The World Bank Board of Directors approved this loan on 25 January. The money, from the Bank's soft loans arm, the International Development Association (IDA), is part of the "Third Poverty Reduction Support Credit" (PRSC 3).
Funds from PRSC 3 will be delivered in three annual installments, between 2007 and 2009, and disbursement is conditional, according to a World Bank release on "the upfront completion of a number of specific reforms agreed upon by the government and the 18 external partners providing general budget support".
The loan agreement was signed by the Minister of Planning and Development, Aiuba Cuereneia, and the World Bank director for Mozambique, Michael Baxter.
Cuereneia said that this money, channelled directly to the state budget, will help the government achieve the main objectives established in its five year programme for the 2005- 2009 period - namely the reduction of levels of absolute poverty through the promotion of rapid, sustainable and wide-ranging economic growth.
The loan would help ensure economic and social development oriented particularly towards the countryside, and intended to reduce regional imbalances, and would contribute to the fight against crime and corruption.
"This funding", added Cuereneia, "will also support the achievement of the objectives set down in the government's Economic and Social Plan for 2007, which are a growth rate of seven per cent, improvement, both in quantity and quality, of basic services - health, education, water and sanitation, energy, roads and bridges - and to continue decentralising the state budget down to district level".
For the Minister, the disbursement of these funds showed the World Bank's recognition of the government's efforts to create conditions for the reduction of absolute poverty. It would also encourage other donors to continue financing Mozambique's development.
For his part, Baxter acknowledged that the Mozambican government has, in general, obtained "positive results" in poverty reduction and economic growth, which were the fruit of "responsible planning" by the government, and of coordination with its various partners.
"PARPA (the government's Action Plan for the Reduction of Absolute Poverty) has become the central document of these important achievements", said Baxter.
He added that the Bank's PRSC is now starting a new series of credits with the main purpose of supporting the implementation of PARPA over the coming three years.
Mozambique has been benefitting from this model of financing since 2004, when the first PRSC was approved, under which 60 million dollars were disbursed. PRSC 2 covered the 2005-06 financial years, and made a further 120 million dollars available.
SOURCE: AIM
