EU support to Mozambique dependent upon prior agreement with the IMF

3 April 2020

The representative of the European Union in Mozambique, António Sanchez-Benedito said necessary conditions to resume direct support for the country’s State Budget are still lacking, daily newspaper O País reported.

Sanchez-Benedito gave assurances that there will be no new funds delivered directly to the government of Mozambique, while no agreement with the International Monetary Fund is signed, “that includes transparency and sound financial management.”

The newspaper cited economist João Mosca as saying that the two aspects mentioned by the representative of the European Union do not exist in the Mozambican government, “as there is no transparency in the management of public revenue or debt servicing.”

“There is no contractual transparency, there is a level of indebtedness of the State, and it is not clear why it remains that way, and their are no limits on public expenditure in order to maintain fiscal stability,” said the economist.

The Centre for Public Integrity (CIP), a non-governmental organisation, warned of the risk of improper management of public finances by the government, given the continued lack of accountability in the management of public debt.

The CIP said that the limits for contracting debt and the issuing of guarantees are set by the government without any plausible justification, and pointed out that the threshold for 2020 is 19.4 billion meticais (US$287 million), “without any justification for this figure being provided.” (macauhub)