Only if there is more clarification

International Monetary Fund wants additional clarification from Mozambique regarding the resources lent to public enterprises before assisting the country.The director of the African Department of the International Monetary Fund (IMF) said on Friday that without further clarification by Mozambique about resources lent to public companies, the Fund would not provide financial assistance to the country. “We would need clarification on what happened,” before the IMF “can proceed to [financial] programme engagement,” Abebe Aemro Selassie replied when asked by Lusa whether the Fund could lend to the country, given its debt is unsustainable according to Fund criteria.

IMF chief economist and Director of the African Department, Abebe Aemro Selassie (left), and Lucie Mboto Fouda, a Senior Communication Officer with the IMF Communication Department.

“Given the fact that they are having difficulties servicing their debts, it’s a country that we classify as being in debt distress or that debt is not on a sustainable trajectory,” Selassie added at the end of the press conference presenting the economic outlook for sub-Saharan Africa on Friday in Washington.

“Like all members of the IMF, they are eligible for programme discussions, of course. There is no outstanding request for a programme discussion right now. And what we have said in the past when the programme was suspended was that we would need clarification on what happened. The audit that was done. That will bring about more transparency on the resources that were borrowed or used before we can proceed to a programme engagement. There’s no programme request,” he said.

Selassie said he had no new information about the negotiations between the Government and creditors, nor on the ongoing judicial investigations in the country. The International Monetary Fund estimates that Mozambique’s public debt will continue to rise until 2022, when it will account for 130.3% of the country’s GDP, and then fall to 112.5% in the following year.

According to the forecasts of the Fiscal Monitor, presented on Thursday afternoon in Washington, Mozambique is one of six sub-Saharan African countries with unsustainable debt, in addition to Senegal, Zambia and Côte d’Ivoire, among others. The IMF expects Mozambique’s public debt to continue to rise until 2022, from 110.1 percent of the GDP this year to 116.6 percent in 2019 and 122.1 percent in 2020.Mozambique’s public debt will continue its upward trend in 2021, reaching 126.7 percent of the GDP, and also in 2022, when it will represent 130.3 percent of GDP, before falling to 112.5 percent of GDP the following year.