Mozambique: Ministry of Finance, World Bank sign financing agreements

Mozambique’s Minister of Finance Carla Loveira on Tuesday signed financing agreements with the World Bank for projects amounting to around US$455 million. “One of the key aspects the World Bank is essentially seeking to address is the concern over the recent macroeconomic shocks Mozambique has faced, namely the climate shock of the floods experienced at the beginning of this year, but also the impact of the Middle East conflict on our economy,” she said, cited by Lusa news agency. Minister Loveira was speaking on the sidelines of the signing of five memoranda of understanding with a delegation from the World Bank to support strategic areas including agriculture, education, social protection, and the minerals, water resources and sanitation sectors.

She noted that this is additional financing through existing windows between the International Monetary Fund, the World Bank and Mozambique. According to Loveira, a memorandum worth US$155 million was signed for the social protection sector, as an addition to an existing partnership programme in the country. “In the face of the crisis and the impact of the Middle East conflict, one of the responses the government must provide is how to improve production and productivity.

The partner responded accordingly, providing a reinforcement of US$50 million for agriculture and agribusiness,” she explained. The minister further said a US$300 million grant was signed, split equally between education and social protection, as well as a US$100 million memorandum to support the minerals sector. She said that, for the disbursement of funding, a fast-track mechanism had been designed outside the “traditional circuit” to improve national economic activity, focusing on agriculture and sanitation, as well as living conditions through social protection and education.

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“This is the major milestone being marked today with the arrival of this mission, which culminated in the signing of these five memoranda, representing four areas of intervention, which will guide our cooperation with the World Bank in a joint effort to contribute to macroeconomic stability and improve the lives of Mozambicans,” she said. World Bank Managing Director Paschal Donohoe said the agreements are part of efforts to develop the skills Mozambicans need. “The agreement includes additional financing to support Mozambican farmers, whom I recognise as a crucial part of your economy, helping them gain better access to markets and investing in their productivity and future,” Donohoe said.

On Monday, Mozambican President Daniel Chapo said in Washington investment is key to overcoming fragility and major challenges facing the country, such as climate change and terrorism in the north. In remarks following talks with the World Bank president Ajay Banga, Chapo said “peace and development are key to private sector investment”, which he considered crucial for financing Mozambique’s development.

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