The World Bank is considering providing $300 million in direct support for the Mozambican state budget, six years after the model was suspended by international partners, the Bank's representative in the country announced.

"We are talking about a first installment of 300 million dollars, which we hope will be approved by our administration by June 30 at the latest," said Idah Pswarayi-Riddihough, quoted by Lusa, in statements after a meeting with the Minister of Economy and Finance, Max Tonela, in Maputo.

This is the first direct World Bank aid to the Mozambican state budget since the disclosure of the so-called hidden debts scandal in 2016, which led international partners to suspend direct financial aid following the disclosure of loans from public companies that had not been announced to either parliament or international donors.

Although she believes that the support will be authorized, the World Bank representative stressed the importance of completing the reforms that the Mozambican government has been developing to regain the trust of international partners.

"The reforms are almost complete and literally I think the remaining reforms will be completed by the end of this month," said Idah Pswarayi-Riddihough, who sees Tuesday's approval of a new financing agreement of about 445 million euros with the International Monetary Fund (IMF), which also suspended direct budget support in 2016, as an important step toward restoring Mozambique's credibility in the international market.

"The approval of a new program with the IMF gives a strong signal to the market, but mainly to all of Mozambique's partners," Idah Pswarayi-Riddihough said.

In addition to the $300 million that is expected to be approved in June, the World Bank representative said that the parties will discuss two more direct financing to the State Budget over the next two years, in an as-yet unknown amount that will be defined depending on the Government's reforms, with emphasis on transparency in accounts and governance.

"There are several reforms that are under discussion, but I think transparency and governance are among the most important. These are points that civil society has always raised," Idah Pswarayi-Riddihough said.

For the World Bank representative, the economic and social development of Cabo Delgado, a province terrorized by an armed insurgency since 2017, must remain among the priorities and the reconstruction plan designed by the government will deliver results.

"I can say with some confidence that the plan the Government has put together is going to be important for the development partners, ensuring a coordinated way of working and hopefully good results," he said.

The World Bank and the IMF are among the various international partners that have suspended direct financial aid to the State Budget, with both focusing on one-off financial aid in the wake of specific disasters and emergency situations, such as the covid-19 pandemic, cyclones Kenneth and Idai in 2019, or the humanitarian crisis caused by armed violence in Cabo Delgado.