Enhancing GDP growth - Mozambique Stock Exchange calls for product diversification
Maputo view. File photo: O País
A mission of International Monetary Fund (IMF) technicians has been in Maputo since Tuesday for another round of supervision in the country. The staff of this international financial institution will make a two-week visit.
Officially the IMF’s agenda is unknown, but a reliable source for the Bretton Woods institution’s offices in the Mozambican capital, told O País that the visit’s agenda is to analyse the recent developments in Mozambique.
The mission of this international financial institution to Maputo comes at a time when the country is experiencing new “soft breezes” in the main macroeconomic indicators, that is, the gradual growth of the economy., O País reports.
Just to illustrate signs of economic recovery in the country, Gross Domestic Product (GDP) grew 3.4% from January to September this year, despite the above-normal rains that fell in the first quarter and affected the implementation of the State Budget, especially in agriculture, writes O País.
It is recalled that the previous visit of an IMF mission to the country occurred between July and August 2018, in a mission led by Ricardo Velloso, which aimed to provide contributions to the preparation of next year’s State Budget (OE) .
At the time, the IMF recommended eliminating Value Added Tax (VAT) exemptions, except for basic food basket items and strengthening the administration of this tax. On the expenditure side, the IMF mission advised reducing the size of the payroll as a percentage of the Gross Domestic Product (GDP) through moderate wage increases, particularly for the better-paid sectors of the public sector.
The mission of the International Monetary Fund also stressed the importance of continuing to limit other items of expenditure through better prioritisation, including public investment expenditures.
In view of public indebtedness, the IMF encouraged the Maputo Executive to make maximum use of external financing through donations and highly-concessional credit, while ensuring that the issuance of debt guarantees strictly follows the new approval procedures established in December 2017.
By Edson Arante
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