Mozambique: Government confident in country’s economic growth

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Mozambique: Government confident in country’s economic growth

3:10 CAT | 12 Apr 2022

FILE PHOTO - For illustration purposes only. [File photo: Lusa]

The Mozambican Minister of Economy and Finance said on Monday that the prospects for economic growth in Mozambique remain positive, despite the frequency and intensity of natural disasters, Covid-19, terrorist attacks and the war between Russia and Ukraine.

Minister Max Tonela was speaking during a meeting with Kevin Urama, Vice President for Economic Governance and Knowledge Management at the African Development Bank (AfDB), who is in Maputo for meetings with Mozambican leaders.

Minister Tonela highlighted the executive’s commitment to reforms aimed at ensuring inclusive and sustained economic growth, strengthening macroeconomic management and building resilience in the face of structural challenges.

In this regard, the minister said, the government recently reached an agreement with the International Monetary Fund (IMF) for cooperation in the field of reforms which Maputo intends to initiate.

“Our engagement with the Fund, while important in meeting the country’s immediate budget financing needs, will play a catalytic role in unleashing support from other development partners, including the World Bank and the European Union,” Tonela stressed.

The Minister of Economy and Finance signalled the desire to see the AfDB resume budget support for the country. The AfDB, he said, is a strategic development partner, which has contributed to meeting Mozambique’s development needs through a wide range of financing instruments.

“The government appreciates the AfDB’s firm response to the country’s reconstruction efforts following the devastating impact of Cyclones Idai and Kenneth,” Minister Tonela said.

He also welcomed the support to Mozambique’s ability to deal with the economic and health shocks caused by the Covid-19 pandemic.

For his part, Kevin Urama said he felt that “the Mozambican economy has made some good progress in recent times, despite some headwinds, due to internal and external factors”.

“After a 1.2% contraction in real GDP growth in 2020, due to Covid-19, the economy grew by 2% in 2021, with a stable outlook for 2022 and 2023,” Urama noted.

The favourable signals emanating from the Mozambican economy are anchored in the ongoing recovery in the main economic sectors, namely agriculture and mining, he added.

The AfDB predicts that Mozambique will grow 3.3% this year and 4.0% in 2023. “These projections are subject to accelerated vaccination to contain the Covid-19 virus, restoration of security in the northern provinces, accelerated completion of liquefied natural gas projects and continued implementation of growth-enhancing policies in all key sectors,” Uruma pointed out.

Source: Lusa