The African Development Bank (AfDB) has approved a grant of U.S.$19.98 million to finance the implementation of Mozambique’s Economic Acceleration and Governance Support Programme.
Development Diaries reports that the funding is the first of two successive general budget support operations for fiscal years 2023 and 2024, each worth about U.S.$20 million.
According to the bank, the programme will support reforms to improve the private sector, enabling environment for economic recovery and green growth, and strengthening the efficiency, accountability and transparency of public expenditure.
Despite having one of the fastest-growing economies in sub-Saharan Africa between 2000 and 2015, job creation, poverty reduction, and human capital accumulation are still limited, according to a March 2023 report by the World Bank.
Also, the majority of the significant wealth-generated benefits only impact some segments of the economy.
Maintaining macroeconomic stability, taking into account the nation’s sensitivity to changes in commodity prices, and making additional steps to reestablish confidence through stronger economic governance and more transparency are additional issues.
The World Bank report also noted that the country’s struggling private sector is in need of structural reforms.
AfDB said this funding would enable Mozambique to streamline the regulatory framework and investment facilitation processes that foster private sector development and attract investment in climate-smart agriculture.
Photo source: Claus Wonnemann
