The International Monetary Fund (IMF) has reaffirmed its commitment to enhancing macroeconomic stability in Mozambique, promoting inclusive and sustainable growth, and protecting the most vulnerable segments of the population. This statement was made via email by an IMF spokesperson, following inquiries regarding the structure of the newly announced support plan.
“The request for a new program comes at a time of increased challenges, including post-election instability and fiscal pressures. We remain committed to working closely with Mozambique’s authorities to navigate this complex environment and advance the country’s development agenda,” the spokesperson added, without providing additional details about the new plan.
The IMF and the Mozambican authorities have agreed to conclude consultations on the current aid program and commence negotiations to formulate a new one, as announced by the financial institution on the 18th of this month.
“To better align the IMF’s support with the vision and priorities of the new government, the Mozambican authorities have requested the initiation of discussions for a new IMF program. Discussions with the IMF teams will commence shortly,” the IMF statement reads.
The Washington-based organization also noted that “the Mozambican authorities and the IMF teams have reached an understanding not to proceed with subsequent reviews under the ECF-supported [Extended Credit Facility] mechanism.”
The ECF program was approved in May 2022, providing total financing of $456 million (approximately €416.2 million) to Mozambique, with four tranches already disbursed.
In early March, the IMF emphasized that Mozambique needs fiscal consolidation by 2025 to ensure public account sustainability, following a significant budgetary slippage the previous year.
Mozambique has not only faced significant budgetary setbacks but also nearly five months of social unrest, marked by intense demonstrations initially protesting the October 9 election results called by former presidential candidate Venâncio Mondlane.
Nearly 400 people lost their lives in clashes with the police, according to data from civil society organizations. The unrest also led to looting and the destruction of both public and private businesses and infrastructure.
The Mozambican government previously confirmed at least 80 deaths and the destruction of 1,677 commercial establishments, 177 schools, and 23 health units during the protests.
On March 23, Mondlane and Mozambique’s President, Daniel Chapo, met for the first time, committing to ending post-electoral violence, although public exchanges between the two politicians still contain criticism and mutual accusations.
