JOINT REVIEW 2007

On the 30 th of April the Government of Mozambique and the PAPs concluded their Joint Review with the approval of the Aide Mémoire, which is the document containing the final evaluation of the performance of the Government and of the PAPs during 2006. This document will also serve as a basis for the commitments for 2008. The Joint Review considered the implementation of PARPA in 2006 to be positive in various areas and the progress that was achieved gives to the Programme Aid Partners (PAPs) a satisfactory basis to continue and where possible increase their budget support to Mozambique . The Joint Review final meeting welcomed the entry of Austria as a new member of the Programme Aid Partners (PAPs). The PAPs will from now on also be known as G-19 in stead of G-18 (nineteen being the new number of members). The assessment of macro-economic policy concluded that the performance in this sector has been strong in 2006 and the economy grew at 8,5 percent (GDP). The sectors showing the strongest growth in terms of gross production value were agriculture (11,1%), construction (23,6%) and transport and communications (21,2%). As to the Public Finance Management , the conclusion was that aggregated fiscal discipline was in general satisfactory, and the reform of the State Financial and Administrative System (SISTAFE) led to further improvements in transparency and comprehensiveness of the budget and in information on budget execution. In the health sector, the provision of Anti Retroviral Virus Therapy (ARVT) increased significantly (from 27.000 to 44.100) and was extended to 70% of all districts. In education, access to primary education continued to improve and the net enrolment rate reached 87%. Service delivery equally improved in the water and social welfare sectors. However, the illiteracy rate continued to be twice as high among women, even in the age group under 35, and the quality of the services provided is low: The ratio pupil/teacher continues to be high (above 70/1), contributing to pupils having poor results. The process of the Public Sector Reform was marked by the establishment of the National Authority for Public Service and by the agreement on the Anti Corruption Strategy. Nevertheless, the progress in the implementation of cross cutting reforms planned a long time ago in the public sector continues at a slow pace and the demand for a salary reform appears in many sector reports. With respect to decentralization , much progress was made with the introduction of the Investment Budget for Local Initiatives (OIIL), the reorganization and strengthening of the district governments and the deconcentration of human resources management. Some progresses were recorded in the business environment but specific and persistent problems remain, including: access to credit; reimbursement of VAT and poor quality of national products . Rural development calls for an increase in the productivity of the small producers. The Government should make efforts to ensure that agrarian public services relevant for the reality of the market, reach most producers. Rural markets are needed that are more competitive, offer better conditions to the small-scale farmer and provide access to inputs. District and provincial authorities will have to prioritize investments in rural infrastructure such as roads, electric energy, irrigation systems and water management and sanitation, aimed at meeting the needs of production, marketing and rural processing. The Aide Mémoire shows also some important areas where the performance in 2006 was poor . For this reason, in the recommendation for 2007 special attention should be given to issues as: a better understanding of the various manifestations of poverty and its distribution; the allocation of responsibilities and the poor management capacity and service delivery at central, provincial and district level; the citizen's rights of access to natural resources and of participation in their management; the salary reform and the increase of the internal revenue collection. Coordination and communication between stakeholders improved. One example is sector support: For the first time all the sectoral annual reviews were an integral part of the Joint Review, which allowed for an additional alignment of the dialogue processes, reviews and sector commitments with the Government's planning and budgeting cycle. Another example is the comprehensiveness of the budget . A few years ago, a large part of donor support was off-budget. Now the majority of funds to Government are shown in the budget and a growing percentage goes through the treasury. One of the challenges on donor side is to be more reliable and predictable in the short and medium term. As a group, PAPs have been assessed as delivering ‘mixed performance', since individual performances varied quite considerably. The main area of progress concerned the utilization of the Public Finance Management system of Government. Aide Memoire - Joint Review 2007 Annex I - PAF results 2006 Annex II - PAPs' Group Evaluation – 2006 PAF Matrix Annex III - Indicators in the performance evaluation QAD/PAF 2007 Annex IV - Working groups' reports (Portuguese) Annex V - Audits (Portuguese) Annex VI - List of documents used as input for the Joint Review (Portuguese) Annex VIII - Terms of Reference   Documents used as input: Avaliação da Gestão das Finanças Públicas – preparação do PEFA BdPES 2006 e PES 2007 Comunicado de Imprensa da Missão do FMI de 14-28 Março de 2007 Dados Macroeconómicos de Moçambique actualizados Orçamento do Estado 2006 Orçamento do Estado 2007 Relatório do desempenho dos parceiros (PAPs) em 2006 - PAPs PAF RAP 2005 Relatório da Gestão das Finanças Públicas – Sectores das Águas e Educação Relatório das visitas Provinciais – Sofala e Gaza Relatório de Execução Orçamental 2006 Relatório e Parecer do TA sobre a CGE 2005 Relatório PEFA Relatório SAL e Caldeira – "Análise do Relatório de Execução Orçamental (REO IV 2006) e comparação com a Execução Orçamental 2005 (CGE 2005)” Síntese da IV sessão do Observatorio da Pobreza Síntese do encontro do Grupo de Trabalho do Orçamento, 20 de Março de 2007, Acta DNCP Síntese dos encontros de preparação da IV sessão do OP, 22-23 de Fevereiro de 2007