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13392-PPCR-Mozambique-BDRP-Project-Document.Pdf AFRICAN DEVELOPMENT BANK GROUP Public Disclosure Authorized CLIMATE INVESTMENT FUNDS – PPCR BUSINESS DEVELOPMENT FOR RESILIENCE PROGRAM Public Disclosure Authorized Technical Assistance for the development of a Climate Resilience Policy and Strategy and; Drought Insurance products for the Arid and Semi-Arid Zones of Southern and central parts of Mozambique Public Disclosure Authorized Mozambique Public Disclosure Authorized February 2021 1. INTRODUCTION Mozambique is a tropical wet-dry to sub-tropical country with some semi-arid climate and is located in the eastern coastal zone of Southern Africa. The country's total population in 2020 is estimated at 31.3 Million people's with annual growth of 2.9% between 2015 and 2020(UNFPA,2020). Total land cover is estimated at 82,36 Mha of which respectively 45% is dry forest; 0.3% is mangroves, 37% is grassland and fallow;13.7% is cropland, 2% is wetland; 1.3% of other categories (rocks, sands, bare soils) and 0.1% of urban areas (Grinand et al., 2018). Land-use change is mainly driven depend on the region by changes in urbanization, climate variabilities, and observe deforestation with annual deforestation of 207 272 ha per year between 2000-2016 (Grinand et al., 2018). In 2019, the country GDP per capita yield 1328 PPP while 81.3% of the population live below the poverty threshold ($3.20 a day), Gini index yield 54 and human development index (HDI) 0.446 ranking Mozambique the 198th country in the world (UNDP,2019; World Bank,2019). Of the total GDP (2019 PPP), the agricultural sector accounts for 24.04% while the industrial sector(infrastructure, construction; electricity; mining and manufacturing) accounts for 23.59%, and services 43.17% (H. Plecher, J,2020). Despite the relatively low share of the agricultural sector(29% of total GDP) compared to services, it is an extremely important source of employment and livelihoods as it employed more than 80% of the labor force and more predominantly subsistence farmers. Of total cultivated land, 95% of the production is rain- fedrice, maize ( in Tete province), sorghum, and cassava (in Nampula province) the dominant crops, and covered over a third of the total cultivated land area while limited land is allocated to major cash crops such sugarcane (grown especially in the Maputo province), tobacco, and cotton, mostly cultivated and processed by large multinational or state companies(World Bank,2019). Irrigated farming is largely carried out along the river valleys in the Southern region. The sectoral investment in agricultural technologies is very low which constrains most farmers to cultivate on more fertile soils along river banks and flood plains with high-risk destruction harvests by floods given their low adaptive capacities( Government of Netherlands,2019) Indeed, agriculture a in Mozambique is extremes exposed to land degradation and frequent climate hazard especially severe droughts; devastating cyclones, and floods in central and southern provinces (MADER, 2019).,2019). In 2019, Mozambique was affected by two consecutive tropical cyclones (Idai in march 2019 and Kenneth in April 2019) and in February 2020 by severe floods in the districts of Buzi and Nhamatanda (Sofala Province) (Global Disaster Alert and Coordination System(GDACS,2019); International Federation of Red Cross (IFRC),2020). The two 2019 cyclones that hit the country has caused an estimated loss and damages of US$3 billion(World Bank,2019). Overall, consecutive shocks such as cyclones, floods & droughts, food insecurity and outbreaks (cholera, COVID-19), as well as conflict-related displacement have dragged 7.9 million people to a situation of deepened vulnerability in Sofala, Manica, Tete, and Zambezia( central provinces); in the northern provinces of Cabo Delgado and Maputo, Gaza and Inhambane an arid- semiarid provinces of the southern region where (IFRC,2020). The global index for risk management (INFORM) of 2021 very highly weight Mozambique (6.7) as the 10th most exposed country to natural and human hazard (6.4), very highly vulnerable (7.2) (socio-economic vulnerability and vulnerable groups) and very highly lack adaptive capacities (6.5) (institutional & infrastructure capacities). Majors occurs natural hazard in Mozambique are floods(high); tsunami(high); tropical cyclone(high); drought(high) and epidemic (very high) with food insecure people the most vulnerable groups (INFORM,2021). Perhaps knowledge on future trends reveals that the country will experience an increase in frequency and intensity of annual rainfall changes between -16 to +5% and of annual temperature between +1.0 to +5.0°C] (GERICS,2016; World Bank; 2017). The country integrated context analysis conducted in 2017 revealed that high food insecure risk regions are mainly located in arid and semi-arid provinces of central and southern part namely Tete (Kahora-Bassa & Changara district); Sofala(Malingue, caia, Cherigoma, Nhamantanda, and Chibabava district); Manica( Machaze and Guro district); Inhambane (Mabote, Inhassoro, Vilankulo, Masinga, Homoine, Inharrime and Zavala districts) 1 and Gaza (Mandlacaze, Chibuto, Chokwe and Massingir district)(World Food Program, 2018). This is a combination of recurrent droughts and floods, poor soil fertility, and low adoption of appropriate adaption technologies. - However, since 2000, the Government of Mozambique (GoM) in his effort of building national knowledge and capacities in identifying appropriate measures to strengthening the country's resilience and low carbon socio-economic development trajectory, has adopted several institutional policies frameworks and action plans at national and local level. This includes the National Adaptation Programmes of Action (NAPA)(MICOA,2008); National Climate Change Adaptation and Mitigation Strategy 2013–2025 (MITADER, 2012); Green Economy Action Plan(GoM, 2012); Climate Change and Gender Action Plan (MICOA,2014); National Climate Change Monitoring and Evaluation Framework (GoM,2014); Intended National Determined Contribution(NDC) (MITADER,2015); Master Plan for Risk and Disaster Reduction 2017–2030(GoM,2017); and its National Adaptation Plan Roadmap(GoM,2017); Strategic Plan for Development of Agrarian Sector (PEDSA 2010-2019) and associate investment plan(PNISA 2010-2019) and some pilots programs. Moreover, the GoM in addition to its five-year development plan (PQG 2020- 2025) is planning the development of a second generation of PEDSA II (2020-2025) and PNISA II (2020- 2025). The master plan for DRR is fully integrated in the country NAPs roadmap and PQG 2020-2025. It aims to reduce disaster risk, the loss of human lives, impact on livelihoods and critical infrastructures, as well as avoid the emergence of new disaster risks by increasing the resilience of people and infrastructure to climate and other natural and man-made hazards. This through mainstreaming disaster and climate resilience in public investments, territorial planning, and public financial management, while building capacity at all levels. Despite the progress made, identification and adoption of appropriated cost-effective climate resilience and low carbon technologies as well as private sector participation, remain key challenges facing Mozambique, to scale-up its long-term sustainability and poverty reduction goals especially in the arid and semi-arid regions. In addition, major gender gaps presented showcase the results chain related to gender within this activity. Therefore, the activities resulting from these objectives will contribute in reducing the gender gaps previously identified. For facilitating and making the assessments more accurate, gender indicators including sex-disaggregated and age-disaggregated indicators will be used to monitor, report and evaluate the specific expected gender results. AfDB has been providing over the years investments and technical support in these areas, including irrigation kits, multifunctional boreholes, tertiary roads, and capacity building through its flagship projects namely the SLWRMP, DRARP, and institutional support to the RBL.- The proposed TA,targets the arid and semi-arid regions, particularly in the southern regions of ozambique, and aims at foster the implementation of the Disaster Risk Reduction Management (DRRMin these regions by providing a specific policy framework and, an investment strategy and explore agriculture related productos, to strengthen the GoM capacities and the adaptive capacities and resilence of the communites, particularly women and youth, in the arid and semi-arid areas of the country. It is anticipated that the outocmes of the TA will incrase GoM institutions capacity to develop climate proof integrated development programs for the target areas in Mozambique. This CIF-PPCR technical Assistance (TA) grant will be used to develop a Climate Resilience Policy and Strategy for the Arid and Semi-Arid Zones of Mozambique and, to carry out a series of Climate Resilience Studies and Market Assessments to inform the development of Drought Insurance Financing Mechanisms. This TA is consistent with the SPCR objectives of Improving institutional frameworks for addressing climate change (with support from climate change development policy operation i.e. sector budget support); and Strengthen capacity for climate resilient planning at national, sector and local levels. 2 2. STRATEGIC THRUST AND RATIONALE 2.1 Strategic context The Government of Mozambique strives to enhance its climate change response framework. The climate change legal framework priority aims at increasing resilience
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