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IMF board approves first review of Mozambique’s financial program

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The effectiveness of the program was high, all quantitative goals and structural benchmarks should be achieved by June 2022,” said the Deputy Director of the IMF.

JIM LO SCALZO/EPA

The effectiveness of the program was high, all quantitative goals and structural benchmarks should be achieved by June 2022,” said the Deputy Director of the IMF.

JIM LO SCALZO/EPA

The International Monetary Fund (IMF) announced on Tuesday that it had approved the first review of Mozambique’s financial regulation program, which allows almost $60 million to be released, given that the targets have been met.

“The program performance criteria, indicative goals and structural milestones for the end of June 2022 were met; monetary policy outlook and pre-emptive tightening from early 2021 fit to deal with the projected rise in inflation“, the IMF wrote in a note announcing board approval of the first review of the Extended Credit Facility (ECF).

The approval of the first review of the three-year program approved in May of this year represents immediate payment of USD 59.2 million [quase 58 milhões de euros]out of a total of $456 million [443 milhões de euros] included in the financial adjustment program, from which Mozambique has already received about 150 million US dollars, that is, 145 million euros.

🇧🇷Growth expected to accelerate in 2022with the strengthening of the economic recovery, despite the deteriorating international economic environment and rising commodity prices, reflecting the active vaccination campaign and the complete lifting of restrictions against Covid-19 in July 2022,” the statement said. .

Among the main risks to achieve the goals of the program IMF highlights rising priceswhich has already led to double-digit inflation, social unrest, terrorist activity in the north of the country and natural disasters, which, however, are offset by a strengthening economic recovery, strong prospects for demand for liquefied natural gas and the possibility of higher-than-expected growth in other sectors of the economy in the medium term. perspective.

“The program’s performance has been high, with all quantitative targets and structural benchmarks to be achieved by June 2022,” wrote Foundation Deputy Director Bo Li, quoted in the statement.

“While the outlook for development remains positive, helped by major natural gas exploration projects, significant risks remain, including adverse weather events and volatile security situations; weak governance and debt vulnerability also pose challenges,” the official added, stressing that “in this context, continuous capacity building and donor support are still needed to enable Mozambique to achieve its development goals.”

The IMF note also notes the need for “additional efforts to mitigate revenue volatility, continue to strengthen public investment management, and integrate natural resource revenues into the broader budget framework.”

Source: Observador

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