The World Bank plans to provide Mozambique with $6 billion in mostly concessional financing over the next five years to support public investment projects, a senior bank official said on Monday, Reuters reported.
Mozambique’s public finances are facing pressure, with the International Monetary Fund warning last week about worsening debt dynamics following its annual review of the Southern African country.
“We have a balance sheet of around $3 billion on the bank side, and we’re hoping to mobilise another $3 billion,” said Fily Sissoko, the World Bank’s division director for Mozambique, Madagascar, Mauritius, Seychelles and Comoros, speaking to reporters.
He added that the funding allocated to back the government’s development strategy is “very concessional” and largely made up of grants.
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In addition to the $6 billion package for public projects, the Washington-based lender aims to mobilize a further $4 billion in private sector financing.
Mozambique could also receive $921 million under the World Bank’s 21st replenishment of the International Development Association.
“This partnership framework is essentially aimed at ensuring macro-fiscal consolidation, with a view to sustaining economic recovery,” Mozambique’s Finance Minister Carla Louveira said.
Although there is renewed optimism surrounding the restart of a major liquefied natural gas project led by French energy company TotalEnergies, both the IMF and other observers have pointed to ongoing economic challenges.
These include delays in debt servicing and large, persistent fiscal deficits. Mozambique has also been affected by frequent cyclones and floods, which scientists say have been intensified by climate change.
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Image Credit: IISD
