WORLD BANK TO DISBURSE 1.2 BILLION US DOLLARS TO MOZAMBIQUE OVER NEXT THREE YEARS

MAPUTO, World Bank Africa Group Executive Director Andrew Ndaamunhu Bvumbe says the institution will grant 1.2 billion US dollars to Mozambique over the next three years.

He made the announcement at a media briefing here Monday on the first of his two-day visit to Mozambique. Bvumbe is expected to meet the Mozambican authorities to discuss commitments made and to agree on a new support framework for the next three years.

He explained that the sum seeks to support the development of sector programmes and comes within the three-year framework of the World Bank’s assistance to poor countries all over the world. The new package to Mozambique, said Bvumbe, came into effect on July 1.

Ndaamunhu will be received by President Filipe Nyusi, Prime Minister Carlos Agostinho do Rosario, Minister of Economy and Finance Adriano Maleiane, Minister of Agriculture and Food Security Jose Pacheco and officials of the Confederation of Trade Associations of Mozambique (CTA). The meetings aim to assess the stage of co-operation between Mozambique and the World Bank.

Bvumbe’s schedule also includes visits to development projects supported by the Bank, such as the Corrumana Dam in Moamba district, the Ressano Garcia Thermal Plant (CTRG) venture, a thermal power station in Ressano Garcia and the Maputo Reserve.

“We will discuss priority projects and agriculture is one of them. Mozambique needs to move from subsistence to mechanized farming. Climate change, energy, population growth, education, health and human development are other issues to be discussed during the visit,” he said.

Bvumbe said the financial sector would also be reviewed in view of the need to restore both investors’ confidence and a favourable macro-economic environment.

“Mozambique needs to implement projects to transform and diversify its economy. These include the mining sector, agriculture and solar energy. Therefore, we will identify priority areas with the private sector,” said Ndaamunhu.

Asked about direct State Budget support from the Bank, Bvumbe said it was still pending the results of on-going discussions between Mozambique and the International Monetary Fund (IMF) in connection with undeclared debts of the State.

The IMF suspended its programme with Mozambique in April 2016, when the full scale of the undeclared loans from the European banks Credit Suisse and VTB of Russia became apparent. While the 850 million dollar loan to Ematum was already in the public domain, since it took the form of a bond issue on the European market, the loans to Proindicus (622 million USD) and to MAM (535 million USD) were kept entirely secret.

All three loans had been guaranteed by the previous government under President Armando Guebuza. The over two billion USD lent to the three companies thus became part of Mozambique’s foreign debt, and pushed it beyond the limits of sustainability.

All other major western partners followed the IMF’s lead and suspended financial aid to Mozambique. In particular, the 14 donor nations which used to provide direct support to the Mozambican State budget suspended their disbursements. A basic condition for restoring normal relations was an independent audit of Ematum, Proindicus and MAM, which led to the hiring of the London branch of the forensic auditing company Kroll Associates.

Resumption of financial aid is pending the publication of the full audit report.

Source: NAM NEWS NETWORK