International Monetary Fund analyses emergency credit to Mozambique

27 March 2019

The International Monetary Fund (IMF) is considering granting an emergency loan to Mozambique of between US$60 million and US$120 million, the IMF’s mission head for Mozambique announced on Tuesday in Maputo.

Ricardo Velloso said that given the magnitude of the effects of cyclone Idai on the country, “my expectation is that the value of emergency credit will reach the upper range, of 120 million dollars.”

The IMF will aid through the Quick Credit Facility, a mechanism set up by the IMF to address emergency situations in member countries.

Velloso said that the IMF’s mission to assess the impact of the cyclone will extend its stay in Mozambique until Friday to carry out a preliminary assessment of the effects of the disaster.

In a statement released in Washington, the mission said that despite the probable adverse macroeconomic effects of cyclone Idai in 2019, which are still under analysis, the prospects are of recovery of economic activity in the medium term.

The document also underlines the importance of significant debt relief and enhanced oversight of the entire public sector debt portfolio, in order to bring debt indicators to a more secure level.

“Real GDP growth slowed to 3¼% in 2018, but grew broadly, with non-mining growth accelerating to 2¾% in 2018 from 2% in 2017. Inflation remains controlled as a result of tight monetary policy and the stability of the exchange rate and food prices,” the IMF said. (Macauhub)