IMF believes Mozambique capable of managing donor delay in providing budgetary aid

3 March 2010

Maputo, Mozambique, 3 March – The Mozambican government will be able to manage the delay in receiving donation for the state budget from donor countries but must seek alternative sources of financing, the IMF representative in Mozambique said Tuesday in Maputo.

“I think the situation is perfectly manageable ,” said Felix Fischer, on being asked by Portuguese news agency Lusa about the delay in donor countries paying out teh amounts pledged to support the State Budget for this year.

Mozambique’s main donors, brought together in the co-called G-19, have recently had trouble dialoguing with the Mozambican authorities.

The G-19 is responsible for around 50 percent of the Mozambican state budget, the cost of which has yet to be proposed by the government to the country’s parliament.

Last week, Mozambique’s finance minister, Manuel Chang, called the delay in contributions from the international community “unfortunate.” These donations are usually provided in January, but this year are only expected in April.

Mozambique was one of the country’s that felt the impact of the financial crisis least, but the government opted to implement preventive measures including adopting a more expansionist monetary policy.

“”Mozambique has very good macroeconomic management and the Government has responded to the crisis with anti-cyclical measures: An expansionist monetary policy, allowing the private sector to increase it level of credit,” noted Fischer, calling, however, for those measures to be reversed.

Fischer considered that the effects of the increased price of fuel, along with the rise in value of the rand (South Africa’s currency) would “strongly increase” prices this year, above that seen in 2009. (macauhub)