IMF to inject further 60 million dollars to support state budget

Maputo, 17 Nov (AIM) – The International Monetary Fund (IMF) has pledged to provide a further 60 million dollars in support of the Mozambican State Budget, under the Extended Credit Facility.

This will bring total IMF support for the state budget to 280 million dollars.

According to the IMF’s resident representative, Alexis Meyer, who was speaking at a seminar entitled “Resilient Mozambique: Recent Milestones in Capacity and Financial Development”, held in Maputo, the disbursement of this sum depends on the conclusion of a report that is being carried out by the IMF.

Meyer also said that Mozambique has made significant progress in the management of public finances, including the modernization of financial institutions, the introduction of the Single Treasury Account (CUT) and the fiscal decentralization law, among other measures.

“Thinking about the national situation, we’ve practically got November underway, we’ve got a month and a half to go until the end of the year, so the question of growth is more an accounting of what has already happened”, he said, adding that “ Mozambique maintains its projections for the growth of the Mozambican economy at six per cent.”

The economy, Meyer said, is growing because of natural resources, although a little slower in the construction and manufacturing sectors.

Meyer also explained that domestic debt continues to increase due to the reduction in external financing to Mozambique, as well as to other countries in the region.

The IMF’s Technical Coordinator, Esther Palácio, said that the consolidation of the central government’s main public finance management functions, budget planning, execution, accountability and auditing, are the sectors with significant improvements.

For his part, the Minister of Economy and Finance, Max Tonela, said that in recent times the growth of the Mozambican economy has been affected by internal and external shocks that put pressure on the complex challenges of managing the public finances.

“Within this framework, the government has been responding to these challenges with reform initiatives aimed at improving macroeconomic stability in the medium and long term, and also promoting more robust inclusive growth, strengthening governance, transparency and creating better conditions to promote private investment which generates a multiplier effect”, the minister said.

The recent macroeconomic indicators place the Mozambican economy on a recovery trend, with a growth rate in the gross domestic product of 4.1% in 2022, higher than initially projected.

(AIM)

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