The World Bank has approved a financial donation of US$100 million from the International Development Association (IDA) for a Mozambican government project to support companies in the country, the bank said in a statement today.
The project entitled Linkages for Economic Diversification aims to support micro, small and medium-sized enterprises to become suppliers for larger companies, the WB explained.
The support also aims to serve growing cities in central and northern Mozambique, “thus promoting linkages and economic diversification,” it added.
“Mozambique’s growth has been driven by Foreign Direct Investment (FDI) in capital-intensive industries, which does not translate into adequate levels of job creation,” Idah Z. explained in the statement. Pswarayi-Riddihough, WB country director for Mozambique, explained in the statement.
Supporting smaller enterprises “is a key factor for economic diversification, job creation, inclusive growth, and mitigation of fragilities. This is precisely the objective of this project,” she concluded.
The project’s priority geographic areas include the provinces of Cabo Delgado, Nampula and Tete, “where poverty rates are high and opportunities for economic linkages are significant.”
The WB notes that the operation is aligned with “the new conflict prevention and resilience building focus of World Bank activities in Mozambique.”
The new support comes after the World Bank announced in April $800 million in support for Cabo Delgado in conjunction with the Integrated Development Agency of the North (ADIN) – which in turn said it expected an additional $300 million, totaling $1.1 billion for emergency and development support for that region.
