Mozambique: Increasing public finance for climate change requires more monitoring

In Mozambique, 2019 was marked by two cyclones severely hitting the country. The United Nations Development Programme estimates the yearly economic loss due to environmental degradation and the inefficient use of natural resources at 17 % of gross domestic product (GDP) (Poverty Environment Initiative). This specifically affects vulnerable groups that are directly dependent on natural resources (crops, fish, forest, etc.) for their livelihoods.

As Mozambique’s exposure to extreme climate events continues to increase, building resilience to climate shocks becomes ever-more critical. The impact of climate change is felt horizontally across the traditional sectors, such as agriculture, energy, transport, etc., which are usually organised through governmental action.

Integrating climate-change issues into public action therefore implies working through tools that are common to all sectors. In particular, this can be done in the planning, programming and budgeting processes that sectors perform on a yearly basis.

In Mozambique, since 2016, line ministries have been using a programmatic approach. Since then, mandated institutions at the sector level can apply a climate ‘marker’ to their budget lines. This allows them to highlight and track investments made towards achieving national climate goals, and reconciling the ambitions of the National Climate Change Adaptation and Mitigation Strategy, to be completed in 2025, with national and local instruments that create entry points for mainstreaming climate change adaptation into all policies, strategies and plans.

The government’s Five-Year Program (2020–2024) and the National Development Strategy (2015–2035) are the two key overarching plans for development. At the local level, 71 % of the country's districts have drawn up local adaptation plans and 34 % of municipalities have adopted Urban Resilience or Climate Change Adaptation Plans.

The country’s Nationally Determined Contribution (NDC) indicates its largest constraint on implementation is the lack of funding and the need for more resources for its mobilisation.

Another function of climate financial tracking involves relating the allocations initially made during budget preparation to the actual budget execution, as reported at the end of the yearly cycle. These can help to provide information on climate expenditure and the related efficiency of the various sectors.

However, to secure the real lessons learned, identify investment gaps at the sector level, and build more climate-relevant sector budgets in future exercises, this analysis should also be enhanced with Mozambique’s progress towards climate adaptation and mitigation. This is the role of the National System for Monitoring and Evaluation of Climate Change which has been in place since 2014. This still needs strengthening with the view to establishing results-based climate-sector budgets and consolidating the considerable past and ongoing efforts towards climate action.