IMF is in Mozambique for new technical evaluation

8 November 2018

A mission from the International Monetary Fund (IMF) is in Maputo for a two-week visit, during which the evolution of Mozambique’s main macroeconomic indicators will be analysed, the local press reported.

This visit comes at the same time that Mozambique reached an agreement with a group of creditors regarding the second restructuring of debt owed by Mozambican tuna company Ematum, currently called Tunamar, with an initial amount of US$850 million.

The issues related to State-backed loans taken on by two public companies controlled by the State Information and Security Service – Mozambique Assett Management and ProIndicus – which were the basis of the IMF’s decision to suspend the financial support programme to the country.

Following the IMF decision taken in 2016, the remaining development partners in the so-called Group of 14 decided to end direct support to the State Budget.

The IMF team, headed by Ricardo Velloso, who visited Mozambique from 25 July to 3 August 2018, announced at the end that the economic recovery would be supported by further drops in interest rates given the favourable inflation scenario.

The IMF mission also recommended the submission of a draft State Budget for 2019 based on realistic macroeconomic assumptions as well as forecasts of prudent revenue and expenditure.

The team also recommended the elimination of Value Added Tax (VAT) exemptions, except for the basic basket goods as well as reducing the size of the payroll as a percentage of Gross Domestic Product through moderate wage increases, particularly for the best paid parts of the public sector. (macauhub)