Maputo — The World Bank on Saturday approved a grant of 117 million US dollars to support the Mozambican government's urban development and decentralisation project.
A World Bank press release states that this financing "seeks to harness the benefits of urbanization in participating municipalities across the country by improving urban infrastructure and service delivery as well as by supporting institutional reforms".
The World Bank country director, Mark Lundell, said "Urbanization, if managed correctly, can accelerate economic growth, poverty reduction, and structural change."
Cities, the Bank argues, "can be instrumental in bringing basic infrastructure and services to a larger population and to businesses at a lower unit cost. This in turn can lead to faster poverty reduction, higher productivity, and greater incentives for economic diversification and innovation".
"We believe that scaling up infrastructure and service delivery is key to harnessing urbanization for poverty reduction and inclusive growth," added Andre Herzog, Senior Urban Specialist and the Bank's co-task team leader for the project. "To that effect, the bulk of the project's funds will finance Municipal Performance Grants to all the 22 municipalities in Gaza, Zambezia, Sofala and Niassa Provinces".
The release adds that the project will also help any Mozambican municipality that has feasible initiatives to leverage private sector finance in urban infrastructure and services delivery.
The project, the release says, "will support the overall leadership for the decentralization reform process, and institutional strengthening of local entities in public sector and financial management. The intended impact is to strengthen the capacity of central government entities to steer the decentralization reform and improve the institutional capacity of decentralised entities in the provision of infrastructure and basic local services".
The grant comes from the International Development Association (IDA), the part of the World Bank group that provides soft loans and grants intended to boost economic growth and reduce poverty in the world's poorest countries.