General Budget Support 2015-2016

Description What is done in the programme or project and why, what results are pursued, who benefits from the activities and who are involved in the implementation.

General Budget Support is one of the main development aid instruments in the Mozambique Country Strategy (2014-2017). Finland´s participation in General Budget Support gives the possibility to influence Mozambique´s development in a comprehensive way and allows for political dialogue at high level. The decision on how the General Budget Support funds are used is made by the Parliament of Mozambique. General Budget Support promotes responsible and transparent use of public resources and strengthens national systems. General Budget Support supports the main objectives of the Poverty Reduction Plan PARP (2011-2014, extended to 2015); poverty reduction and sustainable economic growth. The proposal is to allocate 6 million Euros per year, in total 12 million Euros, for the period of 2015-2016 to General Budget Support in Mozambique. The OECD/DAC Budget Support evaluation (years 2005-2012) concluded that General Budget Support in Mozambique has been an effective way to fund the government budget and the best instrument in ensuring predictability of aid. Budget Support has contributed to major improvements particularly in the education sector. In primary education 40% more children were at school in 2012 in comparison with 2004. Total spending on priority sectors (i.a. education, health and agriculture) has quadrupled over 2005-2012 with the general budget support. The public finance management has improved substantially. However, the general budget support has not been succesful in reducing income poverty. Poverty declined significantly between the years 1996/7 and 2002/3, from 69 per cent to 54 per cent, the pace has slowed down since then. The malnutrition of children is still a major challenge.