Mozambican government should provide missing information on undisclosed loans, IMF says

15 December 2017

The International Monetary Fund restated the need for the Mozambican authorities to provide the missing information mentioned in the audit report by Kroll Associates UK of state-backed loans taken out by three state-owned enterprises, according to a statement released on Thursday in Washington.

The statement, issued at the end of a mission to Mozambique under the IMFs Article IV, adds that the IMF has noted the position of the Mozambican government that it is necessary to wait for the results of the investigations that the Attorney General’s Office is carrying out .

The IMF said that “progress in negotiations with creditors initiated by the authorities in October 2016” on the restructuring of loans provided “would be an essential contribution to restore debt sustainability” in Mozambique.

The IMF mission, led by Michel Lazare, which was in Mozambique from 30 November to 13 December, said in the document that Mozambique’s economic growth “continues to slow” and that future developments remain difficult, having recommended the adoption of a set of policies to ensure macroeconomic stability and enable sustained growth.

“A rigid monetary policy has allowed the inflation rate to drop to about 7% in November and the exchange rate has stabilised over the last six months, with the improved position abroad and the Bank of Mozambique accumulating significant currency reserves,” the statement said.

However, the IMF mission expects economic growth to fall to 3.0% of gross domestic product (GDP) after a rise of 3.8% in 2016 and the government deficit is expected to exceed 8.0% of GDP due to increased interest and salary expenses, as well as lower-than-expected tax revenues. (macauhub)