Mozambique-IMF agreement a must – Former finance minister Magid Osman

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Mozambique-IMF agreement a must – Former finance minister Magid Osman

3:43 CAT | 11 Jul 2016

File photo / Former minister of Economy and Finance of Mozambique Magi Osman

Economist and former finance minister Mozambique Magid Osman says the country needs to reach an agreement with the International Monetary Fund (IMF) to restore macroeconomic stability and investor confidence and, above all, protect people’s savings.

Osman argued that an agreement with the IMF would complement the austerity measures recently adopted by the government to overcome a crisis which combines economic recession, devaluation of the national currency the metical and high rates of inflation.

“If we do not use this crisis to enact deeper reforms, the efforts made will have been a waste. If we just have an austerity program, there will be no growth and more debt will be needed. In which case, the debt will become increasingly unsustainable because it will be denominated in US dollars,” Osman said.

Osman was speaking recently in Maputo at a round table organised by the Polytechnic University on the theme “How to restore optimism and confidence in Mozambican society”.

According to him, it is possible to achieve short-term macroeconomic stability by mid-2017, with inflation under control and the metical stabilised, but first and foremost, it is “necessary to adopt rules leading to a new form of development, so that the country has a new economic paradigm”.

Mhoje_magidosman_photo_jpg — From left to right: Carlos Lopes, Lourenço do Rosário, Magid Osman

Speaking at the same occasion, the executive secretary of the Economic Commission of the United Nations for Africa, Carlos Lopes, argued that Mozambique must establish the true composition, structure and size of its economy, in addition to restoring peace and stability, the two elements essential for there to be economic growth.

The event was moderated by Lourenço do Rosário, dean of the Polytechnic University, for whom the subject of restoring optimism and confidence in Mozambican society explicitly referred to “the country’s need to restore the role of universities”.

“We have been travelling parallel to the great nation’s debates, in which we are duty bound to participate actively, as they concern us all. We must contribute to the construction of a narrative based on knowledge,” Lourenço do Rosário said.

Source: Notícias