World Bank gives Mozambique $70m to fight poverty

from The Tide, Nigeria

The World Bank Board of Directors has approved a loan of 70 million U.S. dollars for Mozambique to support the government’s Second Action Plan for the Reduction of Absolute Poverty (PARPA II).

This money, from the Bank’s soft loans arm, the International Development Association (IDA), is part of the “Third Poverty Reduction Support Credit

A World Bank press release on Thursday stated that the PRSC 3 will be delivered in three annual installments over the 2007-09 periods.

The money will be disbursed, the release added, “against the upfront completion of a number of specific reforms agreed upon by the government and the 18 external partners providing general budget support”.

The release quoted Gregor Binkert, the World Bank Task Team leader of the project, as saying that the loan “will help the Government implement PARPA II which focuses on poverty reduction through broad- based growth, particularly in rural areas.

It will also support key governance reforms in public financial management and procurement and the improvement, of the business environment”.

Among the goals of PRSC 3 are “to support macro-economic management by consolidating and deepening institutional reforms”, as well as governance reforms that support “efforts to enhance public investments and service delivery at the provincial and district level”.

The World Bank also claims its funding should assist economic development, “by improving the business environment, removing constraints and promoting agricultural growth”.

Also on Thursday, the World Bank board approved an IDA loan of 30 million dollars to support implementation of the Maputo Municipal Development Programme, known as ProMaputo.

Justifying this credit, the Bank said “Maputo City’s development is critical as an engine for growth and investment in the country, as well as for reducing the substantial and growing poverty and inequality in the capital.”

ProMaputo is defined as a long-term development programme, which will use “a series of loans that build on the lessons learned from earlier phases”.

The initial IDA loan is for three years, and an IDA contribution to the second phase, the Bank release said “will be defined at a later stage and subject to key objectives of Phase I being met.