The economic and financial research company BMI has warned that the reduction in foreign aid from the United States could aggravate fiscal pressure in sub-Saharan African countries, including Mozambique.
‘The impact could be significant, especially in economies where this assistance represents a significant portion of foreign revenue,’ it said.
The analysis was presented by Orson Gard, BMI’s senior risk analyst for the region, during a webinar held on Tuesday (18). According to the expert, Mozambique and other countries such as Somalia, the Central African Republic, Liberia, Malawi and Lesotho may face additional challenges in budget management and maintaining economic growth.
‘The reduction in foreign aid could affect countries where these resources play a fundamental role in domestic consumption and fiscal stability,’ said Gard.
The analyst also pointed out that although trade with the US has a small weight in most countries in the region, the withdrawal of financial support could result in greater difficulty in implementing social and infrastructure projects, as well as limiting public investment.
BMI recommends that Mozambique and other affected economies adopt strategies to diversify sources of funding, promoting economic reforms and encouraging private investment to mitigate the impact of the reduction in external assistance.
Source: Engineering News
