Maputo — The African Development Bank (ADB) has found that last year's drought and the increase in the international oil price are affecting the economic performance of Mozambique, but the government's efforts to counter these obstacles are very encouraging.

Addressing a press conference in Maputo on Tuesday, at the end of his visit to Mozambique, ADB President Donald Kaberuka said "the results of drought and the impact of the increase in the prices of fuel are extremely prejudicial to the country's economy".

He noted that his institution cannot solve alone everything, and advised Mozambique to work more with its other partners to help reduce the impact of these problems.

Kaberuka also pointed out that Mozambique still has "a long way to go" and the challenges are enormous, - but he believed that the country is on the right path, and during his four day visit he had gained a very good impression.

During his stay in Mozambique, Kaberuka held a meeting with the country's President, Armando Guebuza, to discuss ways to improve cooperation between the government and ADB.

He also met with Prime Minister Luisa Diogo, and with representatives of the private sector and of the international community.

"During the meetings with development partners we exchanged ideas on how to harmonise our actions in order for our support to be more effective", he said, describing as positive the performance of some of the projects he visited, which are benefitting from ADB support.

Kaberuka also praised the transparency in the use of funds granted by his institution, and he reiterated that ADB is prepared to increase its financial assistance and stimulate the contribution of the private sector to the country's development.

For his part, Deputy Finance Minister Pedro Couto said he expects ADB to continue its support for the government's efforts.

He recalled that the Bank has pledged aid of 240 million US dollars for the coming two years.

But Couto warned that the preparation of projects must be made more flexible in order to have access to those funds. An agreement was signed during Kaberuka's stay to allow part of that money to be used in direct support of the state budget.