Mozambique: IMF delegation begins talks with government – AIM report

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Mozambique: IMF delegation begins talks with government – AIM report

7:40 CAT | 16 Mar 2022

In file CoM

A delegation from the International Monetary Fund (IMF) began a five day mission to Mozambique on Monday, meeting with members of the government to discuss what a Mozambican government source described vaguely as “matters of mutual interest”.

The IMF delegation is headed by senior economist Álvaro Piris Chavarri. According to a report carried by the Portuguese news agency Lusa, it met with Mozambique’s new Minister of Economy and Finance, and among the matters discussed were projects in the hydrocarbon sector, social protection, the wage pyramid, money laundering, public probity, and value added tax (VAT).

Lusa’s source added that the discussions between the IMF and the government could culminate in signing a memorandum of understanding, opening the way to the resumption of IMF financial assistance to Mozambique.

The last IMF programme was suspended abruptly in April 2016 in the wake of the scandal of Mozambique’s “hidden debts”. The previous government, under former President Armando Guebuza, had kept the IMF in the dark about the scale of the country’s foreign borrowing.

Three fraudulent, security-linked companies – Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) – had obtained over two billion US dollars in loans from the banks Credit Suisse and VTB of Russia, on the basis of illicit loan guarantees, signed by the then Finance Minister, Manuel Chang.

When the full size of the loans became public knowledge, the IMF accused the government of concealing its true indebtedness, and suspended its programme. All 14 donors and funding agencies who had provided direct support to the Mozambique state budget halted all further disbursements. Six years later, direct budget support has not yet resumed.

The IMF delegation also met with the Minister of Mineral Resources and Energy, Carlos Zacarias, the Minister of Gender, Children and Social Welfare, Nyeleti Mondlane, the two deputy ministers of Economy and Finance, Amilcar Tivane and Carla Louveira, and Deputy Justice Minister Filimao Suaze.

Source: AIM