- The Italian government has approved of euro 12 million to be given as direct budgetary aid to Mozambique. This is the first time since Italy makes use of this trust-based aid type since 2004.
The Italian budgetary aid to the government of Mozambique is worth euro 12 million and is to be given during the 2010-12 period. Italy has not given direct budget aid to any country since 2004, as this type of development aid is difficult to monitor and deeply based on trust.
The Italian-Mozambican agreement was signed in Maputo yesterday, by the Italian Ambassador Carlo Cascio and the Mozambican Minister of Foreign Affairs, Oldemiro Baloi.
According to Italian government sources, this new willingness to provide budgetary aid to Mozambique comes as part of an initiative from the so-called G19, a grouping of Mozambique's 19 principal donors. The G19 initiative is to improve coordination among donors and the Mozambican government to assure best possible development gains.
These development aid funds, the same sources said today, were expected to contribute to "the processes of planning and control of public fund spending, the strengthening of dialogue between the parties and the increased participation of all interested stakeholders in the definition of development policies."
Yesterday's signature in Maputo was said to complete a package of agreements that is to secure Italy's spending of euro 60 million in Mozambican development projects in the 2010-12 period.
The use of budget aid has been less and less applied by donor nations as it difficult to monitor the use of such development aid funds and much can be lost to corruption. However, developing countries and pro-development organisations have called for a resumption of budgetary aid to assure some "predictable financial support" that eases development planning.
Following a series of corruption scandals in Mozambique during the last decade, some even involving development aid funds, many donors have cut their direct budget aid, redirecting funds towards concrete projects. Portugal and Belgium are among the main donors still regularly providing budgetary aid to Mozambique.
With the G19 initiative, the budgetary aid part of development funding for Mozambique is foreseen to increase again. The aim is, among others, to ease long-term economic planning for the Maputo government, which is one of the most aid dependent states in the world.
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