Mozambique: Negotiations between the government and the IMF resume

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Mozambique: Negotiations between the government and the IMF resume

9:47 CAT | 14 Mar 2022

File photo: O País

Negotiations between the Mozambican government and the International Monetary Fund (IMF), on hold for a week due to changes in the government, have now resumed, IMF representative in Mozambique Alexis Meyer-Cirkel told ‘O Pais’ on Friday (March 11)

Meyer-Cirkel remains confident that the dossier will be closed by June.

The IMF agreed to a “technical break” to allow new Minister of Economy and Finance Max Tonela to take up the reins, but this will not compromise the deadline of the negotiations aimed at resuming direct funding to the State Budget, suspended with the discovery of the undisclosed debts of Ematum, Proíndicus and MAM.

Read: Mozambique: Government reshuffle pauses negotiations with the IMF

“The program framework that we are discussing remains the same, regardless of the person in charge of the Ministry,” Alexis Meyer-Cirkel said, while cautioning that everything depends on a common agreement being reached between the parties.

“When a program agreement is reached between the Fund team and the government, represented by the Ministry of Economy and Finance and the Bank of Mozambique, an extensive document explaining the joint view of the situation and macro-economic-fiscal projection is sent for approval by the IMF Executive Board, on which Mozambique is also represented. The Executive Board then decides on approval, and shortly thereafter the first tranche of funding is made available,” Meyer-Cirkel explained.

The suspension of support from the IMF and cooperation partners in 2016 cost Mozambique around 10.9 billion meticais that year. The state only started receiving direct support from the IMF and the World Bank again in 2020, in the shape of around 21 billion meticais support to respond to Covid-19.

By Clementio Fijamo

Source: O País