The Mozambican government expects to conclude a new financial assistance programme with the International Monetary Fund (IMF) by the end of 2026, in line with a timeline agreed between the two parties, the Finance Ministry announced on Thursday, 10 September, according to the Lusa news agency.
The forecast was issued following a meeting between Finance Minister Carla Loveira and an IMF delegation that began a working mission in Mozambique on Wednesday, 9 September, to deepen technical discussions on a potential financial support programme for the country.
According to the Finance Ministry, the mission is expected to lay the groundwork for the conclusion of a Staff Level Agreement and its subsequent submission to the IMF Executive Board for approval by the end of 2026.
Liquidity keeps pressuring budget execution
During the meeting, Carla Loveira acknowledged that, despite signs of economic recovery, liquidity challenges at the treasury level persist, affecting the government’s capacity to fully execute the national budget and meet debt service obligations within the established deadlines.
“The government is committed to creating the conditions to implement the measures of the fiscal consolidation package,” aligned with matters discussed during the IMF mission held earlier in 2026, the Finance Ministry stated.
The current mission runs until 18 September in Maputo, within the framework of technical discussions for the negotiation of a potential programme under the Extended Credit Facility (ECF) — a concessional IMF financing mechanism designed to support low-income countries facing structural imbalances and financing needs.
The IMF delegation is led by Pablo López Murphy and is expected to meet with representatives from various ministries, the Bank of Mozambique, the private sector, and financial institutions.
IMF wants a deeper look at the fiscal position and debt
According to the Finance Ministry, López Murphy expressed confidence that the discussions would proceed constructively, and indicated that the Fund’s team intends to deepen its analysis of recent fiscal developments, the debt management strategy, and the macroeconomic framework.
Discussions are also expected to focus on strengthening economic policies that could underpin a future ECF programme.
“The government is committed to creating the conditions to implement the measures of the fiscal consolidation package,” the Finance Ministry reiterated.
The government maintains a positive medium-term outlook for the national economy, particularly given ongoing reforms and the potential benefits associated with liquefied natural gas (LNG) projects.
In this context, the government highlighted the relaunch in January 2026 of the TotalEnergies Mozambique LNG project, as well as Mozambique’s recent removal from the Financial Action Task Force (FATF) grey list.
Negotiations resumed after the June mission
The current mission comes approximately three months after the IMF confirmed the start of discussions with Mozambican authorities on a formal request for financial support.
At the conclusion of the June mission, López Murphy — who also led the Fund’s team on that occasion — stated that discussions had focused on the government’s request for an IMF-supported programme and announced the team’s return to Maputo to deepen its analysis of the request and the authorities’ economic policy plans.
At the time, the IMF indicated that the talks covered measures aimed at restoring macroeconomic stability and public debt sustainability, including strengthening the fiscal position, protecting the most vulnerable groups, reinforcing monetary and exchange rate policies, preserving financial stability, and improving governance.
The Fund assessed that Mozambique was navigating a challenging economic environment, marked by moderate growth, accelerating inflation, fiscal and public debt vulnerabilities, and limited access to foreign exchange.
The IMF had also flagged risks associated with rising international prices for fuel and fertilisers, as well as the effects of recent climate shocks on the national economy.
In March, Mozambique made an early repayment of US$698.6 million to the IMF, corresponding to financing obtained under the Poverty Reduction and Growth Trust (PRGT).
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=539341
