Mozambique: International Monetary Fund to assess aid to Mozambique

19 November 2008

Maputo, Mozambique, 19 Nov – The International Monetary Fund (IMF) in January is expected to analyse its aid to the reform programme underway in Mozambique, in relation to the world financial crisis, according to a report in Mozambican newspaper Notícias.

For now, according to the IMF, there are conditions for Mozambique to maintain robust economic growth in 2009, although there are considerable risks that could arise from the impact of the international financial crisis.

The IMF’s decision in January will take into consideration Mozambique’s financial vulnerability in relation to the crisis at a time when the variation in price of products on the international market and the substantial decline in the price of Mozambique’s main export products is a significant factor.

“Mozambique’s foreign trade could suffer with a significant fall in worldwide demand for products, which would affect its volume of exports. As well as this, the economy remains heavily dependent on support from the international community, which could put at risk the ability to achieve its Millennium Targets of reducing poverty to half by 2015,” the IMF said in a recent statement.

The fund praised the “prudent” fiscal and monetary policies applied by teh Mozambican government, adding that “they need to continue being executed to consolidate macroeconomic stability in the context of a flexible Exchange rate system.”

The IMF also encouraged the government’s decision to formally request membership of the Extractive Industry Transparency Initiative (EITI), which would help ensure the transparent management of natural resources, and its decision to speed up reforms to reduce the cost of doing business. (macauhub)