Mozambique receives $6 million grant from AFDB to strengthen the private sector and the management of public finances

NAIROBI, Kenya - The African Development Fund has approved a grant of US$6.73 million to Mozambique to support the implementation of the Institutional Support Project for Business Environment and Governance.

The project aims to increase resilience through institutional capacity building to support private-sector development and the management of public finances.

Its first component aims to improve the business environment, including capacity strengthening of the delivery unit at the Ministry of the Economy and Finance, which oversees the implementation of reforms under the Program for Economic Acceleration.

The project will help to streamline the administrative formalities imposed on businesses and investors and foster a more conducive environment for investment and business creation. It will also support the assessment of existing tax incentives and develop a conducive framework to maximize investment appeal and help attract climate-smart investments.

The second component focuses on increasing the efficiency, accountability, and transparency of public spending. This involves strengthening internal and external control functions and making these an absolute priority to guarantee transparency and accountability in the use of public funds. It will help to strengthen the public procurement function, and hence improve the effectiveness of the use of public resources, which is essential for creating the right conditions to bolster economic activity and drive inclusive growth.

Several ministries, departments, and agencies will benefit from the project, including the Ministry of the Economy and Finance, and the Ministries of Trade and Industry, Agriculture, Justice, Mineral Resources and Energy, Employment and Social Security, Land and the Environment, and Women and Social Action, as well as the Investment and Export Development Agency, the tax authorities, the General Inspectorate of Finance, the National Institute of Standardisation and Quality Control, and the Institute for Small and Medium-Sized Enterprises.

The private sector will also benefit from a more conducive business environment, thanks to simplified administrative procedures for businesses and investments, a modernized legal framework for investment and employment, optimized tax incentives, and a more efficient, transparent, and fairer system for awarding public-sector contracts.

GAROWE ONLINE