The three-year Mozambique agreement with the IMF aims to support the country’s economic recovery, debt reduction, and financing vulnerabilities, while promoting inclusive growth through structural reforms.
According to the IMF’s review, based on the program’s performance, the government has taken substantial measures to resolutely address macroeconomic challenges and fully comply with the program’s requirements, particularly maintaining a fiscal outlook aligned with the established targets. Mozambique’s economic growth is projected to increase in 2023, driven by liquefied natural gas (LNG) production, agricultural activities, and services.
Although LNG investments are fuelling the current account deficit, an improvement in the current account balance is expected in the future, driven by increased LNG exports and moderation in food and energy imports. The program’s performance has been largely favorable in the areas of fiscal governance and anti-corruption efforts.
The IMF’s second review of Mozambique’s Extended Credit Facility agreement marks another significant milestone in the country’s economic recovery journey. The disbursement of $60.93 million will provide crucial support to the government’s budget, aiding in the implementation of key reforms and mitigating financial vulnerabilities.
The Extended Credit Facility agreement, spanning three years, is designed to strengthen Mozambique’s economy, enhance debt sustainability, and promote inclusive growth. By addressing macroeconomic challenges and adhering to the program’s requirements, the government has demonstrated its commitment to fostering a stable economic environment.
Mozambique’s economic outlook for 2023 is promising, bolstered by the growth drivers of liquefied natural gas production, agricultural activities, and services. These sectors are expected to contribute significantly to the country’s overall economic expansion, attracting investments and generating employment opportunities.
While the current account deficit has been influenced by investments in liquefied natural gas, there is optimism regarding future improvements. The anticipated increase in LNG exports, coupled with a moderation in food and energy imports, is projected to enhance the current account balance, reducing external vulnerabilities.
Furthermore, the IMF’s review highlights the commendable progress made by Mozambique in areas such as fiscal governance and anti-corruption. These achievements are crucial for fostering a transparent and accountable economic system, attracting foreign investment, and bolstering investor confidence.
Going forward, it is imperative for Mozambique to remain committed to the agreed-upon reforms and maintain the momentum of economic recovery. Continued efforts in fiscal discipline, structural reforms, and anti-corruption measures will be vital in ensuring sustained growth and long-term stability. The successful completion of the second review of the Extended Credit Facility agreement is an encouraging milestone for Mozambique. It reflects the country’s commitment to implementing necessary reforms and consolidating its position on the path to economic resilience and prosperity.