The Board of Directors of the African Development Fund has given the green light to a grant of Ksh.987.5 million earmarked for Mozambique.
The grant, approved in Abidjan, is set to bolster the implementation of the Institutional Support Project for Business Environment and Governance in Mozambique.
The primary objective of this project is to enhance the country’s resilience by strengthening institutional capacities, particularly in the realms of supporting private-sector growth and efficient public finance management.
The project comprises two key components, each playing a pivotal role in Mozambique’s economic development.
The first component of the project is designed to revamp the business environment. This involves capacity building within the Ministry of the Economy and Finance, particularly in the unit responsible for overseeing reforms under the Program for Economic Acceleration.
The ultimate goal is to streamline administrative procedures for businesses and investors, creating a more favorable investment and business landscape.
Additionally, the project will assess existing tax incentives and develop a framework to maximize the attractiveness of investments, with a focus on climate-smart initiatives.
The second component of the project centers on enhancing the efficiency, accountability, and transparency of public expenditure.
This will entail strengthening both internal and external control functions, with an unwavering commitment to transparency and accountability in the utilization of public funds.
Special attention will be given to reinforcing the public procurement function, which will, in turn, improve the effectiveness of public resource utilization—a critical factor in stimulating economic activity and fostering inclusive growth.
Numerous government entities will benefit from this project, including the Ministry of the Economy and Finance, as well as 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.
Furthermore, agencies such as the Investment and Export Development Agency, tax authorities, the General Inspectorate of Finance, the National Institute of Standardisation and Quality Control, and the Institute for Small and Medium-Sized Enterprises will be involved.
The private sector is expected to gain significantly from this initiative, as it will lead to simplified administrative procedures for businesses and investments. Moreover, it will introduce a modernized legal framework pertaining to investment and employment, optimize tax incentives, and establish a more efficient, transparent, and equitable system for awarding public-sector contracts.
This grant signifies a crucial step towards strengthening Mozambique’s business environment, improving public finance management, and fostering transparency—a trifecta that holds the potential to attract investments and bolster economic growth in the nation.