Fabio Scala africa, Aid, Banking, Currency, Donors, Economy, Finance, Mozambique

Mozambique: World Bank endorses $1.7b strategy to enhance diversification

The World Bank and Mozambique have partnered in a new Country Partnership Framework (CPF) to promote diversified growth, invest in human capital and enhance sustainability reflecting the country’s five year program (Plano Quinquenal do Governo).

“The country needs to prepare for its upcoming resource-rich status and develop a more diversified and productive economy,” Mark Lundell, World Bank Country Director for Mozambique said.

This will depend on how effectively Mozambique reinvests natural wealth into human, physical and institutional capital.

The Bank’s focus will be on helping the country address the macroeconomic consequences of the undisclosed debt to restore confidence.

Its International Development Association (IDA) and the International Finance Corporation (IFC) will collaborate to stimulate and leverage Mozambique’s private sector including key sectors such as agriculture and its value chains; and energy.

IFC investments and advisory services in the financial sector provide integrated SME development solutions and access to finance.

The World Bank will also work with the International Monetary Fund (IMF) to provide Mozambique with advisory support on fiscal consolidation, debt management and other instruments.

It will also support the country’s efforts in addressing causes of conflicts such as land, forest and natural resources management.

The resumption of budget support operations, which were halted after the debt revelation, will depend on the country’s progress in restoring debt sustainability and an adequate fiscal and microeconomic framework.

Of the total $1.7 billion allocated for the strategy, $120 million is available this financial year. From 2018 onwards, $140 million every year is planned subject to the annual IDA performance-based allocation and overall resource availability.

The strategy was developed and validated following consultations with the private sector, development partners and civil society including national and international NGOs, academia and the media.

Source: Footprint to Africa