The World Bank (WB) announced a US$150 million donation from the International Development Association (IDA) in support of the first phase of Mozambique's Sustainable Rural Economy Program.

The decision made on Wednesday, 9, aims to help the country, under that 10-year program, address "some of the urgent challenges faced by small agricultural producers and fishermen, as well as small and medium-sized enterprises (MSMEs) in the sector."

The World Bank director for Mozambique, Madagascar, Comoros, Mauritius and Seychelles, Idah Z. Pswarayi-Riddihough, stresses in the note that "the rural environment is the basis for the livelihood of the majority of Mozambique's population and is where most of the country's neediest live.

The rapid growth of the rural population puts, according to Pswarayi-Riddihough, about 450,000 young people into the labor market each year, "which makes a focus on rural income growth an imperative to promote inclusive growth and prevent conflict."

The program aims to help farmers and small and medium-sized entrepreneurs improve their production and management and will also invest in extension services and resilient basic rural transport infrastructure.

The chief economist for agriculture and task team leader, Diego Arias Carballo emphasizes, for his part, that economic expansion in agriculture will have a greater impact on reducing poverty in Mozambique.

"However, the sector's potential continues to be challenged by low productivity, mainly due to i adoption of technologies, limited supply of agricultural services, along with high seasonality in production, and also, increased climate vulnerability," the note said.

The project will also have a special focus on rural women who "face numerous constraints in accessing essential productive resources, services, technology, market information, and financing," according to Franka Braun, senior specialist in Natural Resource Management and co-leader of the project team.