IMF technical team to visit Mozambique in June

Login

Register

http://www.clubofmozambique.com/

IMF technical team to visit Mozambique in June

4:27 CAT | 19 May 2016

Mozambique’s Minister of Economy and Finance Adriano Maleiane said yesterday that a technical team from the International Monetary Fund (IMF) planned to visit the country in June.

“Negotiations between the Mozambican government and the IMF are going well. We have been exchanging information and working on the analysis of macroeconomic implications. Next month, a technical team from the IMF will visit Mozambique,” Maleiane told parliament’s Planning and Budget Committee.

The Minister of Economy and Finance said that the IMF’s assessment of the impact of public debt in the country’s growth projections was important, as investors and international partners follow the analysis of international financial institutions closely.

“We are working to quickly restore the confidence of investors and international partners,” Maleiane emphasized.

On the suspension of support from international partners to the state budget following the admission by the Mozambican government of the existence of debts not listed in public accounts, the Minister of Economy and Finance expressed confidence in the resumption of aid.

“What the partners said was that they had suspended support until the IMF took a position on the impact of debt. They [donor countries] are also, as are we, members of the IMF,” Maleiane emphasized.

Maleiane said international partners channel US$467 million to the state budget, equivalent to 12 percent, stressing that the contribution is not limited to the financial framework, but also covers counselling.

To address the budget deficit resulting from cuts in foreign state budget support, the minister continued, the country will seek to eliminate unnecessary expenditure and broaden the tax base without increasing the tax burden.

“In a containment situation, we must be able to access more internal resources, without increasing taxes. We need to broaden the tax base and avoid such expenditure as is avoidable,” Maleiane said.

Maleiane stressed that any austerity measures would not affect the key sectors of health, education and defence and security.

The government of Mozambique acknowledged at the end of April the existence of undisclosed debts totalling US$1.4 billion (EUR 1.25 billion), which it justified on national security grounds.

The revelation of loans government-guaranteed loans contracted between 2013 and 2014 led the International Monetary Fund to suspend the second installment of a pre-agreed loan to Mozambique and cancel a visit to Maputo.

The G14 group of state budget donors also suspended its payments, followed by the US, which announced this week that it would review its bilateral support to the country.

Including the recently disclosed loans, Mozambique’s public debt now stands at US$11.66 billion (EUR10.1 billion), of which US$9,890 million (EUR8.6 billion) is external. This represents over 70 percent of gross domestic product, up from the 2012 figure of 42 percent.

Source: Lusa