Mozambique - Poverty Reduction Strategy Paper (PRSP) Annual Progress Report and joint assessment : Chairman's Summing Up

MOZAMBIQUE CHAIRMAN'S SUMMINGUP Poverty Reduction Strategy Paper Annual Progress Report and Joint IDA-IMFStaff Assessment Meetingof Board of Executive Directorsof IDA July 29,2003 The Executive Directors met to consider the Annual Progress Report on the implementationof the Poverty Reduction StrategyPaper (PARPA)prepared by the Governmentof Mozambique,and the Joint Staff Assessment (JSA) of the PRSP-PR preparedjointly by the staffs of the IMFand IDA. Directors commendedthe Government of Mozambiqueon its continuedcommitmentto poverty reduction and on the progress that has been madein implementingthe PARPA. They noted in particular, the impressive economic growth that has beenachieved sincethe 1992Peace Accords, along with the maintenance of macroeconomic stability. They acknowledgedthe progress made towards achieving improved educational outcomes, access to health services, and the fight againstmajor epidemicdiseases especially HIV/AIDS. Directors, however, noted the less significantmovementon the socialindicators, and particularly stressed the need to address the infant mortality rate that is well abovethe expectedlevels expressed in the MillenniumDevelopment Goals (MDGs), and gender issues. Directors encouraged greater analytical work on the relationshipbetween growth and reducing poverty, in order to further improve the development of effective poverty reduction strategies. Directors noted with concern that the broad consultativeprocess that supported the development of the PARPA did not seem to have been sustained,and urgedthe authoritiesto continueto use the new Poverty Observatory to institutionalizeparticipationby civil society,Parliament as well as the donor community in public policy planning and monitoring,thereby increasingaccountabilityand strengthening institutional capacity. Directors also noted the lack of quality informationand data and urged the government to work with the Bank in their efforts to improvethe statisticalsystem. Directors noted with appreciationprogress in decentralizationand welcomed the Government's efforts to improve governance,combat corruption, and increasethe efficiency and transparencyof the legal system.Directors underscoredthe need for continuedpublic sectorreforms in order to addressweak fiscal management capacity and ensure efficient and more effectiveuse of budgetaryresources.They also highlighted the importance of financial sectorreform and reducing labor market rigidities in order to achieve a sustainableeconomic growth. Directors also emphasizedthe need to address the existing constraints in the agriculture sector especiallyin the areas of land tenure and infrastructure,as well as the importance of private sector development. In this connection,Directors stressedthe need for a greater role for IFC especially in the area of small and medium-sizeenterprises. Finally, Directors concurred with staff that the PARPA continuesto provide a crediblepoverty reduction framework for IDA concessional assistanceto Mozambique.