursed in goods — overpriced products.

Focus group with some in the community
Mixed focus group with the community

Contrary to the positive numbers available in the administration, many of the projects funded by the ‘7 Million’ were found to be ineffective, incomplete, sometimes completely different from the original, and at times also failed. One of the reasons for this was the fact that more often than not beneficiaries obtained a much smaller loan than the one requested. According to members of the local councils, this happened because the fund available is not that big once it is split across the district’s sub-units, and they feel that it is preferable to chose more projects with a small amount (be inclusive) than select few projects with a big amount — even though the latter would be the only way for a project to generate jobs.

Ultimately, the limited success of the ‘7 Million’ is reflected in the very low return rate, which in Angoche, between 2007-2013, stayed at only 4.5%. Yet, the official discourse tends to minimise this issue, noticing that many projects take time (2-3 years) to generate profit. At the same time, the problematic estimates of jobs created are widely publicised, even when there is not long-term and continuous checking if those jobs planned in the project still exist.

It could be argued that Angoche is a very specific case where things did not go so well. Yet, data obtained from the districts of Mogovolas and Moma showed similar problems. Monitoring reports from Center of Democracy and Development Studies (CEDE) regarding other districts also noted the problem of the projects’ sustainability. Finally, one of the rare in depth studies on the matter in the districts of Gorongosa, Monapo and Zavala also cast away any reason for optimism regarding the results of the ‘7 Million’ (5).

The fact that these problems are minimised in the discourse is nothing out of ordinary, as much as politics is concerned. What is worrying is the fact that very little has been done to address these problems. One of the major constraints, in this regard, is the lack of resources to invest in regular monitoring visits and capacity building of all actors engaged in the implementation of the ‘7 Million’. Also, so far there is no proper mechanism for complaint, redress and accountability, which indirectly stimulates the situation to continue as it is. Ultimately, part of the propaganda of the ‘7 Million’ is related to the agenda of decentralisation in Mozambique — giving power to the districts and empowering the local councils. Yet, if these problems are not addressed, they may simply contribute to enhance and further legitimate centralising tendencies at the local level, while disguising them as part of the decentralisation process.

References:

1. Republic of Mozambique. Council of Ministers (2005) Decree No. 11/2005, Regulação da Lei dos Órgãos Locais de Estado (RELOLE). Boletim da República, I Série, No. 23, 2nd Supplemento. Maputo, 10 June.

2. AIM (26 Sep. 2013) Universidade de Columbia: PR Guebuza profere palestra sobre o desenvolvimento rural de Moçambique. [Online] Available at: http://www.minec.gov.mz/index.php?option=com_contentandtask=viewandid=700andItemid=140 (Accessed: 2 June 2014).

3. Guebuza, A. E. (2009) O Combate contra a Pobreza: Concentrando nossas Ações no Distrito. State of the Nation. Maputo, 22 June; Guebuza, A. E. (2009) Os Sete Milhões – Seu Papel na Promoção da Boa Governação e do Desenvolvimento Endógeno. Guebuza’s blog. Available at: http://armandoguebuza.blogspot.pt/2009/10/os-sete-milhoes-seu-papel-na-promoc.html (Accessed: 15 May 2014).

4. AIM (30 Jan. 2014) MARP considera fundo dos “sete milhões” um exemplo para África. [Online] Available at: http://www.portaldogoverno.gov.mz/noticias/news_folder_politica/janeiro-de-2014/marp-considera-fundo-dos-201csete-milhoes201d-um-exemplo-para-africa (Accessed: 23 June 2014).

5. Orre, A. & Forquilha, S.C. 2012. ‘Uma iniciativa condenada ao fracasso. o fundo distrital dos 7 milhões e suas consequências para a governação em Moçambique’, in B. Weimer, org. Moçambique: descentralizar o centralismo. economia política, recursos e resultados. Maputo: IESE, 168-196.

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2 thoughts on “A ‘MOZAMBICAN ECONOMIC PARADIGM’? A CRITICAL REVIEW OF THE ‘7 MILLION’ INITIATIVE”

    1. Thank you for the comment. I personally think the project was over ambitious. The resources (financial and human) needed to make it work are huge. A smaller project could be more effective, but then it would not have the same appeal… I guess it’s the same with many policies out there!

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