Supporting the Policy Environment for Economic Development
SPEED+

Land

This consultancy is focused specifically on land law as it impacts the development of land which requires significant investment for activities which are primarily commercial in nature. Most of the literature on the 1997 Land Law and its implementation is focused on its impact on customary land holders, with good reason. But the future of holdings which are to be commercially developed is equally important, and much less has been written in this area. An exception is a valuable 2005 World Bank report which focuses on commercial operations and investment, and is referenced frequently in this paper.

There is a consensus in Mozambique and among outside observers that investment in Mozambique’s commercial and tourist sectors is growing satisfactorily, but that investment in agriculture is lagging badly. As one interviews investors who would like to pursue agricultural projects, one hears a persistent refrain that there are bureaucratic and legal impediments to acquiring land and that, in part because of those impediments, they have difficulty obtaining credit. When one visits the commercial banks, one is told that credit is available – and this does seem to be the case -- but that there are two problems: 1) a lack of proposals that seem likely to be profitable, given the uncertain conditions under which agriculture in Mozambique operates, and 2) the fact that neither agricultural land itself, nor the land use right for such land, can under Mozambican law be readily used to secure loans. Those focusing on the latter factor, the inability to mortgage rights in agricultural land, ask whether it is not time for the 1997 Land Law to be amended, or for the regulatory framework (those rules which elaborate upon the law itself) to be modified, to alleviate this constraint on agricultural investment. A number of proposals are under discussion..

These papers deal with both non-agricultural and agricultural land. They devote substantially more space and consideration to agricultural land, however, because this is – as will be seen -- the more problematic area. It identifies certain legal problems, reviews remedial approaches suggested to date, and draws upon international experience to recommend steps forward

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