The International Monetary Fund (IMF) will send a mission to Mozambique in November to assess the implementation of the government’s new program. The announcement was made on Monday (27 October) by President Daniel Chapo following a meeting in Washington with the IMF’s Deputy Managing Director, Bo Li.
“The mission aims to familiarize itself with the new vision and program being implemented in the country. In the meeting, our strategic partner committed to continue working with us, assisting in improving the macroeconomic and financial situation so that we can foster development,” described the Head of State.
President Chapo revealed that the Mozambican government requested support for reforms related to public debt, revenue collection, good governance, and anti-corruption. “We want to expand our fiscal base, increase transparency, and promote best practices to improve the business environment.”
Bo Li explained that both parties discussed the challenges and opportunities for Mozambique and how the IMF can support reform and stabilization programs. “I want to thank President Daniel Chapo for being here and I look forward to working with him and his team,” he concluded.
In August, the IMF emphasized that the country needed fiscal consolidation to ensure public account sustainability, following significant fiscal slippage in 2024, partly influenced by post-election protests. “Preliminary estimates suggest there were significant fiscal slippages in 2024, partly explained by the slowdown in economic activity during the last quarter,” stated Pablo Lopez Murphy in an IMF statement on the recent assessment of the Extended Credit Facility (ECF) agreement.
Murphy added that fiscal consolidation in 2025 is necessary to ensure budget and debt sustainability and preserve macroeconomic stability, noting that “slippages in payroll expenditures continue to divert important spending priorities, including social transfers and infrastructure.”
He recommended rationalizing payroll spending and reducing tax exemptions. “Social spending should be prioritized, and debt management can be further strengthened to prevent defaults.”
According to the IMF, inflationary pressures have increased but remain under control. “Despite supply chain disruptions and higher food prices related to social unrest, inflation remained below the implicit 5% target.”
The IMF also noted that economic activity in Mozambique contracted sharply in the last quarter of 2024, reflecting the impact of social unrest in the post-election context, leading to a 4.9% drop in GDP, leaving overall growth for the year at 1.9%.
“For 2025, growth is expected to recover to 3.0% as social conditions normalize and economic activity rebounds, especially in services. Discussions on the ECF program reviews with Mozambique will continue in the coming weeks,” the IMF concluded.
Source: Diário Económico
