9 November 2012

Mozambique: Finland Reduces Aid to Mozambique

Maputo — Finland is to end its financial support for the Mozambican forestry sector because of "undue use of funds", according to the Finnish ambassador in Maputo, Kaariainen Matti, cited by the Portuguese news agency Lusa.

As from 2014, Finland will also reduce its direct support to the Mozambican state budget "due to disappointing results in poverty reduction and in governance", Matti added.

The Finnish government's decision was communicated last month to the Mozambican authorities by the Minister for International Development, Heidi Hautala, during an official visit she made to Mozambique.

"In the forestry sector, the bilateral project will be interrupted because undue use of funds was detected", Matti said. The exception is cooperation in forestry research, which will continue.

Currently Finland provides seven million euros (about 8.9 million US dollars) a year in direct budget support. As from 2014, Matti said, this sum will gradually be reduced to one million euros.

"Finland feels that diversion of funds may be of a systematic nature and is not necessarily restricted to the forestry sector", he said. "For a future decision, we are waiting for the results of the continual assessment of the budget".

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