AfDB Approves U.S.$ 93 Million Loan for Mozambique

23 October 2008
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African Development Bank (Abidjan)
press release

The African Development Bank (AfDB) Group has approved a budget support loan of 60 million Units of Account (UA*), equivalent to US$ 93.4 million, to finance Mozambique's second Poverty Reduction Support Programme (PRSL II) for three fiscal years ending December 2010.

The objective of the PRSL II is to enhance transparency and accountability in the use of public resources, both at the national and district levels. The programme aims at strengthening the capacity of the Supreme Audit Institution (Tribunal Administrativo) and the District Consultative Councils to effectively perform their roles as the districts will become the ultimate operational level of government. This requires building sustainable accountability mechanisms by strengthening institutions at both national and district levels.

It will help in covering the budget deficit and the maintenance of Mozambique's macroeconomic stability. The deepening of the reform program, especially in the areas of public financial management and decentralization is intended to directly benefit government accountability institutions such as the Supreme Audit Institution and Internal Control Units within ministries as well as the District Consultative Councils. Other beneficiaries will include the rural poor who will be empowered through their representation in the local councils. For a country that ranks 172nd out of 177 on the Human Development Index, improved resource flows would enable the government to fund basic needs for the population toward the attainment of the MDGs by 2015.

The program, supported by 18 other development agencies, is in line with the country's Poverty Reduction Strategy Paper, the Plan of Action for the Reduction of Absolute Poverty, the governance pillar of the Country Strategy Paper for the period 2006-2009 and the Bank's Governance Strategy for 2008-2012.

The Bank Group started operations in Mozambique in 1977. To date, the Bank's commutative commitment in the country stands US$ 1.7 billion for 71 operations. It has a current project portfolio of 24 operations with a total commitment of US$ 554 million.

*1 UA = US$ 1.55722 as at 22/10/2008

CONTACT : Yvan Cliche - Tel. : +216 71 10 23 87 - E-mail : y.cliche@afdb.org

Read the original article on African Development Bank (AfDB).

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