Mozambique: EU resumes budget support, with enhanced monitoring and transparency

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Mozambique: EU resumes budget support, with enhanced monitoring and transparency

3:55 CAT | 03 Nov 2020

Photo: Twitter / @SBeneditoEU

The European Union (EU) yesterday signed an agreement with the Mozambican government for €100 million in direct support to the State Budget. This type of support had been suspended since 2016 as a result of the ‘hidden debts’ scandal, but has now been resumed in response to Covid-19, but with differences.

“This is specific budget support, which is focused on the consequences of the socio-economic impacts of Covid-19,” EU ambassador in Maputo António Sánchez-Benedito Gaspar said.

Gaspar said the agreement signed yesterday includes “monitoring and transparency” clauses.

“We are happy to have agreed on this specific two-year program, in the amount of €100 million, which is accompanied by mechanisms for monitoring control, strengthening the transparency of public management,” he stressed.

Asked to comment on whether the aid represents a return to the direct State Budget support interrupted in 2016, Gaspar emphasised that it was quite different from the aid that the EU traditionally channelled to Mozambique.

“We in the EU continue to believe, first, in the measures and efforts being made by Mozambique [to promote transparency], and budget support remains, for us, as partners, one of the most effective modalities in achieving sustainable development goals,” he highlighted.

The two-year aid package was announced by an EU source to Lusa in May and will be channelled to the education sector, mainly for the creation of health security conditions in schools, and for social protection programmes for those most severely affected by the pandemic.

“It is not just any programme; it is an effective and urgent response programme to an exceptional situation created by the consequences of the Covid-19 pandemic in Mozambique,” he said.

Minister of Foreign Affairs and Cooperation of Mozambique, Verónica Macamo, welcomed the aid as a way of resuming direct support to the State Budget.

“The return of the European Union to the modality of direct support to the State Budget reflects the institution’s commitment to continue to align its programme with the government’s priorities,” Macamo said.

Cooperation based on direct support to the State Budget, she continued, was the most effective mechanism, since it produces faster, more tangible, solid and transparent impacts.

Mozambique had, by Monday, accumulated a total of 13,130 infections with the new coronavirus, with 10,439 recoveries and 94 Covid-19 deaths.

On March 23, the Mozambican government asked partners for a total of US$700 million (€595 million) to cover the deficit in the 2020 State Budget caused by the pandemic, as well as to finance the fight against the disease and provide support to the most disadvantaged.

According to official figures released in early October, at least US$458 million of the requested amount (about €389 million) had already been made available, of which about 70% was disbursed by the International Monetary Fund (IMF).

Source: Lusa