The International Monetary Fund (IMF) has reached a staff-level agreement with Mozambique under which the Bretton Woods institution would support a three-year programme to promote macroeconomic stability in the southern African country.
In a statement on Tuesday, the IMF said the staff-level agreement is supported under the Extended Credit Facility to the tune of US$470 million and “aims to foster sustainable, inclusive growth, and long-term macroeconomic stability.”
“The staff-level agreement is subject to IMF Management and Executive Board approval,” the statement said.
This will be the first IMF support to Mozambique since April 2016 when the Fund suspended its programme with Mozambique after a scandal about hidden government debts came to light.
The suspension came in the wake of loans valued at more than US$2 billion fraudulently obtained by three fraudulent, security-linked companies from the banks Credit Suisse and VTB of Russia, based on illicit loan guarantees issued by the government of the day under former President Armando Guebuza.
The three-year IMF support to Mozambique economic would focus on growth, fiscal sustainability and reforms in public financial management and governance to reduce debt and financing vulnerabilities.
“The programme aims to maintain the pace of structural reforms to improve the management of fiscal resources.”