Mozambique: IMF may resume funding due to cyclone’s “severe economic impact”

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Mozambique: IMF may resume funding due to cyclone’s “severe economic impact”

5:13 CAT | 22 Mar 2019

Beira. Photo: Lusa

The International Monetary Fund (IMF) has agreed to “discuss some financial support” for Mozambique due to the “severe economic impact” expected in the aftermath of Cyclone Idai, Fund representative Ari Raisen said on Friday.

After expressing solidarity with the people of Mozambique, he stressed: “the IMF has always given technical and political assistance and we will have the opportunity to discuss some financial support”.

“It is too soon to assess all the financial and economic consequences of this disaster, namely to Mozambique’s inflation and growth, but a severe economic impact is expected”, Raisen added.

An IMF mission is to pay a working visit to Mozambique in March to assess the country’s macroeconomic development.

The IMF was one of the international organisations that suspended funding to Mozambique in 2016 following the investigation into the country’s hidden public debt, started by the US authorities.

According to the accusation, three state-owned companies in Mozambique, from fishing and maritime safety sectors, were used in a corruption and money laundering scheme involving US bank accounts.

Mozambique’s state coffers have lost $2.2 billion (€1.9 billion).

The IMF team is to finish their visit in the next two weeks.

The provisional death toll of Cyclone Idai points to 557 casualties, of which 242 in Mozambique, 259 in Zimbabwe and 56 in Malawi.

Overall, the storm has affected at least 2.8 million people and in Mozambique 1,300km2 are flooded, according to international organisations’ data.

More than a week has passed, and thousands of people are still awaiting rescue and relief.

With heavy rains and winds of up to 170km/h, Cyclone Idai reached Beira (central Mozambique) on the night of 14 March, leaving approximately 500,000 residents without power and communication lines.

Source: Lusa