5 December 2017

Mozambique: PM Calls for Rational Management of Development Fund

Maputo — Mozambican Prime Minister Carlos Agostinho do Rosario on Monday demanded “transparent and rational management” of the government's National Sustainable Development Fund (FNDS), a body set up in February 2016 with the task of financing projects that guarantee sustainable, harmonious and inclusive development.

Rosario was speaking in Maputo at the ceremony where he swore Momede Abdulramane Nemane into office as the new chairperson of the FNDS Board of Directors. Nemane takes over from Augusta Charifo Maita who was appointed last month Permanent Secretary of the government of the central province of Sofala.

The Prime Minister urged Nemane “to ensure a greater dynamic in the implementation of projects, prioritising those which have the greatest impact on the life of the communities”.

Rosario also wanted to see the FNDS work as a revolving fund, “so that more beneficiaries might have the opportunity to make investments and improve their quality of life”. In other words, the FNDS makes loans which must be repaid, so that the money can be lent out again to other people whose projects have been approved.

But Mozambique's experience of this type of revolving fund has not been encouraging. The most notorious example is the District Development Fund (FDD), set up by the then President. Armando Guebuza, in 2006. Initially the FDD distributed seven million meticais (about 117,000 US dollars at today's exchange rates, but worth much more in 2006) to every district in the country. Within the district, the money was to be lent to people who proposed viable projects that could create jobs or boost food production. When they repaid the loans, the money would be lent out to other beneficiaries.

Over ten years after the FDD was launched, the great majority of the money has never been repaid, but nobody has ever been taken to court and forced to pay up.

Rosario told Nemane that he will only be successful “if you promote a team spirit and adopt a proactive attitude, oriented toward solving the concrete problems of citizens”.

He urged Nemane “to rationalise public expenditure, re-orienting resources to activities that have the greatest economic and social impact”, and “to implement strictly the norms and procedures for managing public accounts”.

For his part, Nemane stressed that he is committed to fighting against environmental crimes and against economic and social inequalities. He pledged to work to ensure a return on the projects the FNDs invests in.

The FNDS, which is supervised by the Ministry of Land, Environment and Rural Development, began life in 2016 with 200 million dollars to invest in viable development projects. Nemane said that, during the three years of his term of office, he hoped to raise a further 300 million dollars for the fund.

Prior to this appointment, Nemane was coordinator of the project REDD+ (Reduction of Emissions from Deforestation and Forest Degradation), financed by the World Bank.

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