Mozambique and Switzerland sign accords

The governments of Mozambique and Switzerland on Thursday signed an agreement in Maputo under which 32 million Swiss francs (about a billion meticais or 34 million US dollars) will be made available for budget support over the years 2013 to 2016.

The main objective of the Swiss donation is to support the Mozambican Poverty Reduction Strategy (PARP), economic reforms, financial management and good governance.

Under a second agreement, Switzerland will donate two million francs as part of its continuing support for reforms in the Mozambique Tax Authority (AT).

The agreements were signed by Mozambique’s Minister of Finance, Manuel Chang, and the Swiss Ambassador, Therese Adam.

According to Manuel Chang, the budget support will be disbursed at a rate of eight million francs per year, with 500,000 francs each year going to the Tax Authority.

The Swiss government has supported development in Mozambique for many years, channelling resources into the state budget and promoting programmes for structural reforms in the sectors of health and local government, as well as financing work on cross cutting issues such as HIV/AIDS.

Chang stated that the Swiss contribution has had an impact on economic growth, macroeconomic stability and good governance, which has improved living conditions in Mozambique.

According to Chang, support for the Tax Authority dates back to 2009, and “as a result of reforms, the tax ratio in Mozambique (the ratio of tax collection compared to the national gross domestic product) has increased from 17.7 per cent in 2006 to 23.98 per cent in 2012”.

He added that the latest contribution will help with the modernisation of the Tax Authority and have an impact on revenues which will reduce the budget deficit.

The Ambassador said that Switzerland is committed to supporting the Mozambican government in its efforts to reduce poverty and promote human development, along with the creation of an environment for inclusive growth and development.

The ambassador added that the support for strengthening the Tax Authority comes at a time when growth in the extractive industries could contribute significantly to domestic revenue.

Post published in: Africa News
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