Historic step: Mozambique promises the IMF to overhaul the Public Probity Law

The Government of Mozambique has made a commitment to the International Monetary Fund (IMF) to promote changes to the Public Probity Law with the aim of improving governance, according to official documents.

These actions reflect progress on the country's structural agenda. To strengthen the efficiency of public spending and improve governance, a proposed amendment to the Public Probity Law is expected to be submitted to parliament by the end of June 2023. The information was revealed in a letter signed by Ernesto Tonela, Minister of Economy and Finance, and Rogério Zandamela, Governor of the Bank of Mozambique, which was sent to Kristalina Georgieva, Managing Director of the IMF.

This document is part of the final report on the approval of the review of the Extended Credit Facility (ECF) programme for Mozambique, released recently. The IMF's approval of this review was announced on 6 July, guaranteeing at the time a disbursement of 60.6 million dollars (54 million euros) to Mozambique, a fact confirmed today by the institution.

The Public Probity Law has been in force in Mozambique for more than a decade, with the purpose of guaranteeing morality, transparency, impartiality and respect in the management of State assets by public servants.

In the same document, the officials assure the IMF that Mozambique is working on implementing the action plan set by the Financial Action Task Force (FATF), with the aim of leaving the institution's grey list, related to money laundering and terrorist financing.

In particular, Mozambique plans to provide adequate, accurate and up-to-date information on beneficial ownership that can be publicly consulted in the centralised register, in accordance with FATF standards, by the end of 2023. In addition, the country is promoting broad administrative reforms of public finance management and following a broad agenda of monetary, exchange rate and central bank organisation reforms.

The IMF's approval of this ECF review was announced on 6 July, securing at the time a disbursement of 60.6 million dollars (54 million euros) to Mozambique, now confirmed in the institution's statement.

Accompanying the announcement of the approval of the second review of the programme, approved in May 2022, and which raises the total amount already received by Mozambique to 212.09 million dollars (194 million euros), out of a total of 456 million dollars (418 million euros), the IMF authorised the non-observance of two criteria: the primary fiscal balance at the end of last year and the accumulation of external debt by the public sector.

As for macroeconomic forecasts for this year, the IMF predicts an acceleration in Mozambique's GDP growth, from 4.2% in 2022 to 7% this year. Inflation is also expected to fall from 10.3% to 6.7% at the end of the year, the same figure as in 2021, although almost double the figure of the two previous years.