IMF acknowledges that new programme for Mozambique comes after instability and fiscal pressures

Login

Register

http://www.clubofmozambique.com/

IMF acknowledges that new programme for Mozambique comes after instability and fiscal pressures

1:36 CAT | 28 Apr 2025

File photo: Lusa

The International Monetary Fund (IMF) told Lusa on Saturday that the new aid plan for Mozambique comes at a time of increased challenges for the country, “including post-electoral instability and fiscal pressures”, and aims to strengthen macroeconomic stability.

“Although the form and objectives of the new program are shaped by the political priorities of the authorities, the IMF’s engagement with Mozambique aims to strengthen macroeconomic stability, support inclusive and sustainable growth and protect the most vulnerable,” an IMF spokesperson told Lusa by email, after being asked about the terms of the new aid plan announced last week.

“The request for a new program comes at a time of increased challenges, including post-electoral instability and fiscal pressures. We remain committed to working closely with the Mozambican authorities to navigate this complex environment and advance the country’s development agenda,” he concluded, without providing further details about the new plan.

The IMF and the Mozambican authorities have agreed to end consultations under the current aid plan and begin negotiations to design a new one, the financial institution announced on the 18th.

“In order to better align IMF support with the vision and priorities of the new Government, the Mozambican authorities have requested that discussions begin for a new IMF program. Discussions with the IMF teams will begin shortly,” the IMF statement reads.

In the same text, the Washington-based international organization stated that “the Mozambican authorities and the IMF teams reached an understanding not to proceed with subsequent reviews under the ECF [Extended Credit Facility]-supported facility”.

The ECF program was approved in May 2022 and provides for total financing of US$456 million (€416.2 million) to Mozambique, with four tranches already released.

The IMF argued in early March that Mozambique needs a “budgetary consolidation” in 2025 to ensure the sustainability of public accounts, given the significant budgetary slippage seen in the previous year.

In addition to significant budgetary slippages, Mozambique has experienced almost five months of social tension, with intense demonstrations, initially in protest against the election results of October 9 called by former presidential candidate Venâncio Mondlane.

Almost 400 people lost their lives in clashes with the police, according to data from civil society organizations, which also led to looting and destruction of public and private businesses and infrastructure.

The Mozambican government previously confirmed at least 80 deaths, in addition to the destruction of 1,677 commercial establishments, 177 schools and 23 health units during the demonstrations.
On March 23, Mondlane and the President of Mozambique, Daniel Chapo, met for the first time and a commitment was made to end post-election violence in the country, although, currently, mutual criticism and accusations continue in the public positions of the two politicians.

Source: Lusa