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Abidjan, Cote d’Ivoire – The Board of Directors of the African Development Bank Group (AfDB) on Friday, 19 September 2014 approved a US$ 29.36 million budget support grant to finance the first phase of Mozambique’s Economic Governance and Inclusive Growth Program (EGIGP).
The EGIGP is the first of three consecutive programmatic general budget support operations covering fiscal years 2014, 2015, and 2016, with a total indicative financing envelope of US$59.73 million.
The program aims to promote inclusive and sustainable growth by Consolidating Transparent and Accountable Public Financial Management and Natural Resource Management Frameworks; and Improving the Enabling Environment for Private Sector Development in the country.
The EGIGP phases are therefore expected to deliver (i) improved efficiency and transparency in the management of public and natural resources (including improved governance and more effective spending in priority sectors), and (ii) expanded opportunities for business creation, growth, and employment.
The focus on inclusive growth is reflected in the EGIGP’s emphasis on demand-side governance, transparency and participatory natural resource management, and job creation in particular through micro-, small and medium enterprises (MSMEs).
The EGIGP is fully aligned with the Country Strategy Paper (CSP) 2011-2015 for Mozambique; the Bank’s Ten Year Strategy as well as its governance and gender strategies.
As the Bank’s sixth general budget support operation in Mozambique, the EGIGP responds to expressed needs of the government’s reform agenda laid down in its Poverty Reduction Action Plan (PARP, 2011-2014, recently extended to 2015); the Medium-Term Fiscal Framework (MTFF) 2014-2016 and its longer term private sector development strategies.
The EGIGP underscores the fact that Mozambique needs to translate the high economic growth rates experienced in the past two decades into inclusive and sustainable dividends.
Thus, reform-oriented public institutions such as the administrative tribunal; the general inspectorate of finance; private sector entities, in particular MSMEs (estimated at 4.5 million); will be direct beneficiaries of EGIGP in the form of increased access to finance and lower market entry barriers.
The Indirect beneficiaries include the entire public administration through greater public sector efficiency; and the entire Mozambican population (especially women, youth, and rural communities) through the promotion of inclusive growth, improved natural resource management and a friendlier business environment.