International Monetary Fund Pledges Additional Aid in 2009 for Mozambique

The International Monetary Fund, announced on Friday that it will analyze its aid to the reform program underway in Mozambique next January in relation to the world financial crisis, and would add further assistance.

The IMF said in a statement obtained by APA on Friday that there are conditions for Mozambique to maintain robust economic growth in 2009, although there are considerable risks that could arise from the impact of the international financial crisis.

The IMF’s decision to inject more aid to Mozambique in January will take into consideration the country’s financial vulnerability in relation to the crisis at a time when the variation in price of products on the international market and the substantial decline in the price of Mozambique’s main export products is a significant factor.

“Mozambique’s foreign trade could suffer with a significant fall in worldwide demand for products, which would affect its volume of exports.

“As well as this, the economy remains heavily dependent on support from the international community, which could put at risk the ability to achieve its Millennium targets of reducing poverty to half by 2015,” the IMF said in a recent statement.

The fund praised the “prudent” fiscal and monetary policies applied by the Mozambican government, adding that “they need to continue being executed to consolidate macroeconomic stability in the context of a flexible exchange rate system.”

The IMF also encouraged the government’s decision to formally request membership of the Extractive Industry Transparency Initiative (EITI), which would help ensure the transparent management of natural resources, and its decision to speed up reforms to reduce the cost of doing business.

The economy expanded by 6.7 percent in the first half of 2008 and the government says it is on track to reach an 8 percent growth target.

The IMF however, sees Mozambique’s economy slowing to 6.5 percent in 2008, from last year’s 7.0 percent. It said 2009’s outlook was good but warned of a risk of lower exports due to a global economic slowdown.

Mozambique’s government said it will also receive $485.2 million from 19 regular international partners to support its budget for 2009.

Budget spending is expected to increase by 5 percent next year from $3.8 billion in 2008 to help boost agricultural production and infrastructure development, with about half of the financing expected to come from donors and loans.

Source African Press Agency

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