Overview : Mozambique’s natural resources and environment are the main sources of peoples’ livelihoods and are the backbone of the country’s main productive sectors: agriculture, fisheries, energy, and increasingly also tourism and mining. This linkage between environment, livelihoods and development has been recognized by the Government, by including as one of the five priorities into the current 5-years national development programme – Programa Quinquenal do Governo (PQG): Priority 5: “Ensure sustainable and transparent management of natural and environmental resources”. Also, the Government of Mozambique, jointly with the UNDP and UN Environment, has developed a programme to support further integration of environment and natural resources sustainability into the national, local and sector planning and budgeting processes, the so-called “Sustainable management of Natural resources for Resilient and Equitable growth and Development (SUNRED) Project in Mozambique”. Government institutions have an important role to play in environmental and natural resources (ENR) management in Mozambique, therefore natural resources and environment-related public revenues and expenditures and their effective management are key aspects to be analysed to properly inform and promote improvements of related policies, strategies and programmes and planning processes. Transparent and effective management of ENR revenues and expenditures therefore is part of efforts of the Government of Mozambique and its development partners in strengthening the public financial management. Combined with the fact that institutional responsibilities for ENR management and enforcement lie with a wide array of institutions, analysis of ENR revenues and expenditures within these institutions is important for providing the analysis necessary to better align ENR revenues and expenditures with national priorities and development goals. At the international level, strengthening of environmental mainstreaming in national budgetary processes is increasingly being recognized as a component of general budget support and the inclusion of environmental issues in Public Expenditure Reviews (PERs) is becoming a wider practice across countries. At the national level, the first public environmental expenditure review for Mozambique was carried out as a country case study of a bigger study entitled “Environmental Institutions, Public Spending and the Role for Development Partners”, covering the period 2005-2007 and carried out by the Overseas Development Institute. This study was supplemented by a MICOA (at that time, the Ministry for Coordination of Environmental Affairs) study covering the same period and predominantly focusing on expenditures of MICOA and its subordinated institutions. The Environment sector reports as part of Joint Review processes for 2007 and 2008 included also the analysis of budget execution for the review period, focusing on MICOA and its subordinated institutions. It is expected that gradually the annual review processes should aim for more cross-sectoral analysis of ENR revenues, budget allocations and expenditures. In 2012, a Public Environmental Expenditure Review PEER (2007-2010) was conducted by the MICOA and currently, the MITADER (Ministry of Environment, Land and Rural Development), in close coordination with the Ministry of Economy and Finance (MEF), is about to start a second PEER for the period 2010-2016. These TORs cover preparation of the second Public Environmental and Natural Resources Expenditure Review (PEER) which will build on the above studies and cover the period of 2010-2017. The 2nd-PEER will analyse the environmental expenditures and revenues within MITADER and subordinated institutions as well as within other key sectors relevant to the “environment and natural resources” in broader terms. It will also revisit and supplement the findings and conclusions contained in previous reviews. It is expected that the 2nd PEER will benefit from improved availability of information at programmatic level, and it is expected to provide support to capacity building for relevant national institutions to carry out PEERs on regular basis in the near future, as a tool to influence budgetary allocations for ENR management. Mozambique’s natural resources and environment are the main sources of peoples’ livelihoods and are the backbone of the country’s main productive sectors: agriculture, fisheries, energy, and increasingly also tourism and mining. This linkage between environment, livelihoods and development has been recognized by the Government, by including as one of the five priorities into the current 5-years national development programme – Programa Quinquenal do Governo (PQG): Priority 5: “Ensure sustainable and transparent management of natural and environmental resources”. Also, the Government of Mozambique, jointly with the UNDP and UN Environment, has developed a programme to support further integration of environment and natural resources sustainability into the national, local and sector planning and budgeting processes, the so-called “Sustainable management of Natural resources for Resilient and Equitable growth and Development (SUNRED) Project in Mozambique”. Government institutions have an important role to play in environmental and natural resources (ENR) management in Mozambique, therefore natural resources and environment-related public revenues and expenditures and their effective management are key aspects to be analysed to properly inform and promote improvements of related policies, strategies and programmes and planning processes. Transparent and effective management of ENR revenues and expenditures therefore is part of efforts of the Government of Mozambique and its development partners in strengthening the public financial management. Combined with the fact that institutional responsibilities for ENR management and enforcement lie with a wide array of institutions, analysis of ENR revenues and expenditures within these institutions is important for providing the analysis necessary to better align ENR revenues and expenditures with national priorities and development goals. At the international level, strengthening of environmental mainstreaming in national budgetary processes is increasingly being recognized as a component of general budget support and the inclusion of environmental issues in Public Expenditure Reviews (PERs) is becoming a wider practice across countries. At the national level, the first public environmental expenditure review for Mozambique was carried out as a country case study of a bigger study entitled “Environmental Institutions, Public Spending and the Role for Development Partners”, covering the period 2005-2007 and carried out by the Overseas Development Institute. This study was supplemented by a MICOA (at that time, the Ministry for Coordination of Environmental Affairs) study covering the same period and predominantly focusing on expenditures of MICOA and its subordinated institutions. The Environment sector reports as part of Joint Review processes for 2007 and 2008 included also the analysis of budget execution for the review period, focusing on MICOA and its subordinated institutions. It is expected that gradually the annual review processes should aim for more cross-sectoral analysis of ENR revenues, budget allocations and expenditures. In 2012, a Public Environmental Expenditure Review PEER (2007-2010) was conducted by the MICOA and currently, the MITADER (Ministry of Environment, Land and Rural Development), in close coordination with the Ministry of Economy and Finance (MEF), is about to start a second PEER for the period 2010-2016. These TORs cover preparation of the second Public Environmental and Natural Resources Expenditure Review (PEER) which will build on the above studies and cover the period of 2010-2017. The 2nd-PEER will analyse the environmental expenditures and revenues within MITADER and subordinated institutions as well as within other key sectors relevant to the “environment and natural resources” in broader terms. It will also revisit and supplement the findings and conclusions contained in previous reviews. It is expected that the 2nd PEER will benefit from improved availability of information at programmatic level, and it is expected to provide support to capacity building for relevant national institutions to carry out PEERs on regular basis in the near future, as a tool to influence budgetary allocations for ENR management. 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