Mozambique: Export revenues from manufacturing industry increased 15.6% in Q2
DW (File photo)
Concerning the International Monetary Fund mission coming to Maputo to talk about a new program for the country, analyst Fernanda Massarongo believes that partners will regain confidence, although there are still many questions to be answered.
The arrival of an International Monetary Fund (IMF) mission to discuss a new program is a good sign, according to Massarongo, a researcher at the Institute of Social and Economic Studies (IESE) in Maputo. “Mozambique may be restoring a level of confidence” in key international partners, he says.
Since the partners suspended direct aid to Mozambique due to hidden debts guaranteed by the previous Mozambican government, regaining lost confidence has been one of the government’s main concerns.
Maputo has taken several measures. In addition to requesting debt restructuring, it has hired an external auditor to assess the hidden loans of the Mozambican Tuna Company (Ematum), Mozambique Asset Management (MAM) and Proindicus. The strategy seems to be working. In June, an IMF mission visited Mozambique and spoke of “solid progress”; in mid-November, it gain praised the country, welcoming the government’s “correct measures” while encouraging Maputo to do more.
But there are still many unanswered questions – about the debts and about the audit itself. In an interview with DW Africa, Massarongo bemoans, for example, that the terms of the external audit have not been made known to the public, contrary to what happened with the parliamentary commission of inquiry into the public debt, which released information on the process.
DW Africa: Is this visit by the International Monetary Fund a good sign?
Fernanda Massarongo (FM): I think so. Mozambique may be restoring its level of trust among key international partners at a time when its credibility is very low.
DW Africa: Has the Mozambican government done its homework?
FM: Yes. Right now, its main homework is related to the audit report of the so-called “hidden” public debt. The government has agreed to the audit, the company that will do it has been hired – so I think the homework given and expected by the IMF is being done. However, the IMF made it very clear that the actual resumption of programs with the Government will take place after [the disclosure of] the audit results.
DW Africa: In other words, would you say that Mozambique is on track to restore creditor confidence?
FM: Probably in part. But I think that the creditors’ confidence is not independent of the confidence of Mozambican civil society. Obviously, we can say that Mozambique has implemented macroeconomic policies very much within the framework laid out by the IMF. For that reason, the mission itself praises measures that have been taken by the Bank of Mozambique [central bank] recently, such as restrictive monetary policy measures to maintain currency stability and control inflation. These measures are encouraging creditors, especially the IMF. And this, together with the audit, is probably behind the possibility of resuming a program. But, from the point of view of civil society, many questions are posed around the measures themselves, in terms of the rise of the cost of living domestically…
DW Africa: What issues would you like to see answered by the Mozambican government?
FM: Certainly the clarification on the contours of public debt, besides knowing in detail which issues are being investigated, through the [audit] terms of reference. What are the implications and measures that will result from these terms of reference from the internal point of view, from accountability? Because one aspect that the IMF made very clear is that this audit is much more about clarifying the contours and financial mechanisms behind the debt’s contraction, to see if there is still money in place and try to recover some. But, from the Mozambican point of view, there are other issues that weigh, such as accountability.
DW Africa: So everything will depend on the outcome of this audit.
FM: The audit result will be critical. Many of Mozambique’s international partners and creditors are waiting for the outcome, not just the decision to move forward with the audit.
DW Africa: If the result is not favourable for the previous Mozambican government, what could happen?
FM: It is hard to predict. That is why resuming the program with Mozambique without the results [of the audit] is already being questioned. It is still a mystery. It is not known whether there will be accountability or not. But I think that, depending on the results, if the IMF agrees with the measures that the government takes at the macroeconomic level, combined with these results, credibility with the IMF will probably be re-established. But I think we are all asking this question.
Leave a Reply
Be the First to Comment!
You must be logged in to post a comment.
You must be logged in to post a comment.