Mozambique: IMF approval of second ECF review shows country on track – ministry

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Mozambique: IMF approval of second ECF review shows country on track – ministry

7:00 CAT | 10 Jul 2023

File photo: O País

Mozambique’s Ministry of Economy and Finance said on Friday that the approval by the International Monetary Fund (IMF) of the second review of its Extended Credit Facility (ECF) for the country is a demonstration that it is “on a good path.”

On Thursday the IMF approved the second review of the ECF for Mozambique, ensuring a disbursement of $60.6 million (€55.3 million), and revised its forecast for growth in gross domestic product this year to 7% from the previous 5%.

The measure “means that the country’s economy is on a good path,” the national director for economy and development at Mozambique’s Ministry of Economy and Finance, Enilde Sarmento, in comments to Lusa on the IMF’s announcement.

“It means that the IMF looks favourably on the government’s programme, the measures and reforms that the government has been implementing to achieve the ultimate development of inclusive economic growth and macroeconomic stability,” Sarmento emphasised.
The decision, she said, was also a good sign in terms of global financial markets, for investors to view Mozambique with optimism.

In the announcement, the IMF said that “in light of the mixed programme results, the authorities [in Mozambique] have taken substantial steps to resolutely address macroeconomic challenges and keep the programme on track, particularly with regard to reducing the wage bill and aligning the fiscal outlook with the programme objectives.”

In the note accompanying the announcement of its approval of the second review of the programme approved in May 2022, which now brings the total amount already received by Mozambique to $212.09 million (€194 million) out of a total of $456 million (€418 million), the IMF said that it had allowed for non-compliance with two criteria: the primary budget balance at the end of last year and the accumulation of external debt by the public sector.

Source: Lusa