Mozambique: Central Bank Governor says country accumulated high debt without saving

The governor of the Bank of Mozambique (BdM), Rogério Zandamela, said that the country had accumulated a “high” public debt without having saved “enough” to deal with the impacts of the crises and to implement reforms.

“The chronic and structural deficits that characterize the Mozambican economy make the management of monetary policy even more challenging, in a context in which the country has accumulated a high debt and, at the same time, has not saved enough to cushion the impact of shocks, which are increasingly frequent and intense,” said the governor on September 6.

Speaking during an inaugural class of the PhD program in Development Studies, on the theme “The Challenges of Monetary Policy in a Context of Crisis Management”, which took place at the Polytechnic University in Maputo, he added that Mozambique is implementing reforms with little funding, highlighting the application of the Single Wage Table (TSU).

“The ability to implement reforms in a sustainable way depends on abundant resources to sustain that growth. People keep asking us when such reforms are coming and they’re already tired. With money, the benefits would be easily visible,” he explained.

Recently, the International Monetary Fund (IMF) considered that the Mozambican government should “reduce the wage bill” to the level of countries in the region, in order to be able to invest in priority areas, such as combating food insecurity and poverty.

On July 6, the IMF approved the second revision of the Extended Fund Facility for Mozambique, guaranteeing a disbursement of 60.6 million dollars, and revised Gross Domestic Product (GDP) growth from 5% to 7%.