The International Monetary Fund (IMF)and the World Bank introduced the Poverty Reduction StrategyPaper (PRSP) process in 1999 to strengthen the povertyalleviation focus of their assistance to low-incomecountries. At the IMF, the introduction of the PRSP wasaccompanied by the transformation of the Enhanced StructuralAdjustment Facility (ESAF), the concessional lending window,into the Poverty Reduction and Growth Facility (PRGF), witha view to giving a more central role to poverty reductionand pro-poor growth considerations in the design ofIMF-supported programs in low-income countries. The rest ofthe report is organized as follows. Part two providesbackground information on poverty incidence in Mozambique,as well as on political and economic developments since theearly 1990s. The relevance of the PRSP approach toMozambique s situation, application of the underlyingprinciples, and preliminary evidence on results, areexamined in part three. The effectiveness of IMF assistance,including alignment of the PRGF and technical assistance toPRSP objectives is assessed in part four. Part fiveconsiders the effectiveness of World Bank support, alsoincluding alignment of that support to the objectives of thePRSP approach. Part six reviews IMF-World Bank collaborationin relation to the PRSP process, and part seven presents themain conclusions and lessons.