Expost Assessment of Mozambique’s Performance Under Fund–Supported Programs
APPENDIX Chronology of Major Policy Measures
1) Structural Adjustment Facility (SAF) arrangement from June 8, 1987 to end-December 1989
2) First Enhanced Structural Adjustment Facility (ESAF) arrangement from June 1, 1990 to end-1995
3) Second ESAF arrangement from June 21, 1996 to June 27, 1999
4) Poverty Reduction and Growth Facility (PRGF) arrangement from June 28, 1999 to June 28, 2003
This paper was prepared by a staff team comprising Messrs. Di Tata (Head), Engelke, and Manoel, and Ms. Mashinkila (all AFR), Mr. Frecaut (MFD), Mr. Kim (PDR), and Mr. Moissinac (FAD). The team was assisted by Mr. Perone, the Fund’s Resident Representative in Mozambique.
“First generation reforms” are defined as including those reforms designed to restore basic equilibrium and make markets work more efficiently, including pricing, exchange rate, interest rate, tax, and expenditure reforms, and the establishment of basic market institutions.
Since 1984, Mozambique received seven successive debt reschedulings and one deferral from Paris Club creditors for a total amount of US$7.2 billion. Paris Club debt relief evolved from nonconcessional terms (1984, 1987) to Toronto terms (1990), to London terms (1993), to Lyon terms (1996, 1999), and to Cologne terms (2001). Mozambique also benefited from debt relief provided by multilaterals (including the Fund, IDA, and the African Development Bank) and some non-Paris Club creditors. Despite recurrent debt reschedulings, Mozambique’s debt dynamics remained unsustainable until the country benefited from the HIPC Initiative and the enhanced HIPC Initiative, which provided debt relief of over US$2 billion in NPV terms. This relief reduced Mozambique’s public external debt by more than 70 percent, resulting in a sharp decline in the ratio of the NPV of public external debt to exports from 550 percent at end-1998 to 92 percent at end-2002 (Figure 11).
“Second generation reforms” are defined as a set of measures needed to enable a country to achieve sustained high-quality growth. They include measures to develop appropriate institutions and frameworks within which markets can operate efficiently, improve governance and transparency, encourage private investment, boost productivity, and reduce poverty.
The staff report for the 2003 Article IV consultation provides a description of BIM’s current financial situation.