EU admits assessing, from next year, the resumption of direct support to Mozambique’s state budget

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EU admits assessing, from next year, the resumption of direct support to Mozambique’s state budget

2:04 CAT | 29 Jan 2020

Picture: Plataforma Interlusofona

The European Union (EU) will, from 2021, be in a position to assess the resumption of direct support to the State Budget of Mozambique, EU ambassador in Maputo, António Sánchez-Benedito Gaspar has said.

“From next year, we will be in a position to assess the return of budget support,” within the context of the 2021-2027 EU funding cycle, always provided that “conditions linked to transparency, management of public accounts and institution-building” in Mozambique are present, he said.

The diplomat said that it would also be important to see if negotiations with the IMF [International Monetary Fund] bore fruit, saying that he would like “to see the IMF more involved”, and to know that “other partners are on the same page”.

But the issue was not on the table right now, he added, because all current EU funds have been allocated. “We will be able to discuss it again from next year.”

Direct support to the Mozambican State Budget (OE) was suspended by international partners in 2016, after state debts of US$2.2 billion (about €2 billion) were disclosed – a matter now in the hands of both Mozambican and international judicial institutions.

But, “although the EU, like all other partners, suspended the budget support programme, our commitment to Mozambique has never diminished, and all of these funds are being implemented” through alternative actions, he said.

EU financial decisions for interventions related to Mozambique exceeded €250 million in 2019 and are expected to amount to around €125 million in 2020, he said. The total for the 2014-2020 period was around €734 million, to which various complementary programmes must be added.

In other words, EU support for Mozambique continues but the modalities have changed, away from direct funding to the government through the state budget.

Antonio Sánchez-Benedito Gaspar said that, weighing the pros and cons, resuming direct budget support could nonetheless be an efficient choice.

“For the EU, budget support continues to be a priority modality for developing partner countries, because we believe that it is an effective instrument, that it is well aligned with government policies and that it manages to produce more sustainable and durable results,” he stressed.

The diplomat pointed out that “the important thing about a budget support programme is to always support a reform programme and achieve results in that sense”.

The EU’s current objective was “to continue to work with the [Mozambican] government and partners” to create “the conditions allowing for, at some point, if that is the decision of the government and the EU, a return to the budget support scheme”.

To this end, Mozambique’s cooperation and development partners are setting up a new mechanism for dialogue with Mozammbique, led by the European Union (EU) and the United States of America (USA).

“We have been committed to creating a new cooperation and dialogue mechanism that we call the DCP – Development and Cooperation Partners, led by the EU and the USA,” with a double function. “On the one hand, coordination between partners and, on the other, even more importantly, dialogue with the government at different levels.”

Source: Lusa