MAPUTO – The World Bank on Monday signed a $300 million grant to Mozambique, returning to the country six years after aid was suspended due to a hidden debt scandal.
Mozambican Finance Minister Max Tonela said the money will be used to fund infrastructure projects aimed at boosting the economy and improving living conditions in the country, one of the poorest in the world.
“This is the first government budget support we hope to see in the next three years,” Tonela said at a signing ceremony in the capital, Maputo.
The deal follows a $456 million deal signed in May with the International Monetary Fund (IMF) that marked Mozambique’s return to the good side after a scandal sparked the worst economic crisis since independence from Portugal more than four decades ago.
The government secretly borrowed $2 billion from international banks in 2013 and 2014 to buy a tuna fishing fleet and surveillance vessels.
Maputo hid the loans from parliament, but the debt was exposed in 2016, prompting donors including the IMF and World Bank to suspend financial support.
An independent audit later revealed that $500 million had been embezzled and not accounted for.
Idah Pswarayi-Riddihough, World Bank country director for Mozambique, said the agreement, the outlines of which were announced in July, aims to “support structural reforms” and builds on the efforts of these years to increase accountability and transparency in the public sector to strengthen.
Prosecutors have indicted 19 prominent figures over the scandal and forced a former president and other top officials to testify in a case that has gripped the nation.
A verdict in the case is expected later this year.
- Editor / additional report by AFP
