IMF approves US$456m facility for Mozambique

By Agence de Presse Africaine Last updated May 12, 2022

APA-Maputo The International Monetary Fund has approved a three-year Extended Credit Facility valued at about US $456 million to support Mozambique’ s economic reform programme, the Fund said on Wednesday. In a statement, IMF deputy managing director Bo Li commended the Mozambican government for pursuing an extensive reform agenda, including…

APA-Maputo (Mozambique) The International Monetary Fund (IMF) has approved a three-year Extended Credit Facility (ECF) valued at about US$456 million to support Mozambique’s economic reform programme, the Fund said on Wednesday.

In a statement, IMF deputy managing director Bo Li commended the Mozambican government for pursuing an extensive reform agenda, including strengthening the management of state-owned enterprises and their debts, improving fiscal risk management and debt transparency, and strengthening public financial management and the anti-corruption framework.

“The new three-year ECF arrangement of 150 percent of quota (SDR 340.8 million or about US$456 million) aims to buttress the economic recovery and policies to reduce public debt and financing vulnerabilities, along with creating fiscal space for priority investments in human capital, climate adaptation and infrastructure,” Li said.

It is also expected to catalyze additional financing by development partners, he added.

The IMF suspended budgetary support to Mozambique in 2016 after one of the country’s biggest corruption scandals came to light, involving secret loans amounting to over US$2 billion that were granted by foreign banks to public companies and guaranteed by the state.

The Bretton Woods institution has only granted emergency aid following the deadly Cyclone Idai in 2019 and the advent of COVID-19 in 2020.

The lack of budgetary support has seen Mozambique defaulting on its foreign debt commitments and plunging into a serious financial crisis.

JN/APA