The World Bank (WB) will disburse 300 million dollars (almost 302 million euros) in direct support to the Mozambican State Budget, under an agreement signed this Monday in Maputo, six years after the model was suspended by the partners international.
The amount, disbursed “in the form of a donation”, will be used to finance infrastructure projects, with the ambition of “invigorating the economy and improving the living conditions of Mozambicans”, explained the Minister of Economy and Finance, Max Tonela . , moments after signing in Maputo.
This is the first direct assistance from the World Bank to the Mozambican State Budget since the revelation of the so-called hidden debt scandal, in 2016, which led international partners to suspend direct financial assistance after the revelation of loans from public companies that they had not been communicated to parliament or international donors.
In addition to the infrastructure, continued Max Tonela, the the support will be applied to projects in the health, education and social protection sectorsas well as in areas related to access to energy and drinking water.
The agreement, the possibility of approval of which had been announced in May, is supported by the positive results in the field of reforms implemented by the Mozambican government to regain the trust of international partners, with emphasis on “maintaining a framework of macroeconomic policies,” said the World Bank representative in Mozambique.
“Given the high weight of Mozambique’s public debt, the World Bank’s financial support takes the form of grants. In this way, the financing does not increase the Mozambican public debt”, explained Idah Riddihough.
In May, the International Monetary Fund (IMF) also approved an agreement with Mozambique for an Expanded Financing Program (until 2025) worth 470 million dollars (472 million euros, at current exchange rates).
The World Bank and the IMF are among the various international partners that have suspended direct financial assistance to the State Budget, both having focused on one-off financial assistance in the context of specific disasters and emergency situations, such as the covid-19 pandemic. 19, cyclones Kenneth and Idai in 2019, or the humanitarian crisis caused by armed violence in Cabo Delgado.
The international partners suspended the aid as a result of the hidden debt scandal, which involved several leaders of the Executive then headed by Armando Guebuza and in which the current president, Filipe Nyusi, was Defense Minister, an area in which the companies operated public companies that contracted the hidden loans. .
Source: Observadora
