Mozambique will sign a new programme with the IMF, "with a new vision"
Mozambique: Resumption of IMF financial aid ‘great gain’ for country – president
12:07 CAT | 29 Mar 2022
Photo: Frelimo Moçambique
Mozambique’s president, Filipe Nyusi, has hailed as a “great gain” the resumption of financial assistance from the International Monetary Fund to the African country, which had been suspended since the so-called ‘hidden debts’ scandal broke in 2016.
“This is a great gain for us: they already trust us,” Nyusi told officials of his governing Frelimo party in the southern province of Inhambane, in audio released on Tuesday by his office.
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Mozambique’s hidden debts scandal – involving upwards of $2 billion (€1.8 million) in loans taken out by public enterprises with state guarantees, all unbeknownst to parliament and the country’s creditors – plunged the country into an unprecedented financial crisis.
The head of state said that the agreement with the IMF foresees the disbursement of aid worth $470 million, the amount mentioned on Monday by the head of the IMF mission to Mozambique, Álvaro Piris.
“It is a programme that will accelerate the economic recovery of Mozambique, particularly because of Covid-19, terrorism and natural disasters,” stressed Nyusi.
The instrument approved by the IMF is aimed at ensuring the rapid recovery of Mozambique’s economy and is based on the promotion of good governance, the fight against corruption, macroeconomic stability and debt control, the president said, arguing that resumption of IMF assistance would encourage other of the country’s partners to cooperate with it.
“Nobody was giving us anything” after the emergence of the hidden debts and “I was known as the President of the country of thieves,” said Nyusi.
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This is the first time that the IMF has provided finance to Mozambique since the hidden debts scandal broke in 2016. There has been only occasional aid initiatives following specific disasters, such as the Covid-19 pandemic and the 2019 cyclones, Kenneth and Idai.
“In recent years Mozambique has been affected by a series of severe shocks that risk intensifying vulnerabilities and worsening socioeconomic conditions,” said the IMF, citing in particular the rebel attacks in the north, which have displaced over 800,000 people and delayed the development of liquefied natural gas projects.
The programme now unveiled aims to “focus on growth, fiscal sustainability and reforms in governance and public finance management, balancing financing with moderate adjustment that will rebuild fiscal space and reduce debt and financial vulnerabilities,” it added.
Among the reforms agreed at meetings led on Mozambique’s side by the prime minister, Adriano Maleiane, the IMF highlighted “a series of fiscal reforms and policy relative to VAT” – valude-added tax – and stressed that “an important step will be the approval of a sovereign fund” as well as the creation of a strong institutional framework for managing the revenue generated by the exploitation natural resources, with the initial focus on liquefied natural gas.
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Source: Lusa
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