Maputo — The face of Mozambique's rural districts is changing, thanks to government interventions such as the allocation of district investment budgets, said Mozambican President Armando Guebuza on Wednesday.

Giving his annual State of the Nation address to the country's parliament, the Assembly of the Republic, Guebuza said the establishment in 2006 of the Local Initiative Investment Budget (OIIL), whereby at least seven million meticais (about 280,000 US dollars) a year has been allocated to each of the 128 districts, for projects to generate employment and increase food production, "has brought a new social and economic reality to the local and central authorities, and to the local communities".

"This is a reality that helps change the paradigms of rural development and induces changes in the attitudes of all", he claimed. The work done by the District Consultative Councils in prioritizing "in a logical and transparent way, which projects should be funded out of the many that are presented is a new exercise, not only for those who must decide but for those who are the beneficiaries".

Guebuza said that the debates inside a Consultative Council, to reach consensus on which projects should be supported, "transforms this body into a school in sustainable development".

Guebuza promised to continue with this investment fund, while "improving the management mechanisms, so that its impact grows in achieving the goals for which it was designed".

There was now further financial decentralization, Guebuza said, with a sum allocated to each district for the building, repair and maintenance of public infrastructures.

The computerized state financial management system, SISTAFE, was now being gradually expanded into the districts, the president said. 31 districts were now integrated into SISTAFE. At the same time commercial banks, previously almost completely absent from small towns and rural areas, were opening branches in the districts.

There were now 44 bank branches in districts said Guebuza - but this also means that there are still 84 districts that are not served by any commercial banks. But where the banks did exist, teachers, nurses, civil servants, and companies which sell goods and services to the state can be paid directly through the banking system, rather than in cash.

Guebuza stressed the importance of district administrators improving their leadership skills in order to encourage local people "to make the best possible use of local resources and to transform their problems into challenges".

The fight against "the obstacles to our development", which he listed as red tape, the spirit of apathy and drift, corruption and crime, "must remain at the centre of our governance agenda", including at district level, urged Guebuza.