Development DFI Economy FA Finance Infrastructure Mozambique Social

World Bank announces US$117M to support Mozambique’s urban development

World Bank has approved a US$117M grant from the International Development Association, for the financing of Mozambique’s Urban Development and Decentralization Project.

The grant is in line with World Bank’s partnership framework approved in 2017, focused on tackling the country’s poverty and increasing the income of Mozambique’s lower-class population.

Institutional reforms through development and decentralisation policies are some of the strategies to be applied to that extent, as well as the institutional strengthening of municipalities and local entities in the public sector and financial management.

This decentralisation will enable for a more efficient implementation of infrastructure and basic local services, and also aims to help any municipality in Mozambique that have feasible initiatives to negotiate financing from the private sector, for projects geared towards infrastructure, urban development and services delivery. The timing of the project is providential; it will enable cities and municipalities of Mozambique to have a more robust response to the Covid-19 pandemic.

Also read: IMF, World Bank say Africa to get US$57B from official creditors in 2020

Mark Lundell, World Bank Country Director for Mozambique, commented: “I’m pleased we’ve reached this first milestone towards the project implementation. Urbanization, if managed correctly, can accelerate economic growth, poverty reduction, and structural change. Indeed, evidence shows that cities 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, greater incentives for economic diversification and innovation. “

“We believe that scaling up infrastructure and service delivery is key to harness 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.”

“Successful urban development hinges on the capacity of the authorities to enact policies that promote good governance and accountability. Equally important is the country’s fiscal arquitecture that allows municipality enough fiscal space and predictability of funds needed to meet their urban development needs,” concluded Nicoletta Feruglio, Senior Public Sector Specialist and the project’s co-task team leader.

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