Mozambique: Twelve donation agreements inked in H1

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Mozambique: Twelve donation agreements inked in H1

4:20 CAT | 28 Aug 2024

File photo: Lusa

The Arab Bank for Economic Development in Africa (BADEA) will lend US$20 million to Mozambique, and the government has signed 12 more donation agreements with the World Bank and the African Development Bank (AfDB).

According to data from the budget execution report for the period from January to June this year, to which Lusa had access today, “in line with the trend towards stabilisation of the external debt stock, during the second quarter the Government only contracted one loan agreement”, with BADEA, for the amount of US$20 million (€17.8 million), specifically to finance the “One District, One Hospital” initiative.

“In the meantime, seven donation agreements were signed with the World Bank, for a total amount of US$431 million [€385 million], and five with the AfDB, for the amount of US$134.9 million [€120.5 million],” the document reads.

In the case of the World Bank, the largest amount of funding is earmarked for the “Climate Resilient Roads in the North” project, with US$125 million (€116.7 million) and the program to revitalize district and community health services, with US$115 million (€102.7 million), in addition to the “Green Energy Corridors” project, with US$100 million (€89.4 million).

In the case of the AfDB, the largest share of funding is earmarked for PROCAVA – the Program for the Integrated and Resilient Development of Agro-Industrial Zones in Southern Mozambique, with US$51.48 million (€46 million), followed by the Songo-Matambo transmission line project, with US$39 million (€34.8 million).

The document adds that the total stock of central government debt “stood at 1,016,485,790,000 meticais [14,211 million euros]” by the end of June, “having registered an increase of 5% compared to the fourth quarter of 2023”.

“Despite the increase in the stock of public debt, external debt showed a reduction of 1% justified by the maturity and payment of instalments of existing debt in a context of strong containment in the contracting of new external financing. Internal debt increased by 17%, justified mainly by the issuance of new Treasury Bonds [of] 23,778 million Meticais [€332.5 million],” the report reads.

The document also highlights that “key actions” are underway in the area of public debt management, such as the “finalisation of the procedures manual, which will provide debt managers with practical guidance on debt management procedures, in accordance with international best practices”.

In addition, it adds, the process of migrating and validating the database used to record and manage public debt has already “been achieved in 95% for external debt, and the same process has been initiated for internal debt”.

Source: Lusa