Mozambique: Deputies Demand Repayment of FDD Loans

The parliamentary commission on agriculture, the economy, and the environment on Monday called on the Nampula provincial government to design effective strategies to improve the repayment levels for the loans made under the District Development Fund (FDD).

The FDD is still commonly known as “the seven million”, because it began life in 2006 as an allocation of seven million meticais (about 103,000 US dollars, at current exchange rates) from the central budget to each of the country’s 128 districts. The money was to be lent to people with viable projects that would generate income, produce food and create jobs.

The idea was that the FDD should be a revolving fund. As the money was repaid, it would be lent out again to new beneficiaries. Instead, it has turned into a drain on the budget since, throughout the country, the repayment rates have been extremely low.

According to commission member Faruque Osmane, “it is necessary to study new ways of financing projects and new effective methodologies to increase the return of funds to the government”.

The demand was made moments after the Nampula provincial government had reported that the reimbursement levels had risen last year.

The provincial director of agriculture and food security, Pedro Dzucule, told the parliamentarians that, in 2015, the repayment rate of FDD loans was about five per cent which came to 5.7 million meticais. He added that, in total since the start of the FDD, 1.89 billion meticais had been lent under the scheme, whilst just over 86 million meticais was repaid.

The parliamentary commission also recommended that the provincial government, through its provincial directorate of trade and industry, monitor the trade in agricultural produce due to the current high market prices. Maize, which is the main source of food for the majority of the population in the north of the country, is selling at twenty meticais per kilogram compared with just five meticais last year.

According to the deputy head of the commission, Jaime Neto, this price directly or indirectly forces the population to sell its entire surplus. Therefore, the authorities should take steps to stop people selling all of their stocks to avoid pockets of hunger. He added that Nampula had produced plenty of food this year.

The meeting took place as part of the parliamentary commission’s working visit to the province which began on Saturday.

Source: Agencia de Informacao de Mocambique.