Donors confirm financing of US$583 million in budgetary aid for Mozambique

15 September 2006

Maputo, Mozambique, 15 Sept – Mozambique’s Program Aid Partners (PAPM), which directly support the country’s state budget, confirmed Thursday that they would grant US$583 million to assist several development programs in 2007.

The Mozambican government and the group of 18 partner countries (G-18) Thursday closed another cycle of revision of their partnership, begun in mid August, on the program for assisting the state budget.

A memorandum of understanding said that the G-18 would provide US$370 million in direct budgetary aid and sector aid to the value of US$213 million.

The group, which, amongst others, includes the World Bank, the African Development Bank, the European Union, Portugal and the United States, is expected to continue with its support until 2009.

The partners justify the continuation of the aid by pointing to the “positive” economic growth posted by Mozambique, particularly in the last half.

Economic indicators pointed to growth of around 10 percent, with particular emphasis on the agricultural sector, which saw an increment of 10.9 percent.

In the first six months of 2006, Mozambique posted an accumulated inflation rate of around 2.6 percent.

Given the current economic growth rate, Remelzwaal said that it was “possible” that the Mozambican government could reduce absolute poverty to 45 percent by 2009, as indicated by the Action Plan for Reducing Poverty (PARPA).

“The PARPA is a realistic plan, with targets that can be met, step by step. What counts are the concrete steps taken on the ground. Reducing poverty by 45 percent by 2009 is possible, if we join forces,” he said. (macauhub)