Africa News Bulletin

Mozambique could have new IMF credit facility by middle of year

Mozambique may have a new programme with the International Monetary Fund (IMF) by the end of June if the meetings underway since Monday are successful, a source from the fund in Maputo told Lusa on Wednesday.

“If the negotiations are successfully concluded in the coming weeks, we believe there could be an approval by the IMF Executive Board before the middle of the year,” said an official source in response to questions posed by Lusa.

Álvaro Piris is representing the IMF during the current mission to Maputo, which is taking place mainly in a virtual format, “however, with the continued support of the IMF representative office in Mozambique.

As advanced on Tuesday, the aim is to “negotiate a new funding programme – ECF (Extended Credit Facility),” the same source added, and “the agenda follows the needs for discussions and for now there is no specific date for completion.

On the table and under discussion with Mozambique are “a number of reforms planned in the areas of natural resource management, governance and improvements in public financial management.

The IMF had announced in December that negotiations on an Extended Fund Programme would kick off at the end of January.

“A Fund-supported programme can help ease financial pressures in a context of economic recovery, support the authorities’ agenda to reduce poverty and restore equitable and sustainable growth,” it argued at the time.

The IMF was one of the partners to suspend direct aid to Mozambique in 2016 following the discovery of the state’s $2.7 billion (€2.4 billion) hidden debt scandal.

Financial injections to government coffers resumed in the form of post-cyclone aid in 2019 and to address the pandemic in 2020.

Original story on Club of Mozambique

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