World Bank grants US$1.7 billion to fund private sector in Mozambique

Login

Register

http://www.clubofmozambique.com/

World Bank grants US$1.7 billion to fund private sector in Mozambique

9:49 CAT | 02 May 2017

The World Bank (WB) on Friday announced that it would provide around EUR 1.6 billion to fund the private sector in Mozambique between now and 2021.

“The indicative funding for this strategy is US$1.7 billion (EUR 1.6 billion) through the International Development Association (IDA),” it said in a note released on Friday, 28 April.

“IDA and the International Finance Corporation (IFC) – the private sector arm of the World Bank Group – will work side by side to stimulate and leverage the private sector, from key sectors such as agriculture (and its chain of value) and energy,” the document details.

About EUR 110 million is available during the current fiscal year, and from 2018 an indicative financial allocation through IDA in the order of EUR374 million per year is planned.

The Bank’s financing is part of the new Mozambique 2017-2021 strategy, approved on Thursday by the World Bank Group’s Board of Directors.

“This approval comes at a crucial time,” said Mark Lundell, World Bank Director for Mozambique, Madagascar, Mauritius, Seychelles and Comoros, quoted in the statement released today.

The World Bank believes that the country “needs to prepare for the next scenario of a resource-rich country and begin to develop a more diversified and productive economy”.

Such a scenario “will depend on how effectively natural wealth is reinvested in human, physical and institutional capital”, he added.

The country’s short-term outlook “is quite challenging as a result of recent disclosures about undeclared debt”, but the World Bank says it will help the country restore credibility and make public debt sustainable.

With regard to support for the State Budget, interrupted in the aftermath of the scandal, the recovery “will depend on Mozambique’s progress in restoring debt sustainability and an adequate budgetary and macroeconomic framework”.

Source: Lusa