Mozambique’s Minister of Economy and Finance, Max Tonela, yesterday expressed his expectation of the resumption of direct support to the State Budget by the African Development Bank (AfDB) in 2023, in view of the two parties’ commitment to deepening cooperation.
At the level of the Mozambican executive, there are “expectations of having AfDB finance for the State Budget again, from 2023”, ending the suspension of this type of aid after the disclosure of the so-called ‘hidden debts’ in 2016, Minister Tonela said.
The minister was speaking at a press conference in Maputo, alongside Kevin Urama, the AfDB’s vice-president for Economic Governance and Knowledge Management.
Max Tonela indicated that the World Bank (WB) would also resume direct support to the State Budget, but did not specify when this would happen. “We have assurance of the mobilisation of resources to support the State Budget by the World Bank,” he emphasised.
Also read: Mozambique’s EDM awards power line construction work to India’s L&T
The Minister of Economy and Finance pointed out that the promise to resume direct financial aid to the country’s public accounts is a reflection of the recent indication by the International Monetary Fund (IMF) that it would resume financial assistance to the country, suspended following the discovery of the undisclosed debts in 2016.
“The agreement with the IMF is a beacon. We assume that, following that agreement, we will have better conditions to mobilise resources to improve the country’s credibility in international financial markets,” Minister Tonela explained.
The minister described the AfDB as “a natural partner of Mozambique”, adding that the two parties would shortly conclude a new cooperation program, the monetary amounts of which have yet to be agreed.
The new cooperation program with the AfDB, he continued, will focus on the development of economic infrastructure with the potential to accelerate the country’s economic transformation, strengthening resilience in the face of climate change and promoting the development of the private sector and employment, especially for young people.
For his part, the AfDB’s Kevin Urama expressed his institution’s willingness to work with Mozambique on improving the system for collecting domestic revenue, fostering prudent planning and the management of budgets and public expenditure, as well as ensuring debt sustainability.
Also read: Mozambique’s March inflation at 6.67% y/y
“We are pleased to note that Mozambique has made progress in strengthening the management of macroeconomic policies and public finances, in all aspects, in recent years,” Urama noted.
The AfDB’s vice-president stressed the importance of consolidating the mechanisms of reporting and supervising state accounts in order to ensure transparency in the management of public resources in favour of inclusive development.
Urama added that technical teams from the AfDB and the Mozambican government would meet from April 25 on to work on the details of the reforms that should be undertaken by Maputo and on the next cooperation program between the two parties.
The AfDB finances 21 projects worth more than US$1 billion (more than €922 million) in Mozambique in areas such as infrastructure, energy and agriculture.
