The International Monetary Fund (IMF) will immediately disburse another 60 million dollars (3.7 billion meticals) in support to Mozambique under the country’s assistance programme.
“The executive board concluded the regular consultation process with Mozambique for 2024 and the fourth review of the Extended Credit Facility (ECF) agreement 36 months ago, allowing for an immediate disbursement equivalent to 60.03 million dollars usable for budget support, bringing total disbursements to the country to 330.1 million dollars,” the institution said in a statement released by Lusa.
According to the financial organisation, the three-year ECF agreement aims to support Mozambique’s economic recovery and reduce public debt and financing vulnerabilities, while promoting higher and more inclusive growth through structural reforms.
In this fourth evaluation, the IMF says that the programme’s performance “was mixed”, with three of the four structural benchmarks “met” and two of the four quantitative performance criteria “observed”.
The three-year ECF agreement aims to support Mozambique’s economic recovery and reduce public debt and financing vulnerabilities, while promoting higher and more inclusive growth through structural reforms
“Mozambique’s failure to fulfil part of the objectives was overcome by the corrective measures adopted by the authorities, as well as by their minor and temporary nature, namely in terms of the non-accumulation of new public external payment arrears and in the performance criterion relating to the domestic primary balance which was not met, partly due to higher than expected expenditure on the wage bill and debt service,” explains the IMF.
Quoted in the statement, the deputy managing director of the International Monetary Fund, Bo Li, recognises that the Mozambican authorities’ efforts to ensure fiscal discipline are welcome.
“Further fiscal consolidation is necessary, given the country’s high debt and tight financing conditions. In this regard, revenue mobilisation and the rationalisation of wage bill expenditure are essential to create fiscal space for high-priority social and development spending. Improving the execution of social spending and avoiding future arrears remains fundamental,” he said.
This programme was approved in May 2022 and provides total funding of 456 million dollars to Mozambique.
