Fight against poverty in Mozambique moves ahead, but more reforms needed, IMF says

6 February 2007

Washington, United States, 6 Feb – Mozambique is making progress in its fight against poverty and is well placed to achieve its Millennium Development Goals, but it should speed up a “second generation” of reforms to boost the economy, said the International Monetary Fund (IMF).

In its most recent report on the country, published Friday night, the IMF that in order to “strengthen” the current strategy for reducing poverty it was necessary to improve the investment climate, modernize the legal system and the “firm” carrying through with an anti-corruption strategy.

“without this second stage of reforms, the growth (of Mozambique) may be affected,” the IMF said in its latest assessment of the country’s economic development.

The adoption of a fiscal regime for the mining sector, “in line with best international practices,” also needs “urgent attention,” said the IMF authorities.

In order to achieve the Millennium Development Goals (MDG), the IMF said, “the government should ensure that supplementary external financing, including resources from the multilateral debt pardon, are directed at defined priorities and that public expenditure is profitable.”

The IMF said that Mozambique is “well positioned” top achieve its MDG, which aim to reduce poverty by half by 2015, with annual economic growth of over 5 percent.

The current program for fighting poverty, PARPA II, has as a target for 2009, the reduction of poverty to below 45 percent of the population.

In 2003, the end of PARPA I, the rate of poverty in Mozambique stood at 54 percent of the population, after results that IMF said were “impressive.” (macauhub)