WASHINGTON, December 5, 2014 — The World Bank Board of Executive Directors approved today US$110 million to support the Government of Mozambique’s State Budget and its poverty reduction plan (PARP). This International Development Association (IDA) funding is provided under the tenth Poverty Reduction Support Credit (PRSC X) program that supports the Government’s programmatic reform agenda agreed upon with the World Bank in the context of general budget support.
Mozambique’s economic growth has averaged 7.4 percent over the past two decades. However, this rapid growth has not been accompanied by a concomitant poverty reduction.
“The reforms supported by this operation will precisely contribute to a more inclusive growth that addresses the weakened relationship between growth and poverty reduction,” said Mark Lundell, World Bank Country Director for Mozambique, Madagascar, Mauritius, and Seychelles. “This operation represents our commitment to the country’s development priorities and its poverty reduction agenda. The successive PRSC series has facilitated improvements in public sector capacity, greater efficiencies of public finance management, and improvements in the country’s business environment.”
This tenth PRSC will continue to assist the Republic of Mozambique in improving its business climate and increasing transparency in the management of extractive industries; strengthening social protection; and enhancing public financial management.
“Reforms to simplify business licensing and registration support private sector growth and employment creation. Likewise, improving public investment management systems will result in investments with higher returns and a bigger impact on the well-being of the population,” said Enrique Blanco Armas, World Bank Task Team Leader for the PRSC and Senior Economist. “This project also supports the scaling up and improvements of social protection programs, which will enhance the Government’s ability to support the poorest and most vulnerable.”
The PRSC series is an important component of the World Bank Country Partnership Strategy (CPS) with Mozambique and supports the institution’s twin goals of ending extreme poverty and promoting shared prosperity. Under the CPS the World Bank commits to align its support to the national budget process and envisages consecutive PRSCs as an important element in supporting the Government’s poverty reduction agenda.