Mozambique: Local development fund will cover all districts, Chapo promises – AIM

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Mozambique: Local development fund will cover all districts, Chapo promises – AIM

7:18 CAT | 01 Apr 2025

Photo: AIM

Mozambican President Daniel Chapo declared on Saturday in Mogovolas district in the northern province of Nampula, that the Local Economic Development Fund (FDEL) will cover all districts in the country, in order to create more jobs and improve socio-economic conditions.

“We know there are many young people here in Mogovolas, who have their own businesses. But their businesses don’t grow because they have no money”, said Chapo. “When they go to the bank, a lot is demanded of them, and the money is very expensive because of the interest”.

“Many women are in business, and others want to be in business, but they can’t because they don’t have any money”, he said. “So as a government, we have decided to approve a local economic development fund, and this fund will reach all districts in Mozambique, including Mogovolas”.

Chapo admitted that the FDEL is an imitation of the district development fund (FDD), set up under one of his predecessors, Armando Guebuza, but “with some adaptations to avoid the mistakes of the past”.

With the FDEL, said Chapo, it is expected that young people, women and men, in all the country’s administrative posts, localities and villages, will have the money to grow their businesses.

“For all this to happen, we need to be at peace”, he continued. “Peace and security are important for our development, and that’s why we have come to Mogovolas to tell the population that we are working day and night for peace among Mozambicans, so that there are no Mozambicans threatening other Mozambicans”.

The FDD was set up over two decades ago by Armando Guebuza‘s government. It quickly became known as “the seven million”, because it took the form of distributing seven million meticais from the state budget to each of the country’s districts. (Seven million meticais is equivalent to about 109,000 US dollars at the current exchange rates, but was worth a great deal more a quarter of a century ago).

In each district, people with projects to raise food production, generate income and create jobs were invited to apply for loans from the FDD. The money was not a grant, but a loan to be repaid.

In reality, few recipients of the FDD ever repaid their loans, and there is little sign of any lasting effect from the Fund. In theory, FDD debtors could have been chased through the courts, but in practice none were.

There was no public audit of the FDD, and so the Mozambican public never found out how much of their money was lent and never repaid. Year after year, tens of millons of meticais were thrown at the FDD in the name of job creation and the fight against poverty.

Strong safeguards will be needed to ensure that the same sad fate does not overtake the FDEL, and that this time the beneficiaries repay their loans.

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Chapo also told the Mogovolas rally that the government will deal gradually with the concerns the local population had presented. In particular, the Ministry of Health will send a new ambulance to Mogovolas.

He added that the government is finding ways to pay the overtime owed to education and health workers, even though the country’s parliament, the Assembly of the Republic, has not yet passed the 2025 State Budget.

Source: AIM