Aid and budget transparency in Mozambique

External donors contributed some US$1.6 billion in aid to the Government of Mozambique in 2009. These donors have all committed to making aid more effective by adhering to the Paris Declaration on Aid Effectiveness and to the Accra Agenda for Action. However information about how much money is available, how it is being spent and what are the results of that aid are still poor. This short study therefore, looks at some of the constraints faced by governments in preparing and implementing the budget, by the parliament in their oversight role and by civil society in monitoring the budget process related to lack of transparency of aid and the budget.

The paper's findings include:

• Mozambique has made some progress in recording information about aid flows through the establishment of an online database where donors record regularly how much money they have committed to spend or have spent on individual projects. However, not all of the data is correctly entered, making the picture inaccurate and it is not yet linked to the government electronic state financial administration system
  
• Poor information affects in particular the health sector where aid is extremely fragmented in different projects. It is hard to budget without a clear idea of how much money will be available and aid commitments are not always delivered upon
  
• Nearly half of all aid money coming to the government does not use government budgetary execution, reporting or procurement procedures and two-thirds does not use government audit procedures which makes it all but impossible for the government, parliament or civil society to monitor clearly how this money is being spent.

The author's recommendations include: 

• The study recommends that a number of actions be taken by the government, parliament, donors and civil society to improve the budget process through increased transparency. Donors need to provide more timely information about predictable aid and channel more of their aid through government systems
  
• The government should publish revenue reports and make the Economic and Social Plans the basis of the State Budget which should in turn be clearly linked to the medium term expenditure framework
  
• Parliamentarians need to take a more proactive role in demanding accountability and transparency from the government and donors, and in demanding transparency and effectiveness in the districts that they are linked to. Civil society organisations could increase their capacity to engage in budget monitoring by focusing on a few strategic areas.