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International donors trim or withhold Mozambique aid over corruption concerns

The group of donors who contribute aid directly to Mozambique pledged $275 million in aid this week, a decrease from the $309 million given last year, citing concerns about corruption in the region.

Norway, Belgium, the Netherlands and Spain opted to stop their commitments altogether, the Mail & Guradian reported Saturday.

Germany and the United Kingdom have delayed committing funds, and it is unclear whether they will make donations before the end of the year, since pledges are usually calculated in May for the following year.

Mozambique, a southern African country still struggling to rebuild its infrastructure after a civil war that ended 21 years ago, has seen foreign aid dwindle steadily. The aid comprised half of the country’s government budget in 2010, but it was only a third of it last year.

Italy’s ambassador Roberto Vellano said foreign donors have cut aid to Mozambique’s government by 11 percent compared to last year, given their concern over corruption and the country’s lack of fiscal transparency.

Donors were displeased with the nation’s use of a state-backed $800 million bond last year to finance the purchase of a tuna-fishing fleet on behalf of a state company. .

Some benefactors, instead of withholding aid for 2015, plan to increase funds to certain sectors of Mozambique’s economy, such as agriculture and health, instead of giving the money directly to the central government.

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Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

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