Mozambique: Country assures IMF it will amend Public Probity Law

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Mozambique: Country assures IMF it will amend Public Probity Law

4:06 CAT | 14 Jul 2023

The Mozambican government has assured the International Monetary Fund (IMF) that the country will amen the Public Probity Law to “improve governance,” official documents reveal.

“To improve governance and strengthen efficiency of public spending, we are planning to submit to Parliament an amendment to the Public Probity Law before end-June 2023,” reads a letter signed by the Minister of Economy and Finance, Ernesto Tonela, and the governor of the Bank of Mozambique, Rogério Zandamela, and sent to the Managing Director of the IMF, Kristalina Georgieva.

The letter is contained in the final report on the approval of the revision to the Expanded Financing Program (ECF) for Mozambique, released today. The announcement of approval of this revision to the ECF by the IMF was made on July 6, guaranteeing a disbursement of US$60.6 million (€54 million) to Mozambique, confirmed today by the institution.

The Public Probity Law came into force in Mozambique more than a decade ago. It aims to ensure morality, transparency, impartiality and respect in the management of state assets by public servants.

In the same letter, both officials assure the IMF that Mozambique is working to implement “the action plan adopted by the Financial Action Task Force (FATF) plenary, aimed at removing Mozambique frm the FATF ‘grey list’ regarding money laundering and terrorist financing.

“In particular, we plan to make adequate, accurate and up-to-date information on beneficial ownership publicly accessible at the centralised registry in line with FATF standards by end-2023. Moreover, we are advancing with extensive public financial management and revenue administration reforms, and pursuing a broad agenda of reforms in monetary, foreign exchange and central bank organisation,” the letter reads.

In the note accompanying the announcement of the approval of the second revision of the program approved in May 2022, which raises the total amount already received by Mozambique to US$212.09 million (€194 million), out of a total of US$456 million (€418 million), the IMF says it allowed two criteria not to be observed: the primary budget balance at the end of last year and the accumulation of external debts by the public sector.

In the macroeconomic forecasts for this year, the IMF foresees an acceleration of GDP growth in Mozambique from 4.2% in 2022 to 7% this year, anticipating that at the end of the year inflation will have dropped from 10.3% to 6.7% – the same as in 2021, but still almost double the previous two years.

The debt-to-GDP ratio should continue on a downward path, reaching 89.7% at the end of this year, an improvement compared to the 95.5% of GDP recorded last year.

Source: Lusa