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This country study has been undertaken under joint funding from CIDA, DFID and UNEP on behalf of the Poverty and Environment Partnership. It has been managed by the Overseas Development Institute. It forms part of a wider study which includes cases studies of Ghana, Mali and Tanzania and whose purpose is: first, to analyse and document experience in transferring environmental priorities from national plans to budgets, and through into government implementation plans; and second, to identify how development partners can facilitate and support such processes within the context of increasing budgetary support. The primary audience are government officials in the respective countries and their environment/natural resources counterparts in development agencies. A secondary audience are non-environment specialists involved in the design and management of budget support arrangements.

The study provides an assessment of whether existing policies, institutional structures and current financing levels in Mozambique are adequate to ensure proper environmental management. It devotes particular attention to the resource allocation process and how stated environmental policy priorities are translated or not into the national budget. The study also examines the direct and indirect contributions of development partners to environmental policy debate and implementation.

The study concludes that policy implementation is one of the main challenges to sound environmental management in Mozambique. The policy and legal framework is perceived to be of reasonable quality but its implementation has been constrained by a number of factors which pertain not only to the environment sector but also to wider public administration. The consequence has been limited operationalisation of environmental policies and legislation and poor performance of even basic functions, such as the reviewing and monitoring of environmental impact assessments.

The lack of clear policy prioritisation and transparency in budget accounting and reporting mechanisms are some of the general public administration constraints discussed. In addition to these, particular governance difficulties in the environment domain are analysed. The cross-sectoral character of environmental management constitutes a major challenge to implementation. Although this cross-sectoral dimension is understood and widely accepted at the conceptual level, the existing institutional framework has not been able to deal with it in an effective manner and the result has been limited incorporation of environmental considerations into resource allocation and development interventions at sector level. The influence of the National Council for Sustainable Development (CONDES) in sector policy debates remains largely unnoticed because of limited political leverage (vis-à-vis sectoral ministries) and technical competence (to engage in policy debates). Equally, the Ministry for the Coordination of Environmental Action (MICOA) suffers from similar political and technical capacity constraints and has largely failed to perform a coordination role. Environmental units present in various sectoral ministries have no institutionalised link with MICOA or CONDES.

These sector coordination difficulties are partly related to the strong compartmentalisation of public sector management, as reflected in the way the state budget is allocated and managed. But cross-sectoral coordination and harmonisation is also challenged by unresolved tensions between economic development objectives and environmental sustainability. Such tensions are particularly acute in a country where more than half of the population is poor and the pressure on natural resources exploitation is significant.

A set of recommendations is provided on how development partners can support addressing these problems. These recommendations emphasise the need to strengthen inter-sectoral dialogue on environmental issues not only within government but also within donor agencies. Such recommendations are directed to both the agencies (or sections of agencies) working directly on environmental issues as well as those working in sectors which are considered to be strategic for sustainable natural resource management – such as agriculture, fisheries, forestry, energy, mineral resources and tourism. Special emphasis is given to the opportunities General Budget Support is likely to offer to environmental mainstreaming, particularly in terms of managing environment policy dialogue across all relevant government agencies.