Intelligent news from Mozambique

Mozambique invites investors to fund irrigation projects

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Mozambique’s Minister of Agriculture and Food Security last week invited international investors to put a total of $2.5 billion into irrigation projects in five river basins throughout the country, serving 150,000 hectares of productive land.

Minister Jose Pacheco positioned the projects as part of the government’s effort to make Mozambique a net exporter of food by 2050, leveraging what he called the country’s “comparative advantage” in arable land availability. The projects would expand and modernize irrigation around the Maputo, Limpopo, Buzi, Zambezi, and Lurio rivers.

Project area Hectares served Investment cost Rate of return Investment cost/hectare
Lurio River Basin 30,000 $631,800,000 10.19% $21,060
Zambezi River Basin 75,000 $1,053,000,000 9% $14,040
Buzi River Basin 15,000 $421,200,000 10.47% $28,080
Limpopo River Basin 15,000 $210,600,000 10.12% $14,040
Maputo River Basin 15,000 $210,600,000 10.12% $14,040
Totals 150,000 $2,527,200,000


Zitamar View: $2.5 billion is an ambitious funding target, and it puts the projects on the more expensive end of the spectrum for large scale irrigation investments. Capital costs for the proposed irrigation projects range from $14,040 to $28,080 per hectare, while a 2016 World Bank study of similar projects put the “medium” capital cost for such projects at $12,000 per hectare. Whether foreign investors and donors will take on the cost in exchange for promised returns of roughly 10% will be a measure of whether, as President Nyusi declared last week, Mozambique is actually “back.”

© 2017, Zitamar Ltd. Reproduction and dissemination prohibited without written permission.

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