Donor countries continue to believe in Mozambique despite corruption

3 October 2006

Maputo, Mozambique, 3 Oct – Donor nations have pledged a solid support for Mozambique’s state budget, although lack of progress in the implementation of an anti-corruption strategy by the Maputo authorities remains a concern.

Deputy-Finance Minister Pedro Couto said at a recent press conference some progress has been made in applying “some elements” of the strategy and that the government was strengthening the Criminal Investigation Police and the Anti-Corruption Unit of the Attorney General’s office.

Couto added that creation of, and respect for, new financial administrative procedures is a major step forwards in the fight against corruption, state news agency AIM reported.

However, while praising these new financial procedures, Jolke Oppewal, representing the group of 18 states that offer direct budget support, warned that both the government and its donors recognize the need to put an anti-corruption strategy into action.

“Corruption cases are currently not visible as there is no publication mentioning them,” noted Oppewal.

Mozambique benefits from one of the largest coordinated aid programs in Africa.

In the last round of negotiations with its principal donors the Mozambican government received aid pledges worth US$ 583 million for 2007.

The 18 donors supporting Maputo’s state budget include the World Bank and African Development Bank, together with the European Union and most of its member states.

Total foreign aid to the country, including assistance from the United States and Japan which is not channelled into budget support, totals US$ 1.2 billion, or nearly half the budget.

Donor nations have been generous to Mozambique, according to Oppewal, because they have been able to see the results of their investments.

Confidence of donors has also been fortified by Mozambique’s lasting peace after the 1992 ceasefire accord that brought 16 years of civil war to a close, a conflict that destroyed most of the country’s infrastructures.

Mozambique has made notable economic progress and its GDP grew by 7.7 percent in 2005, according to the Organization for Cooperation and Economic Development (OECD).

But most observers say more must be done to rescue large numbers of Mozambicans from absolute poverty, given that unemployment and poverty are still endemic despite economic expansion driven by major investment projects and large foreign aid donations.

Major projects such as the Mozal aluminium smelter, an investment of US$ 2 billion by Australian mining group BHP Billiton, have raised Mozambique’s profile as a destination for foreign investment.

Significant follow-on projects are a natural gas pipeline built by South African energy giant Sasol and a new US$ 450 million titanium mining project in Tete province.

But with 70 percent of Mozambique’s population living in rural areas these major projects are not sufficient to make any significant impact on poverty and joblessness outside of main cities. (macauhub).