IMF Staff Completes Mission for First Review of Extended Credit Facility Arrangement for Mozambique

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.

  • IMF staff and the Mozambican authorities have reached a staff-level agreement on policies that could support the Executive Board’s approval of the first review of the program under the ECF arrangement and lead to the disbursement of about US$63.8 million.
  • Mozambique’s economic recovery continues, with growth in the first half of 2022 above expectations and an increased output projection of 3.8 percent in 2022, following a successful public vaccination campaign and a robust recovery of services, industry and agriculture.
  • The increase in international food and fuel prices poses a challenge. The authorities are taking measures to mitigate the impact on the cost of living and to strengthen the economic recovery.

Washington, DC: Washington, DC: An International Monetary Fund (IMF) staff team led by Alvaro Piris, concluded discussions with the Mozambican authorities during September 5-16 on the First Review under the Extended Credit Facility (ECF) arrangement.

At the conclusion of the discussions, Mr. Piris issued the following statement:

“The IMF team has reached a staff-level agreement with the Mozambican authorities on the economic and financial policies that could support the approval of the First Review of the program under the ECF arrangement. The agreement is subject to approval of the IMF Executive Board in December 2022, which would enable the disbursement of SDR 45.4 million (about US$63.8 million).

“Economic recovery continued in the second quarter. Real GDP grew 4.6 percent (y/y) in the second quarter of 2022, the highest since the third quarter of 2018, with recovery broadening to services, industry and agriculture. Global commodity price increases have also supported a noticeable rebound in exports, but also pushed up food, fuel and transportation costs. Mostly driven by Russia’s invasion of Ukraine, and the related increase in global fuel and food prices, inflation rose to 12.1 percent (y/y) in August, its highest level since September 2017. The Bank of Mozambique (BM) has responded proactively to contain inflation, raising the policy rate to 15.25 percent in March, continuing the tightening cycle started a year ago, while the government has acted to mitigate the impact of fuel price rises, including on the most vulnerable households, and has announced measures to strengthen the recovery and encourage private sector development.

“All quantitative and structural benchmarks set for the first review have been met and good progress was made on the broader structural agenda. Looking ahead, the macroeconomic environment remains challenging. The authorities aim to continue implementing their ambitious economic reform agenda, including a sovereign wealth fund law, reform of public sector remuneration, and the amendment of the public probity law.

“The IMF staff team met with the Prime Minister, Adriano Maleiane, the Minister of Economy and Finance, Max Tonela, the Governor of the Bank of Mozambique, Rogerio Zandamela, and other senior officials. The mission also met with representatives of development partners, the private sector, and the press.”

“The team wishes to thank the Mozambican authorities for their excellent cooperation and for the frank and constructive dialogue and plans to return to Maputo in March 2023 for the second review.”

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