122. Today, Mozambique’s development strategy is framed in the Plan of Action for the Reduction of Absolute Poverty II (PARPA II) for 2006–09. This action plan aims at reducing the incidence of poverty from 54 per cent of the population in 2006 to 45 per cent in 2009. In order to achieve this target, the government is consolidating macroeconomic stability and undertaking a second wave of structural reforms that encompass the public sector, fiscal policy governance and the business climate. 123. The implementation of a computerised integrated budget and Treasury management system, called e-SISTAFE, has contributed to improved public expenditure management. Revenue collection has increased moderately, too. To boost revenue further, it will be necessary to broaden the tax base, especially in the extractive and informal sectors, and to strengthen tax administration. 124. In line with PARPA II’s target, the government is increasing spending in priority areas (to 65 per cent of total expenditure) and undertaking huge infrastructure rehabilitation projects. This increase in spending will be comfortably financed by rising aid inflows and, to a lesser extent, by resources freed up by the Multilateral Debt Relief Initiative (MDRI). Impact of Economic Reforms 125. From 1990, the Mozambican economy has been among the fastest-growing economies in the world, with an average annual GDP growth of about 8 per cent. The cyclone and devastating floods of early 2000 reduced economic growth for that year to 2.1 per cent, but the country bounced back in style when growth in GDP approximated 14 per cent in 2001. 126. Pivotal to Mozambique’s structural adjustment, sound macroeconomic management and fiscal prudence became key constituents in its efforts at economic reform. The country achieved much of its impressive results only at a later stage of its transition, under PARPA I of 2001–05, sustaining an average economic growth of around 8 per cent per year since 1993, and reducing the Poverty Headcount Index (PHI) from 69 per cent in 1996 to 54 per cent in 2003. Central to the ESRP, PARPA I focused mainly on the prime determinants of growth. Economic growth, the World Bank asserts, has been pro-poor, meaning that “the rate of consumption growth of people below the poverty line was strongly positive due to agricultural expansion, greater non-farm activities in rural areas, and a rise in employment”. 16 127. As mentioned previously, in 2006 Mozambique introduced PARPA II for 2006– 09 in order to shift the balance of emphasis more towards alleviating poverty. 16 World Bank. 2006. Republic of Mozambique Poverty Reduction Strategy Paper: Joint staff advisory note. Washington DC: World Bank, page 2. 70 A P R M COU N T RY R EV IEW R EP ORT NO. 11