## IMF Executive Board Completes Fourth Review under Extended Credit Facility and concludes 2024 Article IV Consultation with Mozambique _IMF News, July 8, 2024_ ## Source details **Canonical URL:** [IMF Executive Board Completes Fourth Review under Extended Credit Facility and concludes 2024 Article IV Consultation with Mozambique](https://www.imf.org/en/news/articles/2024/07/08/pr24263-mozambique-imf-exec-board-completes-4th-rev-ecf-2024-art-iv-consult) ## Other formats - [Markdown version](/en/news/articles/2024/07/08/pr24263-mozambique-imf-exec-board-completes-4th-rev-ecf-2024-art-iv-consult/index.md) - [Structured JSON version](/en/news/articles/2024/07/08/pr24263-mozambique-imf-exec-board-completes-4th-rev-ecf-2024-art-iv-consult/index.json) - [Bundle manifest](/en/news/articles/2024/07/08/pr24263-mozambique-imf-exec-board-completes-4th-rev-ecf-2024-art-iv-consult/bundle-manifest.json) ## Bibliographic details - Published: July 8, 2024 --- ### Program decision and financing - The Executive Board completed the Fourth Review under the Extended Credit Facility (ECF) Arrangement and approved immediate disbursement of SDR 45.44 million (about US$60.03 million), usable for budget support. - Total disbursements under the ECF arrangement to date: SDR 249.92 million (about US$330.14 million). - The three-year ECF arrangement aims to support Mozambique’s economic recovery, reduce public debt and financing vulnerabilities, and foster higher and more inclusive growth through structural reforms. ### Program performance and waivers - Structural benchmarks (SBs): Three of four SBs were met as of end-June 2024. - Quantitative performance criteria (QPCs): Two of four QPCs were observed. - Waivers approved by the Executive Board for two nonobservances: - Waiver for nonobservance of the continuous performance criterion on non-accumulation of new public and publicly guaranteed external payment arrears — missed due to operational constraints related to debt management. - Waiver for nonobservance of the performance criterion on the domestic primary balance — missed, in part, due to higher than expected wage-bill spending and debt service. - The Executive Board completed the financing assurances review and approved the authorities’ requests for modification of the MPCC and the quantitative performance criterion on domestic primary budget balance. ### Macroeconomic outlook and policy stance - Inflation: Continued to moderate and was within the Monetary Policy Consultation Clause (MPCC) band. - Growth: Economic growth is positive but expected to moderate, with tight financial conditions acting as a drag on activity. - Risks: Significant risks stem mainly from adverse climate events and the fragile security situation. - Monetary policy: - A tight monetary policy stance has helped contain inflationary pressures and rebuild FX reserves. - With weak non-mining growth, well-anchored inflation expectations, and continued fiscal consolidation, a gradual easing of the monetary policy stance is appropriate. - Improving monetary policy transmission by deepening the interbank, money, and foreign exchange markets is important. - Allowing greater exchange rate flexibility is necessary to enhance resilience to external shocks. - Fiscal policy: - Further fiscal consolidation is warranted to reduce financing needs and contain debt vulnerabilities, while creating fiscal space for social spending to protect the most vulnerable. - Revenue mobilization and wage bill spending rationalization are essential to create fiscal space for high-priority social and development spending. - Improving social spending execution and avoiding future arrears remain paramount. - Other policy priorities: - Further progress in enhancing the AML/CFT framework is warranted. - Continued capacity development, including in the operation of the Sovereign Wealth Fund, is essential for strengthening institutional capacity. - Measures to build resilience to climate change and accelerate progress on addressing gender-based disparities are crucial. ### Structural and governance progress - Notable reforms and steps: - Publication of a Decree Law requiring the collection of beneficial ownership information. - Publication of financial risk indicators of state-owned enterprises (SOEs). - Monthly cash flow forecasts by Treasury to inform budget execution. - Emphasis on strengthening: revenue administration, public financial management, debt management, and SOE operations. - Continued capacity development needed for effective Sovereign Wealth Fund operation and broader institutional strengthening. ### Discussion priorities from the 2024 Article IV Consultation - Wage bill rationalization for a sustainable and cost-effective provision of public services. - The role of state-owned enterprises (SOEs) and policies to improve their governance and transparency. - Drivers of exchange rate stability since mid-2021. ### Republic of Mozambique: Selected Economic Indicators, 2020–24 National income and prices - Nominal GDP (MT billion): 989 (2020); 1,058 (2021); 1,206 (2022); 1,339 (2023); 1,425 (2024 Proj.) - Real GDP growth (percentage change): -1.2 (2020); 2.4 (2021); 4.4 (2022); 5.4 (2023); 4.3 (2024 Proj.) - Consumer price index (percentage change, end of period): 7.3 (2020); 10.9 (2021); 3.6 (2022); (blank for 2023 in source); (blank for 2024 in source) Government Operations (percent of GDP) - Total revenue: 23.8 (2020); 25.1 (2021); 23.7 (2022); 24.5 (2023); 25.6 (2024 Proj.) - Total expenditure and net lending: 32.2 (2020); 30.8 (2021); 32.8 (2022); 33.2 (2023); 32.9 (2024 Proj.) - Overall balance, after grants: -4.8 (2020); -4.6 (2021); -5.3 (2022); -4.3 (2023); -3.7 (2024 Proj.) - Primary Balance after grants: -1.9 (2020); -5.2 (2021); -0.3 (2022); -0.1 (2023); (blank for 2024 in source) - Public sector debt: 120.0 (2020); 104.3 (2021); 100.3 (2022); 93.9 (2023); 97.5 (2024 Proj.) - of which: external: 97.3 (2020); 80.8 (2021); 72.1 (2022); 66.4 (2023); 65.9 (2024 Proj.) Money and Credit - Reserve money (percentage change): 9.0 (2020); -14.3 (2021); 0.6 (2022); 117.8 (2023); -13.0 (2024 Proj.) - M3 (Broad Money) (percentage change): 23.3 (2020); 1.9 (2021); 8.7 (2022); 3.3 (2023); 4.0 (2024 Proj.) - Credit to the economy (percentage change): 13.1 (2020); 5.2 (2021); -2.2 (2022); -5.0 (2023); (blank for 2024 in source) - Credit to the economy (percent of GDP): 26.2 (2020); 25.8 (2021); 23.5 (2022); 20.7 (2023); 18.5 (2024 Proj.) External sector (percent of GDP) - Merchandise exports: 26.1 (2020); 35.3 (2021); 43.9 (2022); 39.5 (2023); 37.2 (2024 Proj.) - excluding megaprojects: 8.5 (2020); 10.3 (2021); 11.2 (2022); 9.8 (2023); (blank for 2024 in source) - Merchandise imports: -41.3 (2020); -48.5 (2021); -70.6 (2022); -43.8 (2023); -45.6 (2024 Proj.) - External current account, after grants: -26.2 (2020); -20.5 (2021); -36.4 (2022); -11.6 (2023); -30.8 (2024 Proj.) - Net international reserves (millions of U.S. dollars, end of period): 3,493 (2020); 2,927 (2021); 2,333 (2022); 2,933 (2023); 2,821 (2024 Proj.) - Gross international reserves (millions of U.S. dollars, end of period): 4,070 (2020); 3,470 (2021); 2,888 (2022); 3,510 (2023); 3,508 (2024 Proj.) *Source: IMF Executive Board press release, July 8, 2024.* --- ## References - [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg) - [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx) - [Republic of Mozambique and the IMF](http://www.imf.org/external/country/MOZ/index.htm) - [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2024/07/08/pr24263-mozambique-imf-exec-board-completes-4th-rev-ecf-2024-art-iv-consult_