Risk Management in Transport PPP Projects
In the Islamic Countries
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 Carrying out other activities as may be superior to it under this Statute and other
applicable legislation.
The establishment of the Fiscal Risk Unit within the Ministry of Economy and Finance is in line
with the requirements set in the PPP law implementing regulation and followed a specific
recommendation made by the IMF on the basis of a Fiscal Transparency Evaluation conducted
in 2014 in Africa. The analysis revealed a lack of transparency in fiscal risks reporting in
Mozambique as well as absence of strategies to manage and mitigate such risk by the
government. On the basis of this analysis and in order to improve the management of the state
debt and fiscal risks, the Mozambican authorities finally opted to set up this unit, that also
benefited from training activities that involved the IMF, the World Bank, and financial aid from
Belgium and Ireland (IMF, 2018a; 2019a). Training activities also involved a study visit to the
Fiscal Risk Council (Conselho das Finanças Públicas) of Portugal. The Fiscal Risk Unit is
nowadays performing their duties among which the elaboration of Fiscal Risks Statement, which
was first produced in 2018.
Further to the supervision by the Risk Management Unit, the Mozambican Supreme Audit
Institution (Tribunal Administrativo) is also currently performing monitoring activities on the
PPPs as per institutional remit. This institution also benefited from training and exchange
experience activities as part of the Pro PALOP-TL SAI project supported by the European Union
and administered by the United Nations Development Program (UNDP). The project that lasted
between 2014 and 2017 was specifically conceived at strengthening the skills of the officers
from the Supreme Audit Institutions, Parliaments, and Civil Society in the field of public financial
management. It was directed to the Portuguese-speaking African countries and East Timor. As
part of the State General Account auditing procedure the Supreme Audit Institution of
Mozambique is also performing a review of the performance of the PPP system. The 2018 State
General Account Audit for the year 2017 is quite detailed about the review of PPPs in
Mozambique and expresses significant criticism concerning the practices in the monitoring and
supervision of the PPPs by the Ministry of Economy and Finance, and the line Ministries
responsible for the PPPs in their respective sector of competence or concerned Regulatory
Authorities. According to the audit supervision, verification, control and measurement of the
PPP performance should be more accurate, consistent between the different institutions and
timely performed, as required by the legislation (Supreme Audit Institution, 2018).
In line with the above summary and outcomes of previous studies the institutional setting
appears overall inadequate to properly manage PPPs over the course of their entire life-cycle. A
centralized PPP unit is absent in Mozambique and there are no PPP units in place within the
relevant sector Ministries and Regulatory Authorities (CFM seems however to have a
department for the management of the subsidiary companies – Direcção de Gestão de
Participações). Accordingly the institutions do not seem to be effective in performing the
required periodical monitoring activities in a systematic and comprehensive way as actually
prescribed by the PPP law and implementing regulations. The Fiscal Risk Unit at the Ministry of
Finance appears to be effective and prepared to make the required financial supervision of the
contracts; however PPPs should be measured also against contractual terms and with respect
to their impact with reference to the country and sector policy targets. There seem to be no