ADF supports economic reforms in Mozambique
In order to alleviate the Government’s budget constraints, which remains a major problem for the country, the Board of Directors of the African Development Fund (ADF) has approved on 1st December 2004 in Tunis, a loan amounting to 30 million Units of Account (US$ 50 million), to finance the second Programme of Economic Reform and Good Governance for the Reduction of Poverty. (PER-GROP II)
The PER-GROP II aims at assisting the Government in the implementation of its poverty reduction strategy in order to accelerate growth, further reduce poverty, and upgrade the sustainability of development with the objective of achieving the Millennium Development Goals (MDGs).
The loan will support the economic reforms with specific focus on:
- the deepening of macroeconomic policy measures, notably fiscal revenue mobilisation and expenditure control and appropriate pro-poor targeting, to sustain and reinforce the growth performance and correct for weaknesses in PARPA I implementation;
- the reinforcement of the organisational structures, notably the skills pool and the incentives framework in the civil service, in order to improve the effectiveness and efficiency of public spending and upgrade service delivery;
- the improvement of good governance, notably by modernising the legal and judicial framework to make contract enforcement and the commercial code user-friendly and cut the cost of doing business; accountability strengthening and combating corruption, especially in procurement, will equally be addressed.
In the overall, the proposed reform agenda will strengthen the country’s economy and improve the Government’s ability to reduce poverty through improved efficiency of expenditures in the public sector. Furthermore, the fostering of good governance will contribute to attract direct foreign investments flow into Mozambique.
ADB Group operations in Mozambique started in 1977. To date, the ADB Group has committed in the country more than US$ 1.2 billion for 84 operations.
- Name of Programme: Programme of Economic Reform and Good Governance for the Reduction of Poverty
- Borrower: Government of Mozambique
- Place of implementation: National territory
- Executing Agency: Ministry of Planning and Finance
- Sources of finance: ADF, IMF, IDA, Bilateral