CORRUPTION ASSESSMENT: MOZAMBIQUE - World Bank

• Develop clear standards for student enrollment, addressing issues related toproximity of school to residence, enrolling girls, daytime shifts, etc.6. Corruption in Government Functions6.1 Public Financing and BudgetOverall, public financial management risk in Mozambique is high. While economicgrowth has been strong, comprehensiveness and transparency of the budget is poor,medium-term planning and budgeting are weak, and budget execution and accountingand reporting present serious deficiencies. The area of greatest concern is external auditand accountability.While external aid helped to rebuild Mozambique and has contributed to economicgrowth, it has also had perverse side-effects, fragmenting government planning,budgeting and management and weakening national ownership of policymaking. SinceMozambique also has a weak civil society and a weak National Assembly that are not yetable to act as effective checks on the executive, high aid dependence means that thebudget process essentially involves only two actors, the executive and foreign donors.Accountability to donors is much stronger than it is to Mozambican society. Futurereforms need to be focused on changing this pattern and building the capacity of domesticdemand for accountability concerning public finance.Institutional setting and budget processesThere is no single document from the government of Mozambique setting out its fullbudgetary resources or a strategy for aligning development assistance with the country’sown financial resources. Instead, there is a proliferation of bilateral agreements.However, under new agreements with budget support donors, government and donorshave committed to a joint performance review that could provide the framework for amore transparent budget framework.Aware of the shortcomings of the existing public finance management (PFM)arrangements, the government is implementing a new financial management informationsystem, SISTAFE, with the support of nine donors. SISTAFE is only the latest of severaldonor efforts to rationalize budgeting processes.In the period 2001-03, at least 14 diagnostic reviews were undertaken, four of whichinvolved more than one donor and six of which resulted in the production of an actionplan. Taken together, these reviews resulted in 280 recommendations covering planning,disbursement, accounting, audit, political accountability and capacity building. Yet, themain findings of the last review (September 2004) were that overall PFM risk inMozambique remains high. Clearly, more than donor pressure and studies is necessary.FINAL REPORT 26