Mozambique: IMF suggests improvements to public investment management

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Mozambique: IMF suggests improvements to public investment management

2:54 CAT | 17 Dec 2024

File photo: Reuters

In a report on ‘Public Investment Management Assessment’, conducted at the request of the Ministry of Economy and Finance of Mozambique, the IMF acknowledged that Mozambique has taken steps to improve these policies, namely with the medium-term fiscal framework (Cenário Fiscal de Médio Prazo, CFMP ) being published ahead of budget preparation.

However, it concluded that it is also necessary to “introduce climate considerations into the major projects in the forthcoming national planning cycle” in Mozambique, as well as “improve climate-related information in project appraisal and building codes”.

The IMF further recommends that Mozambique “ensures that ongoing investment projects are pursued during budget implementation”, and argues that it is necessary to “improve the fiscal framework for sustainable public investment expenditure” and “consider implementing fiscal rules, and continue enhancing the fiscal risks report”.

Another recommendation contained in the IMF assessment is to “strengthen cash management and commitment controls to ensure projects’ expenditures are within budget and invoices are paid in due time to prevent arrears”, while it also advocates improvements in the fiscal framework “for sustainable public investment expenditure”.

“Consider implementing fiscal rules, and continue enhancing the fiscal risks report,” it also suggests.

After consultations for this assessment with the Mozambican government in the first quarter of 2024, the IMF advocated a “quantitative analysis of natural disasters related to fiscal risk” as one of the measures “to achieve greater infrastructure development and improve its efficiency, also considering climate change.”

Mozambique is considered one of the countries most severely affected by climate change in the world, facing cyclical floods and tropical cyclones during the rainy season, which runs from October to April.

On Sunday, Cyclone Chido crossed the provinces of Nampula and Cabo Delgado, causing, according to preliminary reports, at least 28 deaths.

The 2018/2019 rainy season was one of the most severe in Mozambique’s history: 714 people died, including 648 victims of cyclones Idai and Kenneth, two of the worst ever to hit the country.

In the first half of 2023, heavy rains and the passage of Cyclone Freddy caused 306 deaths, affecting more than 1.3 million people and destroying 236,000 homes and 3,200 classrooms, according to government figures.