The International Monetary Fund (IMF) on Friday announced the approval of emergency financial assistance allowing the disbursement of $309 million to Mozambique.
The financial assistance, approved under the Rapid Credit Facility (RCF), is intended to address the urgent balance of payment and fiscal needs brought about by the deadly coronavirus pandemic.
IMF Deputy Managing Director Tao Zhang said the government’s immediate priority was to limit the impact of the pandemic and maintain macroeconomic and financial stability.
“Given Mozambique’s limited fiscal space and high public debt, additional external support, preferably in the form of grants and highly concessional loans, is also urgently required to meet the country’s elevated financing needs and ease the financial burden of the pandemic,” Zhang said.
Zhang added that the Mozambican authorities will publish large public procurement contracts and conduct and publish ex-post audits of funds’ use as a way of preventing theft and misuse of the funds.
“Once the pandemic eases, it will be critical to resume fiscal consolidation and strengthened debt management and transparency to ensure that public debt remains sustainable. It will also be important to implement structural reforms to support inclusive and sustainable growth,” Zhang’s statement concluded.
Mozambique has faced a number of social and economic difficulties in recent times particularly being hit by two powerful cyclones (Kenneth and Idai) in 2019 which caused widespread damage. It is also still recovering from the conflict between FRELIMO and RENAMO and is currently battling an Islamist insurgency in the Cabo Delgado province. The country is also dealing with a struggling economy and food insecurity.
