China donates US$16 million to cash-strapped Mozambique

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China donates US$16 million to cash-strapped Mozambique

2:42 CAT | 05 May 2016

While the G14 donor group, the World Bank and the United Kingdom are suspending aid until undisclosed debts incurred under Mozambique’s Guebuza administration are clarified, China has sent a diametrically opposite signal by signing a technical and economic cooperation agreement worth about US$16 million for the purchase of 80 public transport buses, 200 boreholes and the construction of a China-Mozambique Cultural Centre in Maputo.

The agreement covers other social projects and a donation of 10 tons of food security cereal, according to Deputy Minister of Foreign Affairs and Cooperation Nyelete Mondlane.

President Xi Jinping of China has said that Mozambique’s transport sector in particular is a motor for improvement in people’s lives.

President Marcelo Rebelo de Sousa of Portugal, the country which currently chairs the G14, has meanwhile confirmed at a press conference on Wednesday that the group was suspending aid to Mozambique until all previously undisclosed debts are clarified. It is “a mere suspension”, he said. “It makes all the difference whether there is a permanent ‘No’ from the international community or a mere suspension for clarification purposes.”

Mozambique’s minister of economy and finance, Adriano Maleiane, told reporters that the suspension of direct support to the Mozambican state budget represents US$467 million, or 12 percent of annual expenditure.

According to Maleiane, if the suspension lasts, expenses such as travel and fuel will need to be cut and recruitment will be cut back, but education and health will be ring-fenced because of their impact on people’s lives, and because they receive comparatively little funding already.

Under an agreement signed between Canada and the United Nations Children’s Fund in Maputo on Wednesday, the Canadian government has undertaken to pay US$19.5 million dollars over five years in support of the Bureau of Civil Registration and Vital Statistics.

Source: A Verdade