Aid partners approve $816 million for Mozambique budget

By Charles Mangwiro

MAPUTO - A group of Mozambique's nineteen development partners on Wednesday approved a $816 million aid package to support the government's 2009 state budget and other development projects for the next five years.

The group, known as the Programme Aid Partners (PAP), who provide
support to the national budget, are the largest grouping of its kind in
Sub-Saharan Africa.

"In 2009, the government of Mozambique will receive assistance of $455
million from nineteen development partners in the form of general
support to the country’s budget, as well as a further $361 million in
pooled funding from the same partners to support the sectors", said
Irish ambassador Frank Sheridan at the signing of the memorandum of
understanding with the government.

Between 2004 and 2008, Mozambique received $1.689 billion in general budget support from the same group.

"Because we share Mozambique’s ambition to break the poverty line and
the ambition of being amongst the developed countries, we are
determined to assist until the country achieves the U.N-backed
Millennium Development Goals (MDGs) in 2015," Sheridan said.

PAP comprises the African Development Bank, Austria, Belgium, Canada,
Denmark, the European Union, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the United
Kingdom and the World Bank.

Under the agreement, the government committed itself to continued poverty reduction, democracy and the respect of human rights.

Mozambique approved a 2009 annual budget of $4 billion as it increased
spending on agriculture, education, health and infrastructure.

The government said it would need to make up a 55 percent budget
shortfall with tax increases as well as grants and soft loans from
international partners.

Mozambique expects economic growth to slow to 6.3 percent this year
compared to 6.5 percent last year due to the effects of the global
economic slowdown. It has targeted single-digit inflation after an
average inflation of 10.3 percent in 2008.


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