IMF Deputy Managing Director Bo Li visits Mozambique, meets President in Maputo

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IMF Deputy Managing Director Bo Li visits Mozambique, meets President in Maputo

10:32 CAT | 17 May 2025

Photo: Presidency

The Deputy Managing Director of the International Monetary Fund (IMF), Bo Li, assured ton Saturday, in Maputo, that the institution will advance in the coming months with a new support program for Mozambique, to support the country’s stability.

“Our team will work together. In the coming weeks and months we will discuss a new program and we are committed to supporting the Mozambican economy to help maintain macroeconomic and financial stability”, said Bo Li, after being received by the Mozambican Head of State, Daniel Chapo, at the Presidency of the Republic, in Maputo.

According to a note from the Presidency, during the meeting, Bo Li reiterated the IMF’s willingness to continue supporting the Mozambican Government’s programs, “highlighting the progress made in terms of governance and structural reforms”. “We are impressed with the measures already adopted, in particular the rationalization of the government machinery and the vigorous fight against corruption, which are in line with the principles and expectations of the IMF,” said the director, quoted by the Presidency.

The visit by the IMF official represents “a sign of confidence from the international community in the reform efforts of the Mozambican Government,” led since January by Daniel Chapo, “and an opportunity to leverage new partnerships in favor of inclusive and sustainable growth,” emphasizes the Presidency.

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The IMF and the Mozambican authorities agreed to end consultations under the current aid plan and begin negotiations to design a new one, the IMF announced in a statement on April 18.

“To better align IMF support with the new government’s priorities and vision, the Mozambican authorities have requested the initiation of discussions for a new IMF program. Discussions with IMF staff will begin in the period ahead,” the statement reads.

In the same text, the Washington-based international organization states that ” the Mozambican authorities and IMF staff have reached an understanding not to proceed with the remaining Reviews under the ECF-supported arrangement [Extended Credit Facility]”.

The IMF was in Mozambique between February 19 and March 4 “to discuss the implementation of policy measures under the ECF mechanism”, and continued with meetings remotely.

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

On June 15, 2024, the IMF announced a “technical agreement” with the Government of Mozambique on economic policies to conclude the fourth review of the assistance program for the country, allowing for the disbursement of an additional €55.9 million (exchange rate at the time).

Previously, the third review of this 36-month program, carried out in January, concluded the third review, releasing the third tranche of US$60.7 million (€56.6 million) for budget support. At the time, total disbursements to Mozambique under this ECF amounted to around US$273 million (€254.7 million).

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

“Preliminary estimates suggest that there were significant fiscal slippages in 2024 that are in part explained by the slowdown in economic activity during the last quartier,” said Pablo Lopez Murphy, quoted in an IMF statement on March 5 on the review carried out in recent days of the ECF agreement.

“Fiscal consolidation in 2025 is necessary to secure fiscal and debt sustainability and preserve macroeconomic stability,” added Murphy, who led the IMF team and discussions with Mozambican authorities, including the President of the Republic and the Prime Minister, from February 19 to March 4, referring to the policies that underpin the fifth and sixth reviews under the ECF.

Source: Lusa