Mozambique: Financial Sector Technical Assistance Project

Share |

Tunis, 4 October 2005 – The African Development Fund (ADF), has approved a grant of  6.80 million Units of Account  (UC*), equivalent to US$ 9.92 million to finance the  Mozambican Financial Sector Technical Assistance Project (FSTAP).

The overall objective of the project is to improve the soundness and efficiency, reach and depth of the Mozambican financial system so as to enhance its contribution to economic growth and poverty reduction.

It is expected to strengthen the banking sector, insurance industry, pension system, money and bond markets, legal and judicial environment for financial transactions, as well as support for anti-money laundering efforts.

This will be achieved by developing the institutional capacity of the financial sector, by strengthening the regulatory and supervisory frameworks for banks and non-bank financial institutions, including the insurance and pensions sector and developing a more robust payments system. The project will also improve the legal and judicial environment for lending operations; introduce sound debt management and expand financial services particularly in the rural areas by improving the operations of microfinance institutions.

The outputs of the project will include:

-  A significantly strengthened banking supervision regime;

-  An improved legal and judicial environment for commercial banks’ lending activities;

-  Better capacity on the part of the government for enforcing its anti-money laundering law;

-  A  strengthened regulatory and supervisory regime for the insurance industry and pension sector;

-  A modern and efficiently-administered social security system; improved capacity on the part of the Bank of Mozambique and ministry of finance for monetary, foreign exchange and public debt management;

-  Improved regulatory and supervisory regime for microfinance activities; and the completion of the divestiture of Government stakes in the banking sector.

Some of the direct beneficiaries include private sector enterprises, that will benefit from improved financial intermediation services and reduced interest rate spreads, the 163,000 active contributors to the National Institute for Social Security (INSS), who would enjoy better services under the national social security system, and the personnel of beneficiary agencies who would receive training and gain from other capacity building programs.

The estimated cost of the project is UA 17.91 million. The ADF grant represents about 37.97% of the costs. Five other development agencies and the Government of Mozambique will provide the remaining UA 11.11 million.

The Bank Group operations in Mozambique started in 1977. To date, the Group’s cumulative commitments in the country stand at UA 787 billion (about US$1.15 billion) in 85 operations.

Project Brief

Executing Agency: Ministry of Finance Praça da Marinha Popular Maputo, Mozambique Telephone 258 21 425071/9

Fax 258 21 310493

Procurement of Goods and Services:
The procurement of goods and services will be carried out in accordance with Bank Group’s Rules of Procurement. Consulting services will be procured through a shortlist of suitably qualified consulting firms/individual consultants. Goods will be procured through limited international competition.

Other Financiers: IDA/DfID/SIDA - UA 7.83 Million); GTZ/KfW – UA 2.51 Million; GoM - UA 0.77 Million

Project Starting Date: January 2006

Duration: 5 years

*1UA = US $ 1.45984 as at 01 /09/05

You are currently offline. Some pages or content may fail to load.