Maputo — The Mozambican government and the International Monetary Fund (IMF) have reached an agreement on economic policies under which the Fund will disburse a further 55.9 million Euros (59.8 million dollars at the current exchange rate) in conclusion of the fourth evaluation of the country's assistance programme.
According to a statement from the Ministry of Economy and Finances, the Mozambican authorities and the IMF team reached a technical agreement on economic policies to finalize the fourth review of Mozambique's ECF [Extended Credit Facility] arrangement.
"Once approved by the IMF board and finalized by the executive board, Mozambique will have immediate access to 45.44 million Special Drawing Rights [59.8 million dollars at the current exchange rate]', reads the note.
The third appraisal of this 36-month programme, carried out in January, concluded by releasing the third tranche of 60.7 million dollars for budget support. At the time, total disbursements to Mozambique under this ECF totaled around 273 million dollars.
"A board meeting is planned for the first half of July. Following this fourth assessment, which took place in May in Mozambique, the IMF team concluded that the country's economic growth is projected at 4.3 per cent in 2024', says the document.
The note points that the growth of Mozambique's Gross Domestic Product (GDP) outside of the mining sector is expected to "accelerate from 2.2 percent in 2023 to 3.5 per cent in 2024, a moderate level as restrictive financial conditions continue to weigh on economic activity'.
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"The medium-term outlook for the extractive sector is strong, as major LNG [Liquefied Natural Gas] projects are expected to resume activity. Regarding the performance of the ECF programme with Mozambique, it was positive and the discussions with the Mozambican authorities had focused on key areas such as continued fiscal consolidation, which is vital for reducing domestic financing needs and containing public debt vulnerabilities', said the head of the IMF in Mozambique, Pablo Lopez Murphy.
"With inflation expectations well anchored, fiscal consolidation underway and weak non-mining growth, further gradual easing of monetary policy is justified. Sustained efforts to strengthen institutions, improve governance and increase transparency are important to reduce vulnerabilities to corruption, promote private investment, support domestic production and strengthen the position of the external sector', he said.
The document also points to the need to implement important reform measures in various areas in order to strengthen compliance with tax obligations, achieve more cost-effective provision of public services, improve the transparency of public contracts, protect the spending of the most vulnerable and improve the management and supervision of public companies.
