Facilitating Smallholder Farmers’ Market Access
In the OIC Member Countries
31
individuals’ rights are protected by courts and the police. The regulatory quality indicator
has to do with perceptions that the government can implement sound policies that
promote private sector development. Government effectiveness relates to perceptions
about the government’s ability to deliver public services and formulate and execute sound
policies. Fiduciary stewardship captures perceptions about the government’s ability to
control grand and petty corruption and to block efforts to use public position for private
gain.50
As the figure shows, Mozambique lags behind most of the 218 countries covered by the
Worldwide Governance Indicators. Rankings for voice and accountability and the rule of
law have seen some improvement, yet in 2012 the country’s ranking on government
effectiveness fell by over 10 percentage points compared to 2002. Mozambique also fared
less favorably on measures of regulatory quality and fiduciary stewardship in 2012.
The Cost of Doing Business study51 reports on a separate set of perceptions about the
strength of the institutions Mozambique has put in place to support the business
environment. The indicators are constructed from business surveys, focusing on business
regulations. Overall, Mozambique ranks 139th out of 189 countries covered by the surveys.
Mozambique ranks in the top half of surveyed countries with respect to starting a business
and protecting investors but scores poorly when it comes to perceptions about contract
enforcement and access to finance.
A recent study of the enabling environment for agribusinesses in Mozambique concludes
that the overall agribusiness policy environment is reasonably conducive to private sector
investment, yet much of that investment is made by foreign firms—domestic investors
face steep credit constraints.52 Government regulations and taxes are considered
excessive, and the legal and regulatory framework affecting agriculture is perceived as
somewhat inconsistent, opaque, and subject to interpretation by individual government
officials.
In Mozambique, food crops such as cassava and maize have received hardly any
government support or intervention, whereas other crops, such as cashews, have been
subject to heavy intervention. Policies such as the 18 percent tax on raw cashew exports
caused producers to receive a very modest share of the export price (39 percent from
2006 to 2009) and have limited their incentives to replant aging trees.53
Input policies have had little impact on smallholder farmers, because their use of inputs
such as fertilizer and improved seed is so low. In a recent survey, stakeholders maintained
that seed legislation and regulations were adequate to regulate the seed industry, but
public sector capacity to implement regulations was inadequate.54 Mozambique has
limited legal ability to protect plant breeders’ rights. Its public institutions have
50 Kaufmann, Kraay, and Mastruzzi (2009).
51 World Bank (2013b).
52 World Bank (2012a).
53 World Bank (2012a).
54 World Bank (2012a).