WASHINGTON, December 21, 2021 — The World Bank approved an $80 million grant from the International Development Association (IDA) to support Mozambique’s efforts to improve domestic tax management, budget execution, and transparency and accountability in the management of public resources. The grant will complement $20 million in financing received under a Multi Donor Trust Fund established in partnership with the European Union, Finland, and Norway to support reforms in these areas.
“COVID-19 plunged Mozambique into its first economic recession in almost three decades, weakening domestic consumption and investments and worsening living conditions, especially for the urban poor engaged in the informal sector,” noted Idah Z. Pswarayi-Riddihough, World Bank Country Director for Mozambique, Madagascar, Comoros, Mauritius, and Seychelles. “This put added pressure on public finances as the need to find efficiencies across government spending is greater than ever to ensure the delivery of services.”
Recent diagnostic studies of the government’s performance in public expenditure and financial accountability identified challenges to effective service delivery, including budget planning; procurement of goods and services; and the effectiveness of external oversight mechanisms in the implementation of the fiscal decentralization policy, which is critical to ensuring that funding is provided to support service delivery across Mozambique.
The Managing Public Resources for Service Delivery project will support a series of activities to address these constraints, strengthening domestic tax management; improving expenditure management and controls in key areas, such as treasury management and public procurement; reinforcing internal controls and internal audit arrangements; and enhancing the institutional capacity for external audits conducted by the Tribunal Administrativo, the country’s audit institution. In addition, the project will strengthen citizen engagement in budget preparation and execution; and support the government’s capacity to conduct effective oversight over state-owned enterprises. Lastly, it will boost efforts to enhance the delivery of services from the municipalities by strengthening the availability of sufficient resources to support their activities.
“By strengthening tax administration, expenditure control, fiscal decentralization, and citizen engagement, the project aims to enhance transparency and accountability in the management of public resources in Mozambique and thus contribute to improved service delivery in the country,” added Joseph Mubiru Kizito, Lead Financial Management Specialist and the project’s task team leader. “In this regard, the project builds on ongoing reforms but also includes new initiatives, such as the piloting of Citizens Assemblies (CA) to enable citizens to provide inputs to the budget formulation and execution process.”
This operation is aligned with the World Bank Group Country Partnership Framework (CPF) for Mozambique FY17-21 and complements other projects financed by the World Bank and other development partners that aim to improve public financial management in Mozambique.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 74 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has provided $458 billion to 114 countries. Annual commitments have averaged about $29 billion over the last three years (FY19-FY21), with about 70% going to Africa. Learn more online: IDA.worldbank.org. #IDAworks