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Mozambique’s government seeks financial support from the IMF and the World Bank

The government of Mozambique intends to obtain financial aid from the International Monetary Fund and the World Bank. The Prime Minister said that he estimates the country needs $700 million dollars (€641 million) to face the COVID-19 pandemic. The Minister of Economy and Finance, Adriano Maleiane, has already revised downwards the economic growth forecast for this year.

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This picture show a city in Mozambique.

The Prime Minister of Mozambique, Carlos Agostinho do Rosário, said that the executive is in contact with the International Monetary Fund (IMF) and the World Bank (WB) to mobilize the necessary resources the country needs to fight against the COVID-19 pandemic

“We are interacting with our cooperation partners, especially the International Monetary Fund and the World Bank in mobilizing resources,” said Carlos Agostinho do Rosário, speaking during the presentation of the Government’s Five-Year Program (PQG) 2020-2024 to the deputies of the Parliament.

Find out more about the measures emerging countries in Africa are taking in order to cope with the coronavirus crisis. Read the latest economic news from around the world, with our companion app Born2Invest.

Mozambique might need $700 million to cope with the coronavirus crisis

The Prime Minister did not go into detail about the values that the Mozambican executive intends to obtain from international financial institutions. However, he said that the support will be used to strengthen aid to the poorest populations and mitigate the impact on the national business fabric.

On March 23rd, the Mozambican executive said the country needs $700 million dollars (€641 million) to face the COVID-19 pandemic.

The Mozambican prime minister stressed the need to support micro, small and medium businesses operating in the provision of essential medicines, goods, and services in the face of the emergency caused by COVID-19.

Carlos Agostinho do Rosário reiterated the measures announced on the 22nd of last month by the Bank of Mozambique to support companies and families.

The central bank announced the “introduction of credit lines in foreign currency for banks and relaxation of the conditions for restructuring bank customers’ credits to mitigate the effects of COVID-19.”

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The measures consist of “introducing a foreign currency financing line for institutions participating in the Interbank Foreign Exchange Market, totaling $500 million (€467 million euros), for a period of nine months.

A week earlier, the institution had announced the reduction in the compulsory reserves required of the banking system in national (metical) and foreign currency.

The program that the Mozambican Parliament began debating predicts the country’s economy will reach 2024 with an average growth rate of 5.5%, but the estimate was made before the impact of COVID-19.

The Minister of Economy and Finance, Adriano Maleiane, has already revised downwards the economic growth forecast for this year, which may influence the accounts of the five-year program.

Instead of the 4.8% growth forecast for 2020, official forecasts now point to 2.2% in a pessimistic scenario and 3.8% in an optimistic one.

The COVID-19 pandemic has reached Mozambique

Mozambique has 10 official cases of infection with the new coronavirus and is in a state of emergency until the end of the month, prohibiting all types of events, public or private and even religious.

The new coronavirus, responsible for the COVID-19 pandemic, has already infected more than 905,000 people worldwide, of whom almost 46,000 have died. Of the cases of infection, at least 176,500 are considered cured.

The number of deaths in Africa has risen to at least 209 out of more than 5,940 confirmed cases in 49 countries, according to statistics on the disease on the continent.

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(Featured image by Hansueli Krapf via Wikicommons)

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First published in Africa21Digital, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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Desmond O’Flynn believes in minimalism and the power of beer. As a young reporter for some of the largest national publications, he has lived in the world of finance and investing for nearly three decades. He has since included world politics and the global economy in his portfolio. He also writes about entrepreneurs and small businesses, as well as innovation in fintech, gambling, and cannabis industries.