The money is mostly to be spent on water supply, sanitation and roads in four provinces north of the Zambezi river (Zambezia, Nampula, Cabo Delgado and Niassa).
The agreement was signed on the premises of the US State Department by Mozambique's Planning and Development Minister, Aiuba Cuereneia, and the MCC Chief Executive Office, John Danilovich. Witnessing the signing ceremony were Mozambican President Armando Guebuza and the US Deputy Secretary of State, John Negroponte.
Guebuza took the opportunity to praise his American counterpart, George W. Bush, "for his various initiatives in support of Africa" - including the Millennium Challenge Account (NCA), which the MCC administers, and the President's Emergency Plan for AIDS Relief (PEPFAR).
Guebuza said the MCA grant encourages the Mozambican government in its fight against poverty, since this large sum, applied in the north of the country could be of great significance in overcoming regional imbalances.
The President added that he felt "happy and proud that Mozambique has been included in this programme, because we know that if countries have qualified, it is because they have demonstrated their commitment to govern justly and to invest in their people to promote economic freedom". He was citing the pre-conditions laid down by the MCC for access to the funds.
Mozambique is the twelfth country to benefit from MCA finance, although 41 countries have been declared eligible.
Danilovich gave a breakdown of how the money will be spent. The largest component, accounting for 203.6 million dollars, is water and sanitation. The road component has been allotted 176.3 million dollars, while 39.1 million dollars will be spent on measures to improve land tenure services. A further 17.4 million dollars is earmarked for supporting farmers whose income depends on coconut palms, currently suffering from an epidemic of lethal yellowing disease. Infected trees will be destroyed and replaced, and farmers will be encouraged to diversify into other crops.
The rest of the money is for programme management, capacity building and technical assistance.
Danilovich said that by 2015, the MCC will have disbursed 3.5 billion dollars to support projects in the countries which have so far qualified. This is nowhere near the sums promised when the programme was announced. Funding of a billion dollars was promised for the 2004 financial year, rising to five billion dollars a year as from 2006.
Guebuza later told the Mozambican journalists accompanying his visit that the four provinces where the funding will be spent were chosen by the Mozambican government, and took into account that they were among the less developed regions of the country.
"The selection was made by our government", he said, "and we believe that the projects that will be carried out in these provinces, based on the MCC funding, will bring about many improvements, particularly with regard to water supply".
Choosing these four provinces, Guebuza added, was part of the government's policy to reduce the regional asymmetries which still prevail within Mozambique.
He estimated that about 5.7 million Mozambicans will benefit, in one way or another, from the infrastructures that will be built.
Asked whether United States companies will be involved in building the water supply systems or roads involved, Guebuza replied that this was "very likely" - particularly in light of the seminar with American businesses he had addressed on Thursday, stressing the possibilities for American investment in Mozambique.
As for his invitation to American oil companies to join the search for hydrocarbons, Guebuza said he was convinced that there was "something good" that remained to be discovered.
He could not say for sure that there was oil in Mozambique "because I am no expert". But the increased interest of foreign oil companies {notably in the Rovuma Basin in the north of the country} led him to believe that there must be encouraging signs. Even companies which had prospected briefly in the pasty and had found nothing were coming back for another look.
Currently companies from the US (Anadarko), Canada (Artumas), Italy (Eni), Malaysia (Petronas) and Norway (Norsk Hydro) are prospecting in the Rovuma Basin.
On Friday Guebuza also held meetings with the US Secretary of State, Condoleeza Rice, and the new President of the World Bank, Robert Zoellick.
Guebuza said that among the topics he had discussed with Rice was the crisis in Zimbabwe. She had expressed "understanding" for the position taken by the Southern African Development Community (SADC) at its recent summit in Tanzania (at which SADC had asked South African President Thabo Mbeki to mediate between the Zimbabwean government and the opposition).
SOURCE: AIM
