Mozambique nets US$10.5 million from World Bank to renew finance sector

5 December 2005

Maputo, Mozambique, 05 Dec – Mozambique is to receive US$10.5 million from the World Bank, in the form of a loan with preferential conditions, to reform the country’s finance sector, particularly private and public banking and government bodies, the World Bank said Monday.

The World Bank said that the Technical assistance Project for the Financial Sector would introduce a new international accounting system for commercial banks and companies in order to improve the transparency and financial efficiency of all the economic players.

Another objective is to increase the ability of the Bank of Mozambique to supervise and manage the banking sector and financial infrastructure.

The project also includes creating a central reserve of financial assets and reorganizing and strengthening the Public Debt department of Mozambique’s finance ministry.

According to the World bank the aim of the project is to, “improve the solidity and efficiency of the Mozambican financial system, so that it can fulfill its role of contributing to economic growth and reducing poverty.”

The loan is repayable over a 40-year period, including a 10-year grace period, and will cost the Mozambican government 1% of the total loan in expenses.

The program for reinforcing Mozambique’s financial system, which includes this project, is supported by the Africa Development Bank, the Department for International Development, the Swedish Association for International Development, German Technical Cooperation (DTZ) and the German Fund for Reconstruction (KFW).

The Mozambique economy is projected to grow by 7.7% this year, according to the latest International Monetary Fund (IMF) figures.

The IMF also forecasts that inflation will stand at 8% in 2005 against the 9.1% recorded in 2004. (macauhub)