African Development Bank Acting Chief Economist wraps up 3-day mission to Mozambique in support of ...
Photo: O País
The World Bank could disburse, by June, 300 million US dollars in support for the Mozambican state budget.
The World Bank country director for Mozambique, Idah Pswarayi-Riddihough, announced the figure at a Maputo press conference on Wednesday, immediately after a meeting with the Mozambican Minister of Economy and Finance, Max Tonela.
She said the priority areas for World Bank investment would be health, education, energy and agriculture. The funding proposal will be presented to the World Bank board by June.
“We are talking about a first instalment of 300 million dollars, which we hope to take to our administration for approval by 30 June this year. Then we can consider other windows of financing for 2023 and 2024”, said Pswarayi-Riddihough.
The priority areas for those years, she added, would depend on the reforms undertaken by the government.
Unlike many of Mozambique’s other partners, the World Bank did not cut off financial assistance entirely after the scandal of Mozambique’s “hidden debts” became public knowledge in April 2016. World Bank aid continued, but in relatively small amounts, project by project.
Now the Bank seems prepared to return to the modality of direct budget support. Pswarayi-Riddihough said that the improvement in good governance supposedly recorded in recent years contributed to the resumption of World Bank support. She claimed that this was an important step for regaining the trust of the country’s partners.
Major work had been undertaken around questions of transparency and good governance, she alleged – but admitted that Mozambican civil society is continuing to demand greater advances in these areas.
Mozambique’s new programme with the International Monetary Fund (IMF), she added, could give “a strong signal to the market. Indeed, it will send a strong signal to all of Mozambique’s partners”.
The agreement between Mozambique and the IMF, approved by the IMF Executive Board on Monday, will make 456 million dollars available to the country. 91 million dollars will become available immediately.
At the time, Tonela said the agreement with the IMF marked the start of a new phase, leading to the resumption of sustainable growth of the Mozambican economy.