The Germany government has pledged more than US$50 million to support agribusiness development in Mozambique, targeting increased investment in mechanisation, productivity and agro-industrial growth.

The funding will be channelled through the “Innovative Fund for Agribusiness” programme, a financing mechanism designed to strengthen key productive sectors. The fund will be managed by the Zambezi Valley Development Agency, in collaboration with the Bank of Mozambique, according to an official government statement.

This latest commitment builds on an expanding economic partnership between Germany and Mozambique, particularly in agriculture. In 2025, both countries launched a similar initiative worth approximately US$53.3 million aimed at supporting agribusinesses and strengthening value chains in the Zambezi Valley.

The new funding comes at a critical time for Mozambique’s agricultural sector, which continues to face structural challenges compounded by climate-related shocks. Flooding during the 2025–2026 rainy season caused widespread damage to farmland, affecting thousands of farmers, disrupting production and placing pressure on food security and rural incomes.

To address these challenges, the programme will provide credit at subsidised interest rates, lowering borrowing costs and improving access to finance for farmers and agribusinesses. The initiative is expected to unlock new investment in farm mechanisation, boost production levels and support the expansion of agro-processing industries.

Beyond economic gains, the funding is also aimed at rebuilding agricultural capacity in climate-affected communities and strengthening resilience across rural areas. The intervention forms part of a broader climate adaptation strategy focused on enhancing the long-term sustainability and stability of Mozambique’s farming systems.