Bank of Mozambique says IMF loan will stabilize economy

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Bank of Mozambique says IMF loan will stabilize economy

12:42 CAT | 17 Dec 2015

Lusa

The governor of the Bank of Mozambique argues that the recently announced US$286 million (EUR 261 million) IMF loan will help stabilize the country’s economy, which has been “badly shaken” by the international situation in 2015.

“This loan will contribute to the stabilization of the Mozambican economy,” central bank governor Ernesto Gove said on the sidelines of a 2015 economic balance sheet conference in Maputo.

“What is happening in Mozambique is a shock to the balance of payments arising from the falling commodity prices,” the governor said, adding that “the IMF must look at these cyclical aspects,” and help countries in such situations.

A fall in gas prices of 39 percent, of coal by 24 percent, heavy sands 18 percent, aluminium 6 percent, cotton 20 percent and shrimp 11 percent, have negatively affected the export earnings of Mozambique, which lives by sale of such products.

“The situation on the international market has not been the best for us. Total exports fell by 9.3 percent,” the governor said, adding that the foreign direct investment also decreased by 15.2 percent compared to 2014.

While admitting that it was a complex year for Mozambique, with the metical sliding against the dollar by more than 70 percent and natural disasters at the beginning and end of the year, Gove makes a positive assessment of 2015, while warning that the country consumes more than it produces, creating a “structural deficit in the balance”.

“Mozambique needs to harness its agricultural potential, along with energy, tourism and services, to secure a profound economic transformation,” the governor said, noting that increased production and productivity, export promotion and import substitution and the generation of employment are essential elements of the development framework.

Source: Lusa