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IMF to Approve a Futher $60M in Support for Mozambique’s State Budget Later This Year

IMF to Approve a Futher $60M in Support for Mozambique’s State Budget Later This Year

The International Monetary Fund (IMF) is to approve a further disbursement of 60 million dollars this year in support for the State Budget (SB), under the Extended Credit Facility (ECF) mechanism.

This process only depends on the conclusion, in the coming weeks, of the report by the Fund’s recent mission team, headed by Pablo Lopez Murphy, which spent 15 days in the country as part of the third evaluation.

According to the IMF’s resident representative, Alexis Meyer, who was speaking last Thursday, 16 November, during the seminar “Resilient Mozambique, Recent Milestones in the Development of Fiscal and Financial Capacity”, in Maputo, the disbursement of this sum depends on the conclusion of a report being carried out by the body.

Quoted by the Mozambican Information Agency (AIM), Meyer also said that Mozambique had made significant progress in the management of public finances, namely the modernisation of financial institutions, the introduction of the Single Treasury Account (CUT) and the Fiscal Decentralisation Law.

“Thinking about the national situation, November is underway and we have a month and a half until the end of the year. As such, the question of growth is more of an accounting of what has already happened,” said the representative, adding that “Mozambique is maintaining its projections for economic growth at 6 per cent”.

The Mozambican economy, said Meyer, is growing due to natural resources, although a little more slowly in the construction and manufacturing sectors. However, she also explained that domestic debt continues to rise due to the reduction in external financing for Mozambique, as well as for other countries in the region.

For her part, the IMF’s technical coordinator, Esther Palácio, emphasised that the consolidation of the central government’s main public finance management functions, budget planning, execution, accountability and auditing are sectors with significant improvements.

On the same occasion, the Minister of Economy and Finance, Max Tonela, revealed that the medium-term economic outlook for the country is positive, while admitting that there are risks associated with the war in Cabo Delgado, natural disasters and debt levels.

“The medium-term outlook is positive, but subject to various risks, above all due to the challenges associated with terrorist action in the north of Cabo Delgado and natural disasters caused by climate change, which put pressure on the fiscal space and the level of national indebtedness,” said Max Tonela.


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