Maputo wants IMF agreement for assistance program by the end of the year

A minister of Finance, Carla Loveira, has already met with the IMF delegation that initiated Wednesday's work visit to Mozambique, for technical negotiations on a possible financial support program for the country, advances.

The ministry states in the statement that “it is hoped that this mission will lay the foundations for supporting the conclusion (Staff Level Agreement) and its formal approval by the IMF Executive Council by the end of 2026, in accordance with the timetable previously discussed.”.

At the meeting, the minister “recognized that, although the economic situation tends to recover”, liquidity challenges, on the treasury side, “still persist,” creating “difficulties for full implementation of the budget for full compliance with the debt service in due time,” said.

However, the Government remains “in the process of creating the conditions for implementing the measures of the fiscal consolidation package, in line with what was presented in the 2026 mission”.

This mission will take place until 18 September in Maputo, “in the context of technical discussions with a view to negotiating a potential Program under the Extended Credit Facility”, or ECF (Extended Credit Facility), an IMF concessional financing mechanism for low-income countries.

The IMF delegation is headed by Pablo López Murphy and should hold meetings with different ministries, the Bank of Mozambique, private sector representatives and financial institutions.

In the statement released today, the Ministry of Finance states that the Head of Mission took over at the meeting that “hopes for the discussions to be positive” and that “he made known” that the IMF “is aiming to deepen the latest fiscal developments, the debt management strategy, the macroeconomic framework and the improvement of economic policy, which will support the future potential programme under the ECF.

“ The executive is fully convinced of Mozambique’s medium-term potential, notably with the reforms and benefits that LNG projects will bring to our economy, reinforced by the relaunch, in January 2026, of the TotalEnergies Mozambique LNG project and our recent departure from the GAFI grey list,” the statement says.

This mission comes about three months after the IMF confirmed initial discussions with the Mozambican authorities on a formal request for financial support.

At the end of this visit, in June, López Murphy, who also led this mission, said that the team discussed with the Government “his request for a program supported by the Fund” and that he would return to Maputo “in the coming months” to deepen the request and economic policy plans of the authorities.

It explained that the talks had focused on measures to restore macroeconomic stability and sustainability of public debt, including strengthening the fiscal position, protecting the most vulnerable groups, strengthening monetary and exchange rate policy, preserving financial stability and improving governance.

The IMF then considered that Mozambique was facing a challenging economic environment, with moderate growth, inflation in acceleration, fiscal and debt vulnerabilities, as well as limitations in foreign exchange access and warned of risks associated with increased international fuel and fertilizer prices and impacts of recent climate shocks on the national economy.

In March, Mozambique liquidated a debt of $698.6 million to the IMF, corresponding to loans contracted under the Poverty Reduction and Growth Fund (PRGT), an operation that the government presented as a sign of prudent management of public accounts and of restoring market confidence.