The World Bank's Board of Directors today approved a US$60 million credit to the Government of Mozambique to support the implementation of its poverty reduction support strategy in 2004.
"The credit seeks to promote growth and employment creation, human resource development, good governance and progress towards achieving the Millennium Development Goals (MDGs)", explained John Zutt, the World Bank's Task Team Leader for the project.
Mozambique's First Poverty Reduction Support Credit (PRSC-1) will help build public sector capacity to maintain macroeconomic stability and strengthen public financial management. It will also improve the investment climate and expand infrastructure services and the delivery of good quality health, education and water supply.
It will finance priority actions aligned with the budget planning and execution process or the Performance Assessment Framework (PAF), adopted in April 2004. The PAF is in line with the Government's Action Plan for the Reduction of Absolute Poverty (PARPA, adopted in 2001), which describes the country's macroeconomic, structural, and social policies and programs to promote growth and reduce poverty.
The budget support will help the government continue to maintain a sound macroeconomic framework essential for achieving the economy's growth potential and to continue to implement its comprehensive reform program.
Through the PRSC-1 Program, the Bank is part of the Group of 14 Donors (G14) providing budget support against progress in implementing actions and indicators identified in the PAF and agreed with all development partners within the framework of the Joint Review of which the PRSC is a part.
"The four one-year PRSC operations will also address the constraints to the investment climate in Mozambique and provide support in priority sectors: health, agriculture, education, rural development, and water supply, among others", said Antonio Franco, the World Bank's co-Task Team Leader for the project.
Since the end of the civil war in Mozambique in 1992, the country has maintained an annual average economic growth of 8 percent. This has helped with its efforts to fight poverty, as demonstrated by the 15 percent points reduction in poverty: from 69 percent in 1997 to 54.5 percent in 2003.
Notwithstanding, Mozambique remains one of the poorest countries in the world, with a GNP per capita of $210 and 70 percent of the population still living in rural areas.
The credit is on standard International Development Association (IDA) terms, with a commitment fee of 0.5%, a service charge of 0.75%, and a maturity of 40 years, including a 10-year period of grace.
Fonte: AIM
