Mozambique - Fourth Poverty Reduction Support Credit

Page 1 PROGRAM INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB3457 Operation Name Fourth Poverty Reduction Support Credit Region AFRICA Sector General public administration sector (40%); Sub-national government administration (20%);General agriculture, fishing and forestry sector (20%);General industry and trade sector (10%);General finance sector (10%) Project ID P103277 Borrower(s) GOVERNMENT OF MOZAMBIQUE Implementing Agency Date PID Prepared November 13, 2007 Date of Appraisal Authorization November 28, 2007 Date of Board Approval February 14, 2008 1. Country and Sector Background Mozambique has been a very strong performer in Africa, with rapid growth and poverty reduction, as it recovers steadily from the damage of the civil war. Following political stabilization and market-oriented reforms, and steady improvements in infrastructure, the economy has registered an average annual growth rate of 8 percent between 1996 and 2006, and incomes have risen considerably. The poverty headcount index has fallen from 69 percent in 1996/97 to 54 percent in 2002/03. In addition to the major reduction in poverty, other social indicators have also shown significant improvements. Economic expansion has been made possible by overall macroeconomic stability, policy reforms and continuing strong donor support, permitting broad-based expansion across most sectors of the economy, and a series of significant foreign investment projects (