The World Bank has signed an agreement with the government of Mozambique to formalize its resumption of direct budget support to the southeast African country after suspension for over six years.
Under the State Budget Financing Resumption Agreement, which was signed at a ceremony in Maputo on Monday, the World Bank will disburse 300 million U.S. dollars over the next three years to promote a sustainable economy in the country.
The funds disbursed by the multilateral organization in the form of a grant will be used for infrastructure projects to support the economy and improve the living conditions of the population, said Mozambique’s finance minister, Max Tonela.
This is the first funding to support the state budget that we hope for in the next three years,” Tonela added during the signing of the agreement in Maputo.
The World Bank’s country director for Mozambique, Idah Pswarayi-Riddihough, insisted that the funds allocated by his organisation should come “in support of structural reforms” and extend the efforts undertaken in recent years to strengthen accountability and transparency in the public sector.
The Mozambican Minister of Economy and Finance Max Tonela told the press following the ceremony that this amount will be applied to health, education, and social protection areas, and help improve people’s living conditions.
“The World Bank has been an important partner on funding projects that leverage the development of our country, and this agreement signed today is the first of several operations of direct budget support to the state,” said Tonela.
The minister said that government will continue working to implement reforms, broaden the tax base to ensure the sustainability of the public accounts, and provide more resources that will help expand the economy.
In 2016, the Mozambican government revealed that it had taken out loans of over two billion U.S. dollars for three security-related, fraudulent-like companies without informing the parliament and the international donors, leading to the aid suspension from most of the country’s donors, including the World Bank.
