IMF Concludes Staff Mission to MozambiquePress Release No.12/407
November 1, 2012
An International Monetary Fund (IMF) mission visited Mozambique during October 17–31, 2012 to conduct the fifth review under a three-year Policy Support Instrument (PSI) that was approved in June 2010 (see Press Release No. 10/242). Policy discussions were held with the Minister of Finance, Hon. Manuel Chang; the Minister of Planning and Development, Hon. Aiuba Cuereneia; the Governor of the Bank of Mozambique, Hon. Ernesto Gouveia Gove, several line ministers, and other senior government officials. The mission met with representatives of Parliament, the private sector, development partners, and civil society. The mission had the opportunity to visit the aluminum smelter Mozal, Mozambique’s largest exporter, and the country’s busy port in Maputo.
Ms. Doris Ross, IMF Mission Chief for Mozambique, issued the following statement in Maputo at the conclusion of the mission:
“Mozambique’s economy remains buoyant, despite a weak global economic environment. Reflecting the rapid start-up of coal production and exports, real gross domestic product (GDP) is expected to reach 7½ percent this year. Consumer price inflation has continued to slow sharply from its peak of 16.6 percent at end-2010 to 1.2 percent in September 2012, the lowest rate in the region, reflecting the effects of determined monetary tightening in 2011, lower-than-expected prices of imported food, and stable administered prices. Exports and foreign direct investment have remained strong, leading to high levels of investment and a further strengthening of international reserves in 2012.
“The mission commends the authorities’ sustained commitment to prudent economic policies under the program supported by the IMF. The authorities' policies continue to aim at preserving economic stability and sustaining high economic growth and making it more inclusive. The mission agrees with the authorities’ supportive policy stance for the remainder of 2012 and 2013 and their intention to (i) maintain high public investment over the next few years to address the huge infrastructure gap, while managing public borrowing prudently and enhancing the quality and transparency of project selection; (ii) facilitate credit expansion to the private sector and reduce the cost of doing business; and (iii) foster the social and human development objectives of the poverty reduction strategy. The mission also welcomes the efforts underway to prepare for the significant regulatory and macroeconomic challenges of future revenue from natural resources, especially coal and gas, and suggested that the government acquire specialist knowledge to reinforce these efforts. The mission renewed the IMF’s support through policy advice and strengthening the authorities’ technical and institutional capacity for economic analysis and management.
“Looking ahead, the mission encouraged the authorities in their efforts to enhance agricultural production and productivity, foster broad-based employment creation, and support human and social development including through the further expansion and determined implementation of the basic social protection system.
“The mission agrees with the authorities’ structural reform priorities, which aim to strengthen the basis for sustained long-term growth and poverty reduction. It welcomes their commitment to further strengthening financial sector development; public financial management; tax policy and administration; debt management; investment planning, implementation and monitoring; natural resource management; the anti-corruption framework and the business climate.
“The IMF's Executive Board is expected to consider the fifth review of the PSI in December 2012.
“The mission thanks the authorities and other interlocutors for the constructive discussions and their warm hospitality.”