Mozambique

World Bank increases budget supports for Mozambique

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MAPUTO, Nov 12, 2008 (Xinhua via COMTEX News Network) -- The Mozambican government and the World Bank have signed in Maputo two agreements whereby the Bank is to grant 100 million U.S. dollars to support the Mozambican state budget for 2009 and help it respond to the high cost of foodstuffs.

Of the total amount. 90 million dollars which will be disbursed by July 2009, is a loan to support the state budget, and the remainder is a grant to help the food production to guarantee Mozambican food security, according to local media AIM on Wednesday.

This is a very substantial increase in direct budget supports from the World Bank. The Bank has provided budget support of 70 million dollars this year, and the pledge made in May was that the same amount would be provided in 2009.

The documents were signed by Planning and Development Minister Aiuba Cuereneia and World Bank regional director Michael Baxter.

At the ceremony, Baxter said that this money is aiming at sustaining high levels of growth through actions to facilitate and deepen institutional reforms in the areas of macro-economic and public financial management and procurement.

The 90 million dollar budget support credit comes from the International Development Association, the World Bank's soft loans arm, and was approved by the Bank's Executive Board a week ago.

It is the Fifth Poverty Reduction Support Credit to Mozambique and will support implement phase two of the government's Action Plan for the Reduction of Absolute Poverty.