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Mozambique: IMF Mission Important Step in Normalising Relations, Says PM

Mozambican Prime Minister Carlos Agostinho do Rosario declared on Tuesday that the imminent arrival of a technical mission from the International Monetary Fund (IMF) to assess the macro-economic impact of the country’s public debt will be an important step in normalizing relations between Mozambique and its cooperation partners.

Those relations were seriously damaged in April, with the revelation that the previous government, led by President Armando Guebuza, had guaranteed secret loans totaling more than 1.1 billion dollars, contracted by the security-linked companies Proindicus and MAM (Mozambique Asset Management).

The undisclosed loans led the IMF to cancel the mission that was to have visited Mozambique in mid-April, and to suspend the second instalment of a 282 million dollar loan from the Fund’s Standby Credit Facility.

Interviewed by the BBC in late May, IMF managing director, Christine Lagarde, publicly declared that by not respecting the country’s financial disclosure agreement, the Mozambican authorities were “clearly concealing corruption”.

Other donors and funding agencies followed the IMF’s lead and suspended financial aid to Mozambique. These included the United States and the group of 14 donors that used to provide direct support to the Mozambican state budget.

Speaking in Maputo, at the opening of the Annual Assembly of the Organisation of Cooperatives from Portuguese speaking countries, Rosario said he hoped for a speedy return to normal in the relations between Mozambique and its partners.

Cited by the independent daily “O Pais”, Rosario said “We have shared the information. Now come the following steps for normalising relations with our international partners”.

He did not want to dwell on what had gone wrong in the past. “We have to look forward. The past is the past”, he said. “We have to have solutions because our country is rich in human and natural resources, and we are capable of going forward”.

Rosario stressed the importance of cooperatives as collectively owned enterprises which “are a space for the active exercise of citizenship, and a mechanism that generates a direct impact on improving the living conditions of communities”.

He stressed that, under Mozambican legislation, cooperatives, particularly those involved in agriculture, handicrafts and cultural activities, receive tax exemptions, notably a 50 per cent reduction in corporation tax.

The chairperson of the Organisation of Cooperatives of Portuguese Speaking Countries, Marcio Lopes de Freitas, of Brazil, said government should bank on cooperatives as an instrument to support development “particularly in moments of crisis”.

The cooperative model, he added, had shown that it was capable “of developing processes that mitigate crises”.

source: AllAfrica

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