AfDB and Partners Pledge to Provide Budget Support to Mozambique

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Maputo, Mozambique, 5 June 2009 - The African Development Bank (AfDB) Group joined 18 other donors last month in Maputo, where they made commitments to provide budget support to the Mozambican government for 2010.  

The AfDB recently disbursed its second UA 20 million (US$ 30 million) tranche in fulfillment of its 2009 pledge.  The funding is part of a UA 60 million (US$ 90 million) three-year second budget support loan (PRSL II), designed to enable the government to maintain macro-economic stability, improve governance through public sector reform, improve oversight, as well as support decentralization.
In line with the Accra action agenda on aid effectiveness and best practices of other development partners, the conditions for AfDB’s recent disbursement were, for the first time in Mozambique, fully aligned with the joint review process whereby the 19 budget support donors, Program Aid Partners, collectively assessed the performance of the government’s 40 benchmarked indicators.

“This reduction of conditionalities for disbursement is a clear indication of the AfDB’s commitment to harmonize its work processes with those of other development partners and improve the predictability of resource allocations,” says Alice Hamer, Resident Representative of the Mozambique Field Office.

The 2009 review, which was concluded in April in Maputo, deemed that there were sufficient and satisfactory bases to continue budget support given the government’s generally satisfactory performance over the last year. However, the review pressed for further progress in improving the business environment, implementing the government’s anti-corruption strategy and the need to allocate adequate resources to meet the needs of the most vulnerable people, particularly during the global economic and financial crisis.

The PRSL II was endorsed by both sides in November 2008, and the first disbursement was made shortly after. The AfDB has provided budget support to Mozambique since 2000 and strongly believes it is a key support instrument for the country’s development.

Emanuele Santi, the PRSL II Task Manager emphasized that “The budget support operation is part of a wider portfolio of projects in Mozambique to improve governance and public sector reform, which also include a US$ 3.5 million institutional support to Public Sector Reforms project and a Financial Sector Technical Assistance project of US$ 10.2 million.” 


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