The European Commission and the Government of Mozambique have today signed a budget support programme worth €100 million to respond to the socio-economic impacts of COVID-19.

Commissioner for International Partnerships, Jutta Urpilainen, commented: “With this contribution, the European Union will support Mozambique's Government in meeting its most urgent budgetary needs during the pandemic, and keep education, health and social protection services in place for the most vulnerable people in the country.”

The funds will enable essential State functions to continue. This includes the safe return of children to school, the expansion of social protection, and health services for highly vulnerable people.

Responding to the crisis

Since March, the European Union's global response to the COVID-19 has focused on mitigating the devastating effects of the pandemic and supporting partner countries' efforts to address the immediate health needs and subsequent economic crisis.

This new EU programme will provide the Government of Mozambique with short-term financial assistance to tackle the economic and social impact of the crisis, maintain vital State functions and protect social spending, thanks to effective delivery of basic services to the population.

The programme is part of the Team Europe global response to COVID-19 which, in Mozambique, has mobilised approximately €170 million by the EU and its Member States to tackle the impacts of the coronavirus pandemic.

Background

The funds under the programme signed today will take the form of budget support. This involves channelling funds via the National Treasury of Mozambique, so that the Government can pursue its COVID-19 response plans in support of the education, health and social protection sectors. The funds will help boost the country's macroeconomic stability, financial sustainability, fiscal space and resilience to further external shocks. It will also support progress in public financial management reforms, with a particular focus on greater transparency and accountability.

In addition to budget support, the programme will provide technical assistance for government monitoring of COVID-19 related spending and, by working with civil society, will strengthen local accountability processes.

The EU and Mozambique enjoy a close longstanding partnership under the ACP-EU Cotonou Agreement focused on promoting sustainable development, peace and security, democracy, the rule of law and human rights, as well as on tackling regional and global challenges. From 2014 to 2020, over €700 million have been mobilised through the European Development Fund to help improve the lives of people across Mozambique.