Maputo:  None of the 19 donors and funding agencies who provide direct support to the Mozambican budget have threatened that that they will end this support, Finance Minister Manuel Chang told reporters on Thursday.

Although two days ago Foreign Minister Oldemiro Baloi admitted, on a radio programme, that there are "frictions" between the government and some of the donors, Chang was certain that the promised funds will be disbursed, albeit only in April.

Last May the 19 donors, known as the Programme Aid Partners (PAPs), or simply as the G-19, promised 472 million US dollars in budget support. Usually disbursements begin in January: thus in 2009, the G-19 disbursed 125 million dollars in budget support in January. This year the government was expecting 175 million dollars in January.

Instead, the money will only be released in April. Chang said this was because donors are still in consultations with their head offices. "The government has not received any information from members of the G-19 saying they will stop supporting us", he stressed.

One of the largest contributors in the G-19, the World Bank, has not joined the strike, according to the independent daily "O Pais", and has begun disbursing the 110 million dollars it promised last May.

Chang added that negotiations are under way between the government and the donors, chaired by Planning and Development Minister Aiuba Cuereneia. He expected them to have an outcome to allow the promised aid to be disbursed in April without further delay.

But what are the two sides negotiating about? The G-19 have not stated publicly what they are demanding of the government. Past donor concerns have centred on problems of governance, and the failure to make headway in the fight against corruption.

However, the timing of the donor strike comes just as major advances have been made in the anti-corruption struggle, with one former minister, Antonio Munguambe, sentenced to 20 years imprisonment for abuse of public funds, and another, Almerino Manhenje, awaiting trial.

The donors were also angered by the behaviour of the National Elections Commission (CNE) last year, and are reported to want a new electoral law. This hardly seems adequate grounds for withholding money, since all three forces in parliament agree that the electoral legislation needs to be reshaped.

Chang insisted that the Mozambican economy remains in healthy condition, and that internal revenue (mostly from taxation) is enough to meet the running costs of the state, notably the wages of state employees.

In case of necessity, Chang added, the government could resort to domestic debt - through the issue of high interest bearing treasury bonds. "The legislation envisages that, when there are deficits, the state can issue treasury bonds, if it can guarantee that the money will be reimbursed in the next financial year", he said.

The pledge the G-19 gave last may was a six per cent increase on the 445.2 million dollars pledged for 2009. The G-19 includes the World Bank, the African Development Bank, the European Commission, 13 individual members of the European Union, Canada, Norway and Switzerland.

The French Secretary of State for Foreign Trade, Anne-Marie Idrac, is due to arrive in Mozambique on Thursday to discuss, among other matters, budget support from the entire period between 2010 and 2014. This appears an indication that France, like Portugal and Italy, does not regard the donor strike as a useful tactic.