Just in: IMF approves resumption of State Budget support | Mozambique

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Just in: IMF approves resumption of State Budget support | Mozambique

8:22 CAT | 09 May 2022

Photo: O País

The International Monetary Fund (IMF) has just announced approval of the resumption of its support to Mozambique’s State Budget. The IMF’s Mozambique financing program will last for three years.

This resumption of direct state budget support by the IMF takes place six years after its suspension following the discovery of the so-called ‘hidden debts’.

The implementation of the support program will start in June, prioritising the improvement of public debt management and the implementation of macro-economic, fiscal and structural reforms promoting better governance and greater transparency in the management of public finances.

“The program also provides for the improvement of the budgetary space for the financing of social protection programs, covering over 30,000 households per year, with an impact on the lives of 150,000 people,” Minister of Economy and Finance Max Tonela told a press conference this Thursday.

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IMF staff reaches staff-level agreement on an extended credit facility arrangement with Mozambique – Unabridged

In turn, the IMF resident representative for Mozambique, Alexis Meyer Cirkel, said that the global amount to be made available will stand at US$470 million, as previously foreseen.

The IMF program will also support the creation of a sovereign wealth fund, an instrument that will help Mozambique manage revenues from the exploitation of mineral resources, especially of liquefied natural gas (LNG) in the Rovuma basin, Cabo Delgado province, in the north of the country.

The interest rate on the IMF’s US$470 million support is zero percent. The debt will start to be repaid in five-and-a-half years, and must be settled within ten years.

ALSO READ: Mozambique: Government expects IMF program to start in June – Tonela

Watch the TVM report.