Donors pledge US $722 million

International donors have pledged more than US $700 million in support of Mozambique's poverty reduction programme. A World Bank press release said 80 percent of the pledges were in the form of grants. "These contributions are in addition to the debt service relief granted to Mozambique under the original and the enhanced HIPC (Highly Indebted Poor Countries) frameworks," the bank said.

The donor support came during the thirteenth Consultative Group (CG) meeting of the government and its international development partners in Maputo on 25 and 26 October.

The statement said donors "recognised" the government's "continued commitment" to implementing economic reforms. "Despite severe setbacks caused by floods in the previous two years, Mozambique has shown a remarkable capacity to recover," said the statement. "Although GDP (gross domestic product) fell to 2 percent in 2000, it is expected to rebound to almost 15 percent in 2001 and to remain about 10 percent in 2002."

According to the Bank, delegates attending the CG meeting agreed that the main challenge ahead of Mozambique was its ability to ensure that the poor benefited from the country's rapid broad-based economic growth. Delegates also stressed the need to foster gender equity, empower women, improve maternal health, promote girls' education and protecting children, youth and women from violence and exposure to HIV/AIDS.

The statement noted that donors agreed that the implementation of the government's poverty reduction strategy - PARPA - was the key for sustaining poverty-reducing growth. PARPA aims to accelerate economic growth by increasing agricultural productivity and output, expanding health and education services, combating malaria and HIV/AIDS and improving basic infrastructure.

"They (delegates) noted the largest losses that have occurred in Mozambique's two largest commercial banks ... and expressed concern about the implications of the losses for the investment climate and for spending on poverty reduction," added the statement.