Mozambique & Foreign Aid

This past week, the United States Millennium Challenge Corporation (MCC) has refused to grant a second aid package to the government of Mozambique. These aid packages, also known as compacts, are given in the hope that the funds will allow the countries to build more infrastructure and combat national issues. The first compact of $506.9 million previously given to Mozambique was directed toward water supply, sanitation, road and agricultural improvements; however, many of these projects were delayed.

Because the conditions for a second aid package required that all projects funded by the first compact be completed, Mozambique was not eligible for more aid. The U.S. MCC did, however, contribute more funding to the current projects in Mozambique.

The first compact has supported Mozambique’s Farmer Income Support Project, Land Tenure Services Project, Rehabilitation of Roads Project, and Water and Sanitation project. The Farmer Income Support project aims to remove trees, provide support to increase crop yields and help farmers develop alternative sources of income. The Land Tenure project will address issues with land distribution laws and provide land-related services. The Rehabilitation of Roads project will attempt to improve markets by rehabilitating parts of the National Route 1, and the Water and Sanitation project will improve access to clean water supplies, especially in rural areas.

The government of Mozambique was taken aback by the rejection from the MCC; however, the country is also becoming less dependent upon foreign aid. In the past, foreign aid has been the center of the budget of the nation but in the future, Mozambique expects domestic resources to pay for 66.5 percent of the budget.

This increase in budget will allow an increase in education, health care, agriculture and rural development, the judicial system, security and more. The increase will also create new jobs, which will create a cycle of economic improvement.

Lienna Feleke-Eshete

Sources: All Africa, All Africa
Photo: The OGM