The International Monetary Fund (IMF) warned this Wednesday (4) in Maputo that new global shocks—driven by the escalation of the conflict in the Middle East, rising oil and fertilizer prices, and a reduction in international aid—are increasing risks for Mozambique’s economy and for the wider Sub-Saharan African region.
The warning was issued by Olamide Harrison, the IMF Resident Representative in Mozambique, during the presentation of the Regional Economic Outlook (REO) for Sub-Saharan Africa and a roundtable on “The Impact of Fuel Price Shocks in Mozambique.”
According to the official, the region is facing a new external shock at a time when it is still trying to consolidate the economic recovery of recent years.
“As you know, the region has been hit by yet another external shock, worsened by the reduction in official development assistance, which adds to the numerous shocks experienced in recent years,” she said.
The IMF notes that uncertainty surrounding the global economy has increased significantly following the outbreak of the new conflict in the Middle East, leading to rising commodity prices—particularly oil and fertilizers—with a direct impact on production costs and the cost of living.
“We are seeing fertilizer prices surge and also oil prices, which we are all feeling,” Harrison stated.
The institution considers that worsening global financial conditions could also increase exchange rate pressures, reduce private investment, and raise borrowing costs for several African countries, including Mozambique.
“The recent increase in the prices of oil, gas, and fertilizers, along with other disruptions stemming from the shock, is weighing on expectations,” she stressed.
According to the report, economic growth in Sub-Saharan Africa is expected to slow to 4.3% in 2026, 0.3 percentage points lower than previously forecast. The IMF expects the impact to be particularly felt in low-income countries and fragile states.
“Growth is expected to accelerate in oil-exporting countries (…), but to slow in low-income countries and fragile states, as seen in Mozambique,” the Fund’s representative said.
The institution also warned about the risks associated with a possible escalation of the Middle East conflict. According to the IMF, another rise in international prices of oil, fertilizers, and food could put pressure on inflation, reduce economic growth, and worsen social challenges in the region.
In addition to external risks, the Fund highlighted that the reduction in official development assistance is creating new challenges for more vulnerable African countries. Estimates presented suggest that bilateral aid to Sub-Saharan Africa may have fallen by between 16% and 28% in 2025, while humanitarian aid has declined even more sharply.
In this context, the IMF calls for the continuation of prudent macroeconomic policies, the protection of vulnerable groups, and stronger capacity for countries to mobilize domestic resources and respond to future economic shocks.
“In a context of reduced aid and growing uncertainty regarding global economic policies, resilience will increasingly have to be built domestically,” Harrison concluded.
Source: Diário Económico
