Transparency Initiative (EITI)

82 Case Study: Mozambique
9.3.4 TRADE AND INVESTMENT CLIMATE
The amount for subnational transfers is to be set by Parliament
every year and is currently 2.75% of total extractive
industry revenues. The total revenue base is that of the prior
year in order to avoid unwanted impacts of price volatility,
although the effectiveness of this practice may be debatable.
No evidence has been detected.
The amounts budgeted were higher than those actually
transferred in both 2013 and 2104. This was due to lower
production tax because of lower coal, heavy sands and gas
production and weak commodity prices, floods in 2013 and
new military conflict between the government and RENA-
MO as well as lower capacity to implement projects at the
local level in 2014. The issue currently discussed is how to
promote efficiencies in the management of these resources.
Communities are expected to work with the district authorities
in deciding the types of activities that should be
financed. It appears that in order to make this system effective,
there is a need for establishing adequate transparency
and accountability mechanisms and providing adequate
training both to local governments and citizens. Limited
training has to date been provided by KUWUKA. However,
under the Mineral Resource Governance Program, the
GIZ is currently providing capacity building to the District
and Local Governments of the Inhassoro and Govuro Districts
(Inhambane Province) to improve management of
the revenue transfers in collaboration with the Ministry of
Economy and Finance. This includes training of community
leaders in participatory methods as well as design and
prioritization of projects by consultative councils as well as
monitoring of implementation. This pilot project is expected
to be replicated in other Provinces.