IMF praises Mozambique’s economic policy, but calls for more reforms

21 December 2006

Washington, United States, 21 Dec – The International Monetary Fund (IMF) praised the “prudent” economic policy of Mozambique and announced it had granted the country US$2.4 million as part of the IMF Program for Poverty Reduction and Growth.

In a statement issued Tuesday, the IMF said that the “prudent macroeconomic policies” of the country and the “first wave of structural reforms” had resulted in strong economic growth, “moderate” inflation and “solid progress on the road to the targets set in the poverty reduction strategy.”

The organization warned, however, that in order to meet the targets set in the Action Plan for Reducing Absolute Poverty II there would have to be a “strengthening of fiscal policy” and the investment climate through reduced costs of running companies as well as effort to “continue to face issues of governance.”

The statement said that the IMF was not entirely satisfied with recent reforms of labor laws, saying that the labor law project “represents an improvement of the current law,” but that the Mozambique authorities must quickly resolve the continued “rigidity” of the labor market. The IMF did not specify what problems it considered will still to be resolved in the Mozambican labor laws.

The organization, on the other hand, “encourages” the Mozambican authorities to adopt a law on “fiscal regimes” for the mining and oil sectors. (macauhub)