The Board of the African Development Fund approved a $19.98 million grant for Mozambique.
This money is the first part of the fund’s two-phase financial aid for 2023 and 2024. Each part is roughly $20 million.
The plan has two main aims. First, it seeks to improve conditions for private businesses and sustainable growth.
Second, it aims to make public spending more efficient, transparent, and accountable. The grant will help streamline laws and investment options, especially for eco-friendly farming.
This will likely boost growth in agribusinesses and small companies. It will also strengthen internal checks, public procurement, and debt management.
Several reforms gained support from this plan. These include new strategies for agriculture and investment from 2022 to 2030.
Also, new laws will support the cashew industry by meeting market demands. Another law will provide tax benefits for small and medium businesses.
A revised law will encourage ethical investment practices.
Leila Mokaddem, a senior executive at the Bank, emphasized the program’s focus. She noted it largely targets private sector growth in agribusiness.
Moreover, she said it holds significant promise for creating jobs, particularly for women and youth.
By July 2023, the Bank’s ongoing ventures in Mozambique reached $1.19 billion. These initiatives cover various areas.
Energy projects make up 48.8%, transport comprises 32.6%, and agriculture takes 16.8%. Social projects form 1.6%, and multi-sector efforts account for 0.2%.
Background
This move comes at a pivotal time for Mozambique. The country is grappling with several challenges, including climate change and a struggling economy.
This grant could serve as a catalyst for more comprehensive reforms. Particularly, agriculture stands as a crucial sector for the nation.
It not only provides jobs but also plays a role in mitigating climate impact.
Green farming is an excellent focus area. It addresses both economic development and environmental concerns.
Mozambique’s focus on small and medium enterprises (SMEs) is strategic. SMEs often serve as the backbone of developing economies.
They are agile, quick to adapt, and can focus on niche markets.