- The IMF and the Republic of Mozambique have reached a staff-level-agreement on economic policies and reforms to conclude the fourth review of the Extended Credit Facility (ECF).
- Mozambique has agreed to important reform measures, which will be implemented in several areas, aimed at strengthening tax compliance, achieving a more cost-effective provision of public services, improving procurement transparency, protecting spending for the most vulnerable, and improving the management and oversight of state-owned enterprises.
Washington, DC: An International Monetary Fund (IMF) team, led by Mr. Pablo Lopez Murphy, held in-person discussions with the Mozambican authorities in Maputo from May 2 to May 15, 2024, on the Fourth Review under the Extended Credit Facility (ECF) arrangement. After the visit, discussions continued virtually. This staff-level agreement is subject to IMF Management approval and Executive Board consideration. The arrangement was approved by the IMF Executive Board for SDR 340.8 million (about US$456 million) on May 9, 2022.
At the conclusion of the discussions, Mr. Lopez Murphy issued the following statement:
"The Mozambican authorities and the IMF team have reached a staff-level agreement on economic policies to complete the fourth review of Mozambique's ECF arrangement. Once approved by IMF Management and completed by the Executive Board, Mozambique will have immediate access to SDR 45.44 million.
"Mozambique's economic growth is projected at 4.3 percent in 2024. Non-mining GDP growth is expected to accelerate from 2.2 percent in 2023 to 3.5 percent in 2024, a moderate level, as tight financial conditions continue to weigh on economic activity. The medium-term outlook for the extractive sector is strong as large LNG projects are expected to resume activities.
"Performance under the program has been positive. Policy discussions focused on the following key areas:
"Continued fiscal consolidation is vital to reduce domestic financing needs and contain public debt vulnerabilities. With inflation expectations well anchored, ongoing fiscal consolidation, and weak non-mining growth, further gradual easing of monetary policy is warranted. Sustained efforts to strengthen institutions, improve governance, and enhance transparency are important to reduce corruption vulnerabilities, promote private investment, support domestic production, and strengthen the external sector position.
"Important reform measures, which will be implemented in several areas, are aimed at strengthening tax compliance, achieving a more cost-effective provision of public services, improving procurement transparency, protecting spending for the most vulnerable, and improving the management and oversight of SOEs.
"The team wishes to thank the Mozambican authorities for their constructive dialogue and strong cooperation to finalize the reform package in support of the completion of the fourth review. A Board meeting is expected in the first half of July."
