Challenges and Opportunities for Efficient Land Use in Mozambique: Taxes, Financing, and Infrastructure

Mozambique possesses high agricultural potential but remains a net food importer due to low productivity and high climate vulnerability. The report identifies four primary areas for improvement: simplifying bureaucratic tax administration to reduce investment costs, developing public financial incentives and public-private partnerships (PPPs) to mitigate risk for farmers, prioritizing critical infrastructure in energy and irrigation, and enhancing revenue-sharing mechanisms to protect natural resources. It highlights that administrative delays and high interest rates (often over 20%) are more significant barriers than tax rates themselves. The document also emphasizes the need for better community consultation in PPPs and the implementation of a more transparent fiscal rule for sharing extractive industry royalties with local communities.

• Administrative burdens and bureaucratic delays in tax and import-export processes are more detrimental to the agricultural sector than the actual tax and fee rates.
• Agricultural productivity is hindered by a lack of access to credit, with only 2.3% of small farms borrowing money as of the 2010 Agricultural Census, driven by high interest rates exceeding 20%, lack of collateral due to land non-transferability, and low financial literacy.
• The Value-Added Tax (VAT) system creates inefficiencies for exporters and capital investors because the refund process is slow and often denied on technicalities, effectively acting as a tax on production.
• Energy access in rural areas is severely limited, with less than 7% of the rural population having electricity, and private investment in renewables is discouraged by a 17% import tariff on components.
• Irrigation is critically underdeveloped, with less than 0.5% of currently used agricultural land being irrigated as of 2009, and development is heavily concentrated in Gaza province.
• Revenue-sharing from extractive industries is extremely low by international standards, with only 2.75% of royalties from natural gas and mining allocated to local communities.
• The legal requirement to return 20% of licensing fees from forestry and wildlife projects to local communities is weakly enforced, with significant funds failing to reach target communities due to mismanagement.
• Port operations in Mozambique, particularly in Beira and Maputo, suffer from significant time delays and high scanning fees that are charged regardless of whether a shipment is actually scanned.
• Public-Private Partnerships (PPPs) are used to support large agricultural projects but face challenges including high transaction costs, a requirement for public tenders for every deal, and risks of poor community consultation leading to local rejection.

APA

de Albuquerque, A., & Hobbs, A. (2016). Challenges and Opportunities for Efficient Land Use in Mozambique: Taxes, Financing, and Infrastructure. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2016/10/Challenges-and-Opportunities-for-Efficient-Land-Use-in-Mozambique.pdf

Chicago

de Albuquerque, Amanda, and Andrew Hobbs. Challenges and Opportunities for Efficient Land Use in Mozambique: Taxes, Financing, and Infrastructure. Climate Policy Initiative, 2016. https://www.climatepolicyinitiative.org/wp-content/uploads/2016/10/Challenges-and-Opportunities-for-Efficient-Land-Use-in-Mozambique.pdf.

Wikipedia

{{cite report |last1=de Albuquerque |first1=Amanda |last2=Hobbs |first2=Andrew |title=Challenges and Opportunities for Efficient Land Use in Mozambique: Taxes, Financing, and Infrastructure |publisher=Climate Policy Initiative |date=October 2016 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2016/10/Challenges-and-Opportunities-for-Efficient-Land-Use-in-Mozambique.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dealbuquerque2016challenges, author = {de Albuquerque, Amanda and Hobbs, Andrew}, title = {{Challenges and Opportunities for Efficient Land Use in Mozambique: Taxes, Financing, and Infrastructure}}, institution = {Climate Policy Initiative}, year = {2016}, month = oct, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2016/10/Challenges-and-Opportunities-for-Efficient-Land-Use-in-Mozambique.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }