IMF’s pardon to Mozambique expected to be used to further support the economy

The US$15 million pardon in Mozambique’s debt servicing by the International Monetary Fund (IMF) will relieve the accounts of the Mozambican state and open up room to grant further support, said the president of the Confederation of Economic Associations (CTA).

“This pardon will release US$15 million from debt servicing for other items, which may be social protection, support for small and medium-sized enterprises or even provide for the needs of the national health system,” Agostinho Vuma commented in an exclusive interview with newspaper O País.

In the opinion of the CTA, the largest business organisation in the country, the funds should be applied in the package to mitigate the effects of Covid-19, in one of the items mentioned above.

The proposed State Budget for 2020 includes expenditure of US$570 million on debt servicing, and this pardon of US$15 million will provide some relief to Mozambican state accounts.

The permanent representation of the IMF in Mozambique has issued a statement about the decision to suspend payment of Mozambique’s debt servicing for the period between 14 April and 13 October of this year.

The statement added that the pardon was approved by the Board of Directors of the international financial institution as part of the Catastrophe Containment and Relief Trust (CCRT).

In addition to Mozambique, another 24 countries, including Guinea-Bissau and São Tomé and Príncipe, are benefiting from the suspension of debt servicing to the IMF in the next six months as part of the response by the International Monetary Fund to help cope with the impact of the Covid-19 pandemic. (macauhub)