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World Bank clears $25 million loan for Mozambique

02 Apr 2009 15:24:34 GMT
Source: Reuters

MAPUTO, April 2 (Reuters) - The World Bank has approved a $25 million loan to be disbursed over five years to help Mozambique boost sectors including tourism and agriculture, an official at the poverty-fighting institution said on Thursday.

World Bank regional director Michael Baxter said the loan would assist the southern African country to reduce the cost of doing business there, build capacity at public sector agencies and spur enterprise competitiveness.

"The project would contribute to the (government's) Absolute Poverty Reduction Plan by raising the private sector to a category where it could increase growth and employment," Baxter told reporters at a media briefing.

"(It) will focus on sectors with high growth and export potential such as tourism and agribusiness."

The money will be lent through the World Bank's concessionary arm, the International Development Association (IDA), and repaid over 40 years with a 10-year grace period.

Baxter said the project would focus on improving competitiveness in small and medium enterprises (SMEs) and assist broad-based growth by promoting access to business development services.

"We hope that through this effort we can make a difference towards realising our shared vision of a vibrant and internationally-competitive private sector in Mozambique," Baxter added.

IDA funds come from World Bank Group revenues and contributions by shareholding governments, many of which also have development assistance programmes in Mozambique.

Mozambique is one of Africa's poorest countries and still relies heavily on donor aid following a 17-year civil war which ended in 1992. (Reporting by Charles Mangwiro; Editing by Serena Chaudhry and David Stamp)

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