IMF States Sovereign Wealth Fund is a Key Step Towards Transparent Management in Mozambique
The International Monetary Fund (IMF) has acknowledged the creation of a Sovereign Wealth Fund (FSM) in Mozambique as a significant stride towards ensuring transparent management of the country’s natural resource wealth.
This statement was part of a communique released on Monday, 8th January, in which the IMF announced the approval of the third review of its assistance plan to Mozambique. This approval paves the way for the “immediate disbursement” of a new tranche of 60.7 million dollars for budgetary support to the country.
The IMF's communique states, “It was an important step to ensure transparent and solid management of natural resource wealth.” The organization also emphasized the need for continued fiscal consolidation efforts to reduce financing needs and contain debt vulnerabilities. With well-anchored inflation expectations, a tighter fiscal policy, and weak non-mining growth, there is room for a gradual easing of monetary policy, the IMF argues.
In a separate announcement made on Monday by the Presidency of the Republic, President Filipe Nyusi enacted the law establishing the FSM, which was approved in Parliament in December, despite widespread criticism from the opposition questioning its management.
The Presidential communique noted that the President “enacted and ordered the publication” of the law creating the fund, which will be financed by revenues generated from the export of natural gas.
It should be noted that the proposal for the FSM's creation, presented by the Government, received final approval with 165 votes solely from Frelimo, while 39 opposition deputies, from Renamo and the Democratic Movement of Mozambique (MDM), voted against it.
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