The International Monetary Fund (IMF), development partners, senior officials from the Ministry of Economy and Finance, and the Bank of Mozambique came together yesterday in Maputo for a seminar reflecting on the major advances made in improving public financial management and the operational framework of the central bank in recent years.
Notable progress has been achieved in public financial management with technical assistance supported by the Swiss State Secretariat for Economic Affairs (SECO). Key reforms have included adopting new laws governing the state financial management system, state-owned enterprises, fiscal decentralization, and the single wage table. Expanding the e-SISTAFE financial management system and Treasury Single Account (TSA), along with strengthening public institutions, have improved governance, transparency, accountability, and fiscal discipline.
Macro-fiscal forecasting has advanced through enhanced projections for the extractive sector, lending credibility to the budget. Budget execution has improved through real-time expenditure controls, limits on quarterly commitments, and direct TSA payments to most beneficiaries. Investment planning has become more efficient and effective by adopting clear project selection rules, including climate considerations. New units have been established to analyse fiscal risks and public debt reporting has expanded.
On the revenue side, tax payments via banks, linkages with e-SISTAFE, risk-based auditing, and an updated taxpayer registry have broadened the tax base and reduced exemptions.
Regarding central bank operations, IMF technical assistance supported by Norway’s Norges Bank has helped sophisticate policy analysis and forecasting tools to enable evidence-based decisions. Communication has improved by establishing a monetary policy committee calendar and timely policy announcements. New monetary policy instruments like repos have stimulated the money market. Financial stability has been enhanced through publishing annual reports and adoption of a real-time gross settlement system is nearing completion. Gradual steps have been taken towards implementing inflation targeting.
While significant challenges remain, stakeholders agreed substantial progress has been achieved through a collaborative effort between the IMF, development partners, government, and the central bank. Sustaining reforms and embedding international best practices will be crucial for lasting gains. With continued prudent policies and capacity building, Mozambique can foster greater economic development, stability and prosperity.