The Mozambican Minister of the Economy and Finance, Max Tonela, announced today in Maputo that the IMF board approved the much-anticipated program that marks the fund return to the country.
The IMF Board of Directors approved an agreement under the extended credit facility in the amount of 340.8 million Special drawing rights (SDR), roughly US$470M for Mozambique, of which some US$94M were said to be available for immediate withdrawal. The three-year agreement will help to support the country’s economic recovery, and policies to reduce public debt and financial vulnerabilities while creating conditions for priority investments in human capital, climate, and infrastructure.
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The funds’ program will support the government in their reform agenda, with key policy measures focusing on creating a sovereign wealth fund to manage the country’s LNG wealth, increase tax revenue, consolidate public finance management and strengthen governance.
According to the IMF, Mozambique’s economy has been showing a moderate economic recovery. During the crisis, the per capita poverty index was well mitigated by welfare and social protection measures implemented by the country with international support, although registering a slight increase from 61.9% in 2019 to an estimated value of 63.3% in 2020.
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The country’s outlook is positive in the medium term, with the IMF estimating an annual economic growth of 4%, excluding the extractive and liquefied natural gas (LNG) industries – which are expected to show even higher rates of global growth related to larger gas projects which should begin some production towards the end of this year.
