WASHINGTON D.C., March 30, 2010 – The World Bank Board of Executive Directors yesterday approved an International Development Association (IDA) credit (1) of US$ 30.40 million equivalent in support of the implementation of the Government of Mozambique’s National Decentralized Planning and Finance Program.
The overall objective of the operation is to support the Government of Mozambique in improving the performance of the national planning and finance systems by strengthening the capacity of local governments to plan and manage resources for social and economic development in a participatory and transparent manner. This project constitutes IDA’s contribution to a common fund; the terms of which are contained in a Memorandum of Understanding (2) signed on March 18, 2010 between the Government of Mozambique and development partners, including the World Bank.
“I’m pleased we’ve reached this important milestone, which comes only days after we have signed a memorandum of understanding establishing the terms of a common fund between the Government and partners to implement this project. This financing is all about supporting the current Government efforts towards expanding local governance, including through central allocations of resources to districts, but also greater local capacities to plan and manage those resources in a transparent, inclusive, and accountable manner,” said Luiz A. Pereira da Silva, Country Director for Angola, Malawi, Mozambique, Zambia, and Zimbabwe.
The project will seek to achieve the following results: a) improve national support systems by assisting the central government in establishing an effective framework for decentralized planning and finance, through capacity building and technical support; b) strengthen participatory planning and budgeting at district level through enhanced capacities of local consultative councils and district governments to participate in the planning and budgeting processes; c) enhance management and implementation capacities, which entails districts’ institutional ability to plan, procure and implement programs and investments; d) strengthen oversight and accountability at district level both upward and downward, including the strengthening of internal inspections and external audits of financial management and administrative procedures, and community oversight; e) improve knowledge management by collecting, systematizing, and disseminating good practices, innovations, information, and knowledge. The project will also include a coordination component to ensure good quality of project management and will fund certain activities outside the Common Fund, specifically those targeted to programs of capacity building in selected provinces.
“The timing of the approval couldn’t be better, as this operation is aimed at scaling up ongoing and recent projects, including the IDA-financed Decentralized Planning and Finance Project (2004-09), which means continuing activities aimed at strengthening, expanding, and harmonizing the experiences and methodologies of the existing partner-supported projects into a national integrated system for participatory planning and development at local level”, added Ali Alwahti, World Bank project task team leader.
This project is a component of the World Bank’s 2008-2011 Country Partnership Strategy for Mozambique.
(1) The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.5 percent, a service charge of 0.75 percent, and a 40 year maturity which includes a 10-year grace period.
(2) Signatories to the Memorandum of Understanding were the Government’s Ministry of Planning and Development, The World Bank, The United Nations in Mozambique (UNDP), The Federal Republic of Germany, The Swiss Agency for Cooperation and Development; The Republic of Ireland; and the Dutch Government.