Mozambique wants World Bank for structural reforms and IMF as guarantor – The Economic Journal

Mozambique wants World Bank for structural reforms and IMF as guarantor - The Economic Journal

In Bali, Indonesia, where he participates in the IMF and World Bank Annual Meetings, Adriano Maleiane argued that it is important for the Fund to assume a role of "guarantor" of the economic policies that are being pursued and to continue to "provide technical assistance ".

The minister explained that this aid should continue "in the field of resource mobilization", in the area of ​​tax administration, in the preparation of projects ", so that the IMF can then convey the message that Mozambique is" on track " especially after advancing with "successful fiscal consolidation and difficult measures such as the elimination of subsidies." That is, "recognize the effort" and send the message to the markets that Mozambique "is on the right track," he admitted.

On the other hand, the Minister of Finance defended a program to be agreed with institutions such as the World Bank. "The program we need is a program of structural reform, for example within the World Bank, of other specialized institutions. This we need a lot ", especially at the level of infrastructures, schools, education, roads," he said.

The International Monetary Fund anticipates a rise in public debt in Mozambique over the next five years, rising from 112.9% in 2018 to 130.7% in 2022, before falling to 122.1% in 2023.

According to the 'monitor monitor', released on Wednesday in Bali, where the annual meetings of the IMF and the World Bank take place, Mozambique's public debt will increase in the next five years to 118.7% in the next year, with a peak of 130.7% in 2022.

The average public debt value in sub-Saharan Africa will be 41.7% this year, almost three times less than the IMF's projection for Mozambique's indebtedness.

By the end of September, the financial rating agency Fitch had decided to keep Mozambique's default rating due to the Government's inability to reach an agreement with creditors or pay public debt installments.

The rating agency Fitch anticipates a 3.5% growth for Mozambique this year, down from 3.7% last year, and a budget deficit of 5.7% or 6.9%, including arrears.

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