When, on May 22, the 19 donors and funding agencies that provide direct support to the budget (known as the G-19), delivered their pledges for 2009 to Planning and Development Minister Aiuba Cuereneia, Sweden and Switzerland announced that they would be giving less than in 2008.

Four donors, Germany, Austria, Ireland and Spain, announced an increase in budget support, while the other 13 partners pledged to keep support at the same level.

Giorgino Dhima, the deputy resident director of the Swiss Development Cooperation agency (SDC), said: "Our reduction in support for the state budget derives from the fact that we are not satisfied with the government's performance in the sphere of governance in general, and in the fight against corruption in particular.

We sincerely believe that the government is not keeping its promises."

Dhima added that the reduction was "symbolic" - a decline from eight million Swiss francs (US$7,3 million) this year to 7,5 million in 2009.

The Swiss official also claimed that there was a lack of "continual dialogue" between the government and its partners.

He thought it was a matter of concern that the government missed targets, since these were defined jointly, and were not simply imposed by the donors.

One specific example of the poor communication that Dhima mentioned was "until the penultimate day of the joint review we had not received information on the situation of legal cases linked to the Austral Bank".

Every year there is a joint review between the government and the budget support partners of progress over the previous year, and it is largely on the basis of this that funding for the subsequent year is confirmed.

The privatised Austral Bank nearly collapsed under a mountain of bad loans in 2001, and the government was forced to resort to domestic debt (through high interest bearing treasury bonds) to rescue it.

Since then the government has been trying to recover money from the debtors, with varying degrees of success.

Contrary to claims made in some of the media, neither Norway nor Denmark intends to follow Sweden in cutting budget support.

Both are maintaining support for 2009 at the 2008 level, and when he visited Maputo last week, the Danish Finance Minister, Lars Rasmussen, publicly announced that there would be a slight overall increase in Danish aid in the coming years.

The Minister-Counsellor in the Norwegian Embassy, Mette Masst, said initially Norway had considered increasing budget support for 2009, but then changed its mind.

The 2008 Norwegian contribution is 160 million Norwegian crowns (US$30 million).

Initially the decision was taken to add a further 20 million crowns, said Masst, "but on the basis of discussions between the G-19 and the Mozambican government, we reached the conclusion that it was better to keep support at 160 million crowns".

Nampa-AIM

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