Mozambique is getting $309 million from the International Monetary Fund (IMF) to respond to COVID-19 economic consequences, after the IMF board approved the disbursement under the Rapid Credit Facility (RCF).
The $309 million would help Mozambique meet urgent balance of payment and fiscal needs stemming from the COVID-19 pandemic, the IMF said in a statement received by TODAY NEWS AFRICA in Washington D.C.
Mr. Tao Zhang, IMF Deputy Managing Director and Board Chair, said “Mozambique is expected to be significantly affected by the COVID-19 pandemic, dashing prospects of a nascent economic recovery following two powerful tropical cyclones that struck in 2019.”
“The IMF’s emergency financial support under the Rapid Credit Facility, along with the additional donor grant financing it will help to catalyze, will contribute to addressing Mozambique’s urgent balance of payments needs generated by the pandemic,” Mr. Zhang added.
He said the immediate priority for Mozambique is to limit the impact of the pandemic and preserve macroeconomic and financial stability.
Higher health spending and measures to protect the most vulnerable in the society and support micro-businesses and SMEs are being enacted.
“Given Mozambique’s limited fiscal space and high public debt, additional external support, preferably in the form of grants and highly concessional loans, is also urgently required to meet the country’s elevated financing needs and ease the financial burden of the pandemic,” Zhang said, adding that “participation in the G20 debt standstill initiative will provide additional resources to fight the pandemic while limiting a deterioration of Mozambique’s debt liquidity indicators in the near term.”
He said once the pandemic eases, “it will be critical to resume fiscal consolidation and strengthened debt management and transparency to ensure that public debt remains sustainable. It will also be important to implement structural reforms to support inclusive and sustainable growth.’’