18 November 2008
Maputo — The Mozambican government signed an agreement with the African Development Bank (ADB) in Maputo on Monday under which the ADB will grant 90 million US dollars during the period 2008-2010 for poverty reduction programmes.
The money is to be applied in the second phase of the government's Action Plan for the Reduction of Absolute Poverty (PARPA II), and will be provided in the shape of direct budget support.
The loan, approved by the ADB board, on 27 October, thus simply confirms the ADB pledge of 30 million dollars in budget support for 2009 made in May. This is the same as the sum pledged for 2008, and now the ADB has promised that budget support will remain at the same level in 2010 as well.
The ADB representative in Mozambique, Alice Hamer, who signed the document with Planning and Development Minister Aiuba Cuereneia, said that with this support, ADB is contributing to improve good governance and transparency in the management of public resources at national and district levels.
"This loan is part of the support ADB is granting to the Poverty Relief Strategy in Mozambique and should be seen in the context of other projects and programmes financed by ADB to the value of 620 million US dollars", said Hamer.
She added that the loan is the result of ADB's positive assessment of the Mozambican government's performance in implementing the first phase of PARPA.
"The ADB is confident that the government will perform even better in implementing PARPA II", she said.
For his part, Cuereneia said that this loan is a valuable contribution from the ADB in financing the government's Five Year Programme and PARPA II. He explained that this support is in line with the model of soft loans for poverty relief, with interest rates of between two and three per cent, and with the repayment starting after 20 years.
The ADB started operating in Mozambique in 1977 and has, so far, disbursed about 1.7 billion US dollars in 70 operations. There are currently 23 projects being financed by the institution, budgeted at the 620 million dollars mentioned by Hamer.
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