The Mozambican economy is set to bounce back in 2020 and grow by 5.5 percent, compared to this year’s projected 4.5 percent, the International Monetary Fund said on Wednesday night.
Head of the visiting IMF delegation, Ricardo Vellosos, who is in Mozambique for consultations with local officials, expressed this on Wednesday night, 13 November 2019. He said the southern African economy is expected to receive a boost from several factors, including an anticipated recovery in the key agriculture sector.
“The outlook for 2020 is for a strong rebound in economic activity, with the growth rate rising to 5.5 percent, supported by post-cyclone reconstruction efforts, a recovery in agriculture and economic stimulus from further gradual easing of monetary conditions and clearing of domestic payments arrears to suppliers,” Vellosos said.
He noted that the devastation from Cyclone Idai, which killed more than 1 000 people across Mozambique, Zimbabwe and Malawi in March, had severely constrained agricultural production. The devastation had also disrupted transport, slashing growth projections by half for this year.
According to the official, while Mozambique faces significant headwinds and challenges, the country still offers a relatively stable macroeconomic and investment environment over the medium to long term.
He noted that the impact of the external debt crisis is expected to be a challenge only in the short term, given Mozambique’s vast natural resources.
Investor interest has proven to be resilient, with the natural gas sector projected to assist in getting Mozambique over the debt hurdle.
The official said the IMF is willing to talk with the Mozambican government about a possible programme of financial support, should the government request such a discussion.
“We are willing to work with Mozambique in the closest and most convenient way possible. If the government is interested in talking about a possible programme of financial support, we are open to such a request.”
Mozambique has been battling to recover from a debt crisis after admitting in 2016 to 1.4 billion dollars of previously undisclosed lending, prompting the IMF to cut off support and triggering a currency collapse and debt default.