December 14, 2007

Mozambique looks to donors to boost budget

More than 50% of Mozambique's national budget for 2008 will be made up of a financial injection from foreign donors, the Daily Investor Intelligence reported. The article quoted Manuel Chang, Mozambique's Finance Minister, as saying that 56% of the 89-billion meticais (about US $3,5 billion) will be secured from international donors. Mozambique's national spending will next year be increased by 22% from the 72,9-billion meticais spent in 2007. While the state's revenues will rise from 33,3-billion meticais in 2007 to 38,8-billion meticais in 2008, there will be a deficit of 50,2-billion meticais - which Chang said will be covered by foreign aid.
Mozambique has for many years relied on donor aid as it was plunged in a civil war for 16 years. Also, each year the country is hit by natural disasters such as floods and droughts. Chang was confident that foreign money will be forthcoming. He said Mozambique enjoys "a great increase in financial contributions from our cooperation partners. This really bears witness to the good relations and the harmony of interests between the Mozambican state and its partners".
According to Chang, about 48,2% of next year's foreign aid will be channelled towards direct budget support, while 51,2% will be earmarked for specific programmes and projects. He told the paper that in order to avoid running up debts, the government is ensuring that that more than two-thirds (68,1%) of the foreign aid it will receive consists of grants, while only 31,9% will be in the form of loans. (Sapa)

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