Maputo — The World Bank is to provide a loan of 25 million US dollars to finance projects to support the development and competitiveness of private business in Mozambique.

The loan agreement was signed in Maputo on Thursday between Planning and Development Minister Aiuba Cuereneia, and the World Bank's Regional Director, Michael Baxter.

Cuereneia said that the agreement, which will benefit small and medium companies, will be implemented through a unit set up for this purpose in the Ministry of Industry and Trade, in partnership with the Confederation of Business Associations (CTA), which is the body representing the Mozambican private sector.

He added that the project will help achieve the objectives of the government's Action Plan for the Reduction of Absolute Poverty (PARPA II), since, through job creation, the private sector has a key role to play in poverty alleviation.

Baxter said that the project will improve the business environment by reducing barriers to the start of business activities, lowering the costs of doing business, and ensuring access to credit for small and medium companies.

He said that the project will increase competitiveness in rural areas, by strengthening the linkages between farmers and markers, and by promoting the export of high value agricultural products.

CTA chairperson Salimo Abdula said that the support would help make the target companies more competitive faced with the challenges that face Mozambique on the regional and global markets.

"One of the priorities is to train the people who are in leadership positions in the productive sector, and the transformation of small and medium companies into more productive units", he stressed.