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“Mozambican Economic Sovereignty is Being Alienated in Exchange for Concessional Financing”- NGO

“Mozambican Economic Sovereignty is Being Alienated in Exchange for Concessional Financing”- NGO

The Centre for Democracy and Development (CDD) says the Mozambican state is in a situation of bankruptcy, and dependent on loans to alleviate the economic crisis. This, according to the non-governmental organisation, means that “economic sovereignty, the most important of the social contract between Mozambicans and the State, [is] continuously alienated in exchange for grants and concessional financing.”
In a recently published text, the organisation recalls the financial crisis of the 1980s, and says that the current crisis was triggered by “hidden debts” – the country’s biggest financial scandal.

This indebtedness of the state has fortified the influence of Bretton Woods [the World Bank (WB) and the International Monetary Fund (IMF)] over Mozambique’s political, economic and social decisions, as it has no other viable option “but to submit to and comply with all the neoliberal prescriptions [of these two institutions]”.

“In reality, in addition to the socio-economic, institutional (deterioration of the political-institutional environment) and reputational costs (discrediting the country in the eyes of international partners), Mozambique’s biggest financial scandal has also created the unique opportunity for the WB and IMF to strengthen their influence on the economy and promote their engagement in political and highly sensitive areas.”

In the document, CDD said that with the funding of US$470 million from the IMF, “came a set of mandatoryconditions in the form of an ‘ambitious’ agenda of nearly two dozen reforms. Similarly, the WB grant of US$300 million “is conditional on an agenda of reforms to be implemented by the Government. More precisely, seven priority actions for the release of the grant and dozens of additional actions organised around three pillars.”

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“Contrarily, little can be expected in terms of reducing the financial dependence and influence of the IMF and World Bank in the country,” writes CDD.

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