IMF calls for business climate to improve for SMEs in Mozambique

13 May 2014

The International Monetary Fund (IMF) has praised economic performance and low inflation in Mozambique but warned that the country needed to improve its business climate for small and medium-sized enterprise (SMEs), according to a statement issued in Washington DC.

Cited by Mozambican news agency AIM the statement also praised the government’s strategy to reduce poverty but noted that in 2013 the funds assigned for that purpose had been reduced.

The deputy director-general of the IMF, Naoyuki Shinohara, said that this year’s budget policy is “expansionary” and reflected temporary factors such as general elections and some public investments, but noted that it was important to carry out fiscal consolidation in the medium term.

“Monetary policy needs to remain vigilant and stand ready to take action to keep inflation to the authorities’ medium-term target,” he said.

The deputy director-general also said that external funding could help fund infrastructure investments but noted the need for a transparent analysis of those projects and strict supervision of them during execution order to ensure that public resources are properly sued.

Doris Ross, who headed up the latest IMF mission to Mozambique, sais at the time that the government needed to be more transparent about its decisions and investment priorities as most of the investments carried out are based on domestic and external loans, “the amount of which is increasing.”

The mission said it was particularly concerned about a US$850-million bond issue by Mozambican tuna firm Empresa Moçambicana de Atum (Ematum), which had been guaranteed by the State. (macauhub/MZ)