WASHINGTON D.C., March 15, 2012 – The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit of US$110 million equivalent in support of the Government of Mozambique’s poverty reduction priorities.
This operation is an integral part of the Bank’s strategy to support the Government of Mozambique (GoM)’s Second Action Plan for the Reduction of Absolute Poverty (PARPA II) and its successor, the PARP. Support to these GoM action plans are underpinned by the Performance Assessment Framework (PAF) agreed upon by the GoM and the nineteen external partners (the G-19) providing general budget support (GBS) to Mozambique. The World Bank GBS is channeled through a policy lending instrument, the Poverty Reduction Support Credit (PRSC).
“This is the eighth of an annual series of World Bank budget support operations to Mozambique since 2004, and constitutes the institution’s unequivocal commitment to the country’s medium and long term goals,” said Mr. Laurence Clarke, World Bank Country Director Mozambique, Angola, and São-Tomé and Principe.“The PRSC series support the country policy development agenda by tackling those policy bottlenecks that may constitute impediments for a long-term sustainable and broad-based growth.”
Specifically, the PRSC8 will support the Government’s macroeconomic management by deepening reforms for improved use of public resources and better budget formulation; stronger public financial management systems; greater internal and external oversight; and civil service wage and pension reforms. The PRSC 8 will also support economic development by reducing the excessive regulation constraining business activities. Additionally, this financing will support reforms required for the country’s full membership to the EITI, and the strengthening of the legal and institutional framework for public and private partnerships and concessions.
“By helping tackle bottlenecks to growth, this operation has become a critical World Bank policy lending instrument necessary to unleash the country’s potential by supporting the right reforms that help expand investments as well as make the most out of existing ones to the wider economy,” added Mr. Julio Revilla, Lead Economist and World Bank Task Team Leader for the PRSC series. “This development policy operation (PRSC) coexists with the Bank’s investment lending and technical assistance that support the development of government systems and capacities.”
The PRSC 8 is a key instrument of harmonization with donors. It is based on a MoU signed between the GoM and 19 donors supporting the State budget, including the World Bank; the principle of which are as follows: (i) predictability and alignment with domestic systems; (ii) joint monitoring, and policy actions or expected outcomes in the program are to be based on the common Performance Assessment Framework (PAF); (iii) no separate reporting to the donors is required; and (iv) mutual accountability.
The PRSC series is a component of the World Bank’s own Country Partnership Strategy for Mozambique, and its financing is complementary to other World Bank investment lending and technical assistance operations. A detailed description of the credit is contained in the PRSC-8 project document, which is available at the web link below, or by requesting a copy through an email to email@example.com, or by contacting the World Bank office in Maputo.