06.01.2015 Views

Child Poverty in Mozambique. A Situation and Trend ... - Unicef

Child Poverty in Mozambique. A Situation and Trend ... - Unicef

Child Poverty in Mozambique. A Situation and Trend ... - Unicef

SHOW MORE
SHOW LESS

You also want an ePaper? Increase the reach of your titles

YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.

The agenda for exp<strong>and</strong><strong>in</strong>g water supply to meet the MDGs does not, however, simply<br />

<strong>in</strong>clude the required volume of f<strong>in</strong>anc<strong>in</strong>g. If this rapid expansion is to be realised,<br />

the sector’s poor budget execution rates will need to be addressed. Sector figures<br />

<strong>in</strong>dicate that the overall execution rate for <strong>in</strong>ternal <strong>in</strong>vestment spend<strong>in</strong>g was about 65<br />

per cent <strong>in</strong> 2005 (compared to around 55 per cent <strong>in</strong> 2004), while the National Water<br />

Directorate (DNA) with<strong>in</strong> the M<strong>in</strong>istry of Public Works <strong>and</strong> Hous<strong>in</strong>g executed only 47<br />

per cent of its budget (compared to 53 per cent <strong>in</strong> 2004). Sectoral figures available for<br />

rural water provide a good illustration of the problem.<br />

Figure 3.32: Comparison of allocation <strong>and</strong> execution of <strong>in</strong>ternal resources <strong>in</strong> the<br />

State Budget, 2001 - 2004<br />

60<br />

57.5<br />

58.7<br />

Billion of Meticais<br />

40<br />

20<br />

18.0<br />

17.5<br />

31.0<br />

24.4<br />

45.4<br />

11.0<br />

0<br />

2001 2002 2003 2004<br />

Allocated<br />

Executed<br />

Source: National Water Directorate, cited <strong>in</strong> GoM (2006)<br />

As with other service delivery sectors, timely disbursal of funds from the M<strong>in</strong>istry of<br />

F<strong>in</strong>ance is cited by the sector as a cause of this problem, with many months see<strong>in</strong>g<br />

very limited or even non-existent disbursements due to liquidity constra<strong>in</strong>ts. This is<br />

illustrated by the fact that the more f<strong>in</strong>ancially autonomous <strong>in</strong>stitutions <strong>in</strong> the sector<br />

– the Investment <strong>and</strong> Assets Fund for Water Supply (FIPAG) <strong>and</strong> the Southern Region<br />

Water Adm<strong>in</strong>istration (ARA-sul) – were able to realise execution rates of 100 per cent<br />

<strong>and</strong> 94 per cent respectively accord<strong>in</strong>g to sector data.<br />

The sector also faces a grow<strong>in</strong>g debt burden, which reached around US$2.5 million<br />

by the end of 2005 (GoM <strong>and</strong> PAP, 2006). The key drivers of <strong>in</strong>creased debts are<br />

arrears <strong>in</strong> VAT payments <strong>and</strong> other counterpart contributions that the National Water<br />

Directorate has <strong>in</strong>curred under externally funded projects. As discussed <strong>in</strong> Chapter<br />

II, many donors refuse to pay these charges on their <strong>in</strong>vestment projects, <strong>and</strong><br />

under Mozambican law the Government must assume the responsibility to meet<br />

contractors’ claims. However, the budgetary allocations made to meet these fiscal<br />

charges are very often <strong>in</strong>adequate, ma<strong>in</strong>ly due to fiscal constra<strong>in</strong>ts limit<strong>in</strong>g domestic<br />

revenues available for counterpart fund<strong>in</strong>g. While this problem affects the health <strong>and</strong><br />

education sectors it is particularly pronounced <strong>in</strong> the water sector. This is seriously<br />

delay<strong>in</strong>g the execution of externally funded projects, thereby reduc<strong>in</strong>g their economic<br />

returns <strong>and</strong> <strong>in</strong>creas<strong>in</strong>g the costs of procurement, as contractors <strong>in</strong>corporate delays<br />

<strong>and</strong> non-payment of VAT <strong>in</strong>to their bids (Orlowski, 2006). For the Government, the<br />

128 CHILDHOOD POVERTY IN MOZAMBIQUE: A SITUATION AND TRENDS ANALYSIS

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!