The International Monetary Fund (IMF) has stressed the importance of Mozambique maintaining fiscal consolidation and easing monetary policy in order to reduce debt requirements. In a recently released report, the IMF emphasized continued fiscal consolidation as crucial to reducing financing needs and controlling public debt vulnerabilities.
With inflation expectations well anchored and weak growth in the non-mining sector, the IMF recommended easing monetary policy as an important measure. In addition, the report pointed to the continued need to strengthen institutions and governance in order to limit vulnerabilities to corruption and promote private sector development.
However, the IMF recognized the challenges faced by Mozambique, including capacity constraints and lengthy legislative processes. In response to these issues, the IMF announced modifications to some performance criteria under the fourth review of the Extended Credit Facility (ECF) program. These modifications are aimed at ensuring the effectiveness of the program in the face of existing restrictions in the country.
The report also highlighted the implementation of structural reforms in key areas such as governance, debt management, wage bill control and the management and supervision of public companies. These reforms are considered essential to strengthen Mozambique’s economy and promote sustainable growth.
Recently, the IMF approved the third review of the financing program for Mozambique, guaranteeing an “immediate disbursement” of 60.7 million dollars for budget support. With this disbursement, the total financing granted to Mozambique amounts to 273 million dollars, signaling the IMF’s continued commitment to supporting the country on its path towards sustainable economic development.
