Republic of Mozambique: Staff Report for the 2007 Article IV Consultation, Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, Request for Waiver of Performance Criterion, Financing Assurances Review, and Request for a Three-Year Policy Support Instrument—Informational Annex
Author: International Monetary Fund
Publication Date:
31 Jul 2007
eISBN:
9781451827316
Language:
English
Keywords:
ISCR; CR; debt; NPV; Mozambique; real GDP; public expenditure; central bank; Bank staff; lending program; private sector; Poverty reduction strategy; Tax administration core functions
Download PDF (381.2 KB)

This paper discusses the Republic of Mozambique’s 2007 Article IV Consultation and Sixth Review Under the Poverty Reduction and Growth Facility (PRGF). The post-conflict rebound has largely run its course, and first-generation reforms are completed; a second wave of reforms is needed to sustain broad-based growth and further reduce poverty. Achieving the non-income-related Millennium Development Goals also requires scaling up basic services without undermining macroeconomic stability. The PRGF program helped maintain macroeconomic stability in the face of exogenous shocks and addressed the structural weaknesses identified in the Ex Post Assessment.

Abstract

This paper discusses the Republic of Mozambique’s 2007 Article IV Consultation and Sixth Review Under the Poverty Reduction and Growth Facility (PRGF). The post-conflict rebound has largely run its course, and first-generation reforms are completed; a second wave of reforms is needed to sustain broad-based growth and further reduce poverty. Achieving the non-income-related Millennium Development Goals also requires scaling up basic services without undermining macroeconomic stability. The PRGF program helped maintain macroeconomic stability in the face of exogenous shocks and addressed the structural weaknesses identified in the Ex Post Assessment.

Mozambique: Relations with the Fund

(As of March 31, 2007)

I. Membership Status: Joined 9/24/84; Article XIV

II. General Resources Account

article image

III. SDR Department

article image

IV. Outstanding Purchases and Loans

article image

V. Latest Financial Arrangements

article image

VI. Projected Payments to Fund

(SDR Million; based on existing use of resources and present holdings of SDRs):

article image

VII. Implementation of HIPC Initiative:

article image

VIII. Implementation of MDRI Assistance:

article image

Safeguards assessment

Under the Fund’s safeguards assessment policy, the Bank of Mozambique (BM) is subject to safeguards assessment with respect to the PRGF Arrangement approved on July 6, 2004. The assessment, which was completed on August 18, 2004, identified weaknesses in the areas of financial reporting, internal audit, and the system of internal controls and proposed specific measures to address weaknesses. The implementation of these measures is being monitored by staff under the PRGF arrangement.

Exchange arrangements

Mozambique’s exchange system is a managed float. Commercial banks may buy and sell foreign exchange to individual customers on a fully negotiable basis. The Bank of Mozambique introduced a foreign exchange auction system in January 2005. Auctions are held bi-weekly.

Mozambique still avails itself of the transitional arrangements under Article XIV of the Fund Articles of Agreement, but has eliminated all Article XIV restrictions. It maintains, however, restrictions on the making of payments and transfers for current international transactions subject to Fund approval under Article VIII, as evidenced by (i) the discretionary prior approval for remittances of family living expenses; (ii) the authorization for the purchase of foreign exchange in excess of US$5,000 for certain transactions; (iii) the prohibition for the conversion of balances of nonresidents’ domestic currency accounts into foreign currency or transfer abroad; (iv) the prohibition on advance payments for a service; and (v) the prohibition on advance payments for the import of goods. At the authorities’ request, an Article VIII mission was conducted by LEG and PDR in March 2004. The mission encouraged the authorities to remove all existing the exchange restrictions. A new foreign exchange law was submitted to the Assembly in April 2007. Following approval of the new law and issuance of related regulations, the authorities intend to accept their obligations under Article VIII sections 2, 3, and 4 of the Fund’s Articles of Agreement.

Article IV consultation

In accordance with Decision No 12794-(02/76), as amended by Decision No 12854-(02/96), Mozambique is on a 24-month Article IV cycle due to the approval of a new PRGF arrangement in July 2004. The 2005 Article IV consultation was completed by the Executive Board on June 22, 2005 (Country Report No. 05/318).

In concluding the 2005 Article IV consultation, Executive Directors welcomed the substantial reduction in poverty realized over the past decade. At the same time, they stressed that stepped-up efforts are needed to further reduce poverty and, with the necessary financial assistance of the international community, reach the Millennium Development Goals. In particular, they looked forward to the new poverty reduction strategy paper for 2006-10. They noted, however, that a second wave of reforms is needed to deepen and accelerate structural changes to sustain high and broad-based growth. Directors emphasized that efforts should aim at (i) increasing tax revenues; (ii) strengthening public sector operations; (iii) reducing the costs of doing business; (iv) promoting labor intensive sectors; and (v) implementing a rural development strategy.

Ex Post Assessment of performance under Fund-Supported Programs

An ex post assessment (EPA) of Mozambique’s performance under Fund-Supported Programs since 1987 was undertaken in December 2003 under the guidelines on assessments of countries with a longer-term program engagement. The EPA was circulated to the Executive Board on November 21, 2003 (Country Report No. 04/53).

Directors commended the authorities for their pursuit of sound macroeconomic policies and wide ranging structural reforms over the past fifteen years which contributed to strong growth of the economy, and a steady decline in poverty rates. Noting that despite considerable progress Mozambique remains a very poor and vulnerable country, Directors urged the authorities to persevere in their efforts to consolidate macroeconomic stability and accelerate and deepen structural reforms with a view to sustaining economic growth, encouraging employment creation, and further reducing poverty.

FSAP participation and ROSCs

A Financial Sector Assessment Program (FSAP) for Mozambique was undertaken during the first quarter of 2003. The related Financial Sector Stability Assessment was circulated to the Executive Board on November 19, 2003 (Country Report No. 04/52). A ROSC on fiscal transparency was issued on February 22, 2001. This ROSC was updated in the context of the 2002 Article IV consultation (Country Report No. 02/140) and the 2003 Article IV consultation (Country Report No. 04/50). A Report on the Observance of Standards and Codes (ROSC) data module was prepared in June 2002 and issued on March 5, 2003. This data module was updated in August 2005.

Management’s visit

At the invitation of the authorities, Mr. Kato, Deputy Managing Director, visited Maputo, Mozambique in July 2005.

IMF Technical Assistance Provided to Mozambique

(Over the Last Three Years)

article image
article image
article image

Resident Representative: Mr. Felix Fischer has been IMF’s Resident Representative to Mozambique since March 1, 2006.

Mozambique: Relations with the World Bank Group

(As of May 7, 2007)

Partnership in Mozambique’s development strategy

1. The Mozambican government’s development strategy is set forth in its second generation poverty reduction strategy paper (PRSP), termed the PARPA-II (Plano de Acção para a Redução da Pobreza Absoluta, or Action Plan for the Reduction of Absolute Poverty), which was approved in May 2006 by the council of ministers and endorsed by the Boards of the Fund and the Bank in December 2006, when they discussed a Joint Staff Advisory Note of PARPA II. The Fund and the World Bank will continue to cooperate closely, within their respective mandates, in assisting the government to implement its medium-term poverty reduction and growth strategy and the related reform agenda, as presented in the PARPA-II and updated in the annual progress report and PAF.

2. The Fund will continue to lead the policy dialogue on macroeconomic policy, (including fiscal, monetary, and exchange rate policies), the integrated financial management information system (SISTAFE), and tax and customs reforms. The Bank will continue to lead the policy dialogue on public expenditure management, sectoral structural reforms, the reform of the civil service, and the Poverty and Social Impact Analysis (PSIA). Areas of close collaboration include banking supervision and financial sector issues, trade issues, the PARPA and its further development, and external debt sustainability.

Bank group country assistance strategy

3. The current CAS (FY04-07) is a Results-based strategy, prepared jointly with IFC and MIGA. Preparation of a new Country Partnership Strategy jointly with four donors has started in support of the agenda of the Paris Declaration on Harmonization. The Bank is coordinating with partners through a peer review process and harmonization of analysis and results frameworks. The three pillars of the current CAS are (i) improving the investment climate, (ii) expanding service delivery, and (iii) building capacity and accountability. A CAS Progress Report, an evaluation of the Bank’s program during the first two years of implementation has been completed and presented to the Board in March 2006. The focus of the Bank’s lending program is on programmatic support through four rolling Poverty Reduction Support Credits (PRSCs), of which the first two credits have been approved and fully disbursed. Fiduciary issues are fully taken into account within the scope and sequencing of the PRSCs. The shift to programmatic lending through the PRSCs was underpinned by the Bank’s core diagnostic economic and sector work, including the public expenditure review and PSIA. While a series of PRSCs is the largest single element in the lending program, the shift from traditional investment lending to program lending is being phased in gradually. Selected investment projects are targeting institutional strengthening, capacity building, transport infrastructure, water, agriculture, and communications. The new Country Partnership Strategy for Mozambique (FY08—11) will be discussed by the Board on May 22, 2007.

4. To date, the World Bank Group has approved 7 adjustment operations, 3 development policy operations, one investment guarantee and 48 investment operations totaling approximately US$3.2 billion. The CAS financing plan for FY04-07 included lending financing, grant resources and guarantee coverage for US$560 million, of which $538 million (US$288 in investment operations and US$250 million in three Poverty Reductions Support Program credits) and US$30 million in an IBRD guarantee have been approved. One additional investment operation is scheduled to be delivered before the end of the CAS period. The graph below illustrates the distribution of the current portfolio by main sectors.

uA03fig01

World Bank Lending in Mozambique

(as of May 2007)

Citation: IMF Staff Country Reports 2007, 262; 10.5089/9781451827316.002.A003

5. The World Bank has been actively supporting the government of Mozambique’s macroeconomic program since 1986 through a series of structural adjustment operations. The last, the Economic Management and Private Sector Operation (EMPSO), was approved by the Bank Board in August 2002 for US$120 million. The EMPSO supported the government’s program of consolidating macroeconomic stability and laying the foundations for sustained private sector-led growth over the medium term. It included measures to make the budget more transparent (including accounting for external aid flows), conduct a public expenditure review, strengthen the financial sector while aiming to eliminate government ownership in the sector, and liberalize the telecommunications and air transport sectors in order to facilitate further private participation. Since 2004, the Bank’s quick-disbursing assistance has taken the form of development policy lending through PRSCs, which have been developed in tandem with the Joint Review/Performance Assessment Framework. Three PRSCs have been presented to the Board so far (in July 2004, September 2005, and January 2007), valued at US$60 million, US$120 million, and US70 million respectively. The third PRSC credit is the first operation to support the PARPAII.

6. The World Bank has been an active partner in supporting the government in improving education and strengthening capacity building in key public institutions. The Education Sector Strategic Program (US$71 million—FY99, closed in December 31, 2007) supported the implementation of the National Education Strategy, whose objectives are the promotion of sustained improvements in the quality of Mozambique’s labor force, and greater gender and regional equity in economic opportunities. The Higher Education Project (US$60 million—FY02) supports the entire higher education system, including both public and private institutions of higher education. The Technical and Vocational Education and Training project (US$30 million—FY06) is the first operation in the tertiary and vocational education area.

7. In health, the Health Sector Recovery Project (US$98.7 million—FY96, closed in 2003) supported the government’s broad Health Sector Recovery Program, especially by reducing infant and child mortality. The HIV/AIDS Project (US$55 million—FY03) assists the government in carrying out its National Strategic Plan to Combat STDs and HIV/AIDS. The HIV/AIDS Treatment Acceleration Project (US$21 million—FY04) assists the Government in scaling up ongoing HIV/AIDS treatment initiatives using a combination of public/private/NGO partnerships to serve vulnerable groups. A new health operation is under preparation for FY08.

8. In the area of transport and infrastructure, the Bank has three active projects. The Railways and Ports Restructuring Project (US$100 million—FY00) aims at increasing the operating efficiency of the three major port-rail systems in Mozambique. The Roads and Bridges Project (US$162 million—FY02) aims at improving road infrastructure, sector policies, and management, and the Beira Railway Project (US$110 million—FY05) aims to improve the cost-effectiveness and efficiency for freight and passenger rail transport in the Zambezi Valley and beyond. The second phase of the Roads and Bridges project (US$100 million) will be presented to the Board on May 22, 2007.

9. In the water sector, one project—the National Water Development Project I (NWDP I) (US$36 million—FY98)—closed on October 31, 2006, the National Water Development Project II (NWDP II) (US$75 million plus US$15 supplemental—FY99, FY04)—support improvements in service delivery standards, coverage, water resources management, and management capacity in both rural and urban areas. The NWDP II also supports private sector management of water services in five major cities.

10. Another important part of the Bank’s portfolio focuses on strengthening the investment climate and encouraging private sector participation. The current Bank CAS has been prepared jointly with the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). IDA recently closed the Enterprise Development Project (US$26 million—FY00,) which aimed at broadening the base of private participation in the Mozambican economy. The Mineral Resource Management Capacity Building Project (US$18 million—FY01) seeks to increase institutional capacity in the sector, and alleviate poverty. The Communications Sector Reform Project (US$14.9 million—FY02) seeks to increase private sector participation in the postal, air transport, and telecommunications sectors.

11. As regards public sector reform, the Public Sector Project (US25.6 million—FY03) seeks to upgrade the quality of public services, reduce red tape, and improve access to public services. The Municipal Development Project (US$33.6 million—FY01, closed in February 2007) aimed to strengthen the institutional capacity of municipal government and pilot a municipal grant mechanism to finance investment. The Maputo Municipal Development Program (US$30 million, FY07) aims to strengthen the capacity of the Maputo City Council to develop, manage and maintain quality service delivery to its citizens. Finally, the Decentralized Planning Financing Project (US$42 million—FY04) supports improvements to the institutional capacity of district administrations. The Financial Sector Technical Assistance project (US$10.5 million—FY06) supports implementation of the recommendations of the Financial Sector Assessment Program jointly conducted with the Fund in 2003.

12. The Bank is also involved in agriculture, energy, and the environment. The Agricultural Sector Public Expenditure Program (US$30 million—FY99, closed in December 2006)), was a sectorwide assistance program (SWAP) that sought to improve the impact of public expenditure in developing an enabling environment for sustainable and equitable growth in the rural sector. The Gas Engineering Project (US$26 million—FY94), which closed in 2003, supported pre-investment in the Pande-Gas Project and provided capacity building to the government for negotiation of megaprojects. This operation supported capacity and technical assistance for negotiation and implementation of the Southern Africa Gas project, a pipeline financed by SASOL of South Africa with equity participation of IFC and guarantee coverage of MIGA (US$30 million—FY04. The Energy Reform and Access Project (US$40.2 million—FY04), which supports reform of the power sector, in particular the separation of distribution, transmission, and generation functions, aims at increasing the number of electricity connections, solar energy distributors, and seeks to provide a more efficient service. The World Bank Group is also supporting sustainable use of natural resources with two operations in environment: the Coastal and Marine Biodiversity Management Project (US$9.7 million—FY00), which pilots an integrated approach to achieving sustainable development, focusing on two main coastal areas, and the second credit of a Transfrontier Conservation Areas and Tourism project (US$20 million plus US$10 million in a Global Environment Facility grant—FY06). A Market-led Smallholder Development project of US$30 million was approved in FY06.

13. The Bank’s program also encompasses economic and sector work to support the three pillars of the CAS, involving work on the following:

  • Improving the Investment Climate. Economic and sector work completed over the past two fiscal years included a strategy for rural growth and income creation and a country economic memorandum on sustainable growth and poverty reduction, which also analyzed the sources of growth. Technical assistance is currently being provided in procurement reform, mining and on commercial debt reduction. A PSIA on labor market and a PSIA on land are planned for preparation in FY06-07, together with a study on regional growth poles.

  • Expanding Service Delivery. Work completed has involved a country status report on health; a technical assistance on health budget management; a report on the status of the health Millennium Development Goals; a Poverty and Social Impact Assessment (PSIA) on primary school fees; an assessment on labor markets and technical education; a study on private sector competitiveness; a study on local service delivery; and a report on water resource management. Ongoing and planned studies include a poverty assessment, a rural strategy, a country environmental and social assessment.

  • Building Capacity and Accountability Investing in People. Work completed includes a country procurement assessment report, a legal and judicial assessment, an institutional governance review including a survey on corruption, a public expenditure review and ongoing technical assistance on public expenditure management.

  • Monitoring and Evaluation. The Bank provided technical assistance to the Government to finalize and monitor its first PRSP M&E system, the Strategic Matrix of PARPAII. The Bank is currently supporting the preparation of a Monitoring Plan to implement the Strategic Matrix.

IMF-World Bank collaboration in specific areas

14. Fund and Bank staff maintain a close working relationship, with the lead taken by one or both institutions, especially with respect to (i) analyses and reforms in public expenditure management; (ii) the PARPA and accompanying annual updates and joint staff advisory notes; (iii) the financial sector and banking supervision; (iv) PSIA; (v) tax issues; (vi) trade issues; and (vii) external debt sustainability analysis:

  • Public expenditure management. The Fund and the Bank jointly emphasize the urgent need to further improve public expenditure management, accountability, and transparency. The two institutions support policy reforms in the areas of budget formulation, execution, and monitoring. The IMF assists the authorities in introducing the integrated financial management information system (SISTAFE), and several donors, including the World Bank, provide financial support and policy advice for this reform. Under the Fund’s leadership, a group of 10 donors set up a common fund for this large undertaking. The Bank’s PRSC emphasizes budget comprehensiveness and budget execution reporting.

  • Poverty reduction strategy paper. The Fund and Bank worked together with the government during 1999-2001, while the PARPA was being produced, and drafted the joint staff review, which was presented to the Board in September 2001. The government issued annual progress reports in 2003, 2004 and 2005 and the staff presented their joint staff assessments to their respective Boards. The Bank and the Fund worked again with the government during the preparation of PARPA II and elaborated the Joint Staff Advisory Note in 2006.

  • The Fund and the Bank are finalizing preparation of a JSAN on the Government’s revised PARPA, officially approved at the end of September 2006. The PARPAII incorporates a Strategic Matrix which is the basis for the M&E system.

  • Financial sector. The Fund and the Bank have worked together on the financial sector. The banking sector in Mozambique has repeatedly shown weaknesses in the past, requiring recapitalizations and intervention. Following the FSAP conducted in Mozambique during the first semester of 2003, the Fund and the Bank continue to advise the authorities on strengthening financial supervision and accounting standards to prevent the recurrence of such problems in the future. The Financial Sector Technical Assistance Project was approved in FY06.

  • PSIA. As part of the ongoing Bank budget support and the programs supported by the IMF, the Fund and the Bank have agreed to review closely the poverty and social impact of the key reforms that are being implemented. A pilot PSIA, advising the government on the impact of an increase in specific fuel taxes, was undertaken in 2002. A second PSIA, on the impact of reducing primary schooling fees, was completed in October 2004. A third PSIA in FY07 analyzed the likely impact of the proposed new Labor Law. A PSIA following up on the previous study on the elimination of primary schooling fees will be finalized in FY08.

  • Taxes. The Fund has taken the lead in this area. The government issued a new income tax law in 2002 and a revised code of fiscal incentives for investors. The Bank has been supportive of the policies proposed. Further reforms to strengthen tax revenues and to improve the efficiency of tax administration are part of Mozambique’s regular dialogue with the Fund.

  • Trade. The Fund and the Bank have worked together since the early 1990s on trade issues concerning general reductions in tariffs, the variable tariff on sugar introduced in 1999, and the reduction in the export tariff on raw cashews. The Fund and the Bank are involved in reforming the customs administration in Mozambique. The Bank is cooperating with the donors (particularly USAID) and the government in executing the studies on trade policy required for the Integrated Framework.

  • External sustainability analysis (DSA). The Bank and the Fund work jointly in preparing an annual DSA, in consultation with the authorities. The latest DSA was finalized in May 2007.

15. In 2007 and 2008, disbursements under World Bank investment projects are expected to reach around US$184 million on average a year.

World Bank Loan and Grant Operations, 1999-20061

(In million U.S. dollars)

article image
article image
Source: World Bank.

Date of Board approval in brackets.

Closed.

Grant.

Mozambique: Statistical Issues

1. Data provision to the Fund for surveillance purposes is adequate, but the overall quality of macroeconomic statistics still hinders policy formulation and monitoring of economic development. Moreover, despite the increase in budget resources allocated to the compilation of official statistics, continued high reliance on external funding raises concerns about the sustainability of the programs of the National Institute of Statistics (INE).

2. In May 2005, an STA mission updated the data module of the Report on the Observance of Standards and Codes (ROSC) prepared in June 2002. The mission noted that significant effort has been made to address the shortcomings identified by the 2002 ROSC mission, a clear indication of the increased awareness of the importance of compiling and disseminating statistics that follow international standards and good practices. The improvements in the institutional environment and the increased allocation of resources for the compilation of national accounts, balance of payments, and more recently, government finance statistics should help to address weaknesses in the prerequisites for the quality of the statistics. The methodological soundness, accuracy, and reliability of the macroeconomic statistics are starting to show improvements as a result of these actions.

3. The authorities are committed to adhering to internationally accepted standards and good practices, as demonstrated by their participation in the IMF’s General Data Dissemination System (GDDS) since November 2003. GDDS metadata are posted on the IMF’s Data Standards Bulletin Board (DSBB) website, and on the INE’s website. In August 2004, the INE’s webpage was replaced by a portal with search capabilities to improve the accessibility of available data and metadata.

National accounts

4. The national accounts are prepared by the INE in accordance with the 1993 System of National Accounts (1993 SNA). The INE compiles and disseminates (i) annual GDP at current and constant (1996) prices by activity; (ii) annual GDP by expenditure items at current and constant prices; and (iii) annual value added components at current prices by activity. Work is under way to compile the new benchmark year (2000) with new and improved data sources and methodology. The INE has launched a new household income and expenditure survey and new economic censuses leading to a new business registry. Furthermore, the INE is compiling more comprehensive and timely foreign trade data based on improved classification systems. The new national accounts framework will also include compilation of quarterly estimates expected to be disseminated shortly.

Prices and labor market

5. A new consumer price index for Maputo based on weights derived from the 2002-03 household survey was released in February 2006. The previous series, available since 1998, was widely criticized for narrowly focusing on a few basic food staples with relatively volatile prices and, therefore, exhibiting large swings. A national index obtained by integrating the indices for Maputo, Beira, and Nampula was released in April 2006. The IMF has provided technical assistance in price statistics in the context of the GDDS Regional Project for Lusophone African Countries. The last technical assistant mission (June 11-July 21, 2006) under the GDDS project found important advances regarding the use of the COICOP classification and the strengthening of human resources in the compilation of the new CPI. Several issues remain outstanding, however, such as price collection procedures not fully consolidate at the provincial level, imputation methods, and possible inconsistencies in the overlapping period between the new and old series.

6. There are insufficient sectoral labor market and employment data, and where available, they have limited coverage. A one-year labor market survey of the entire country, undertaken by INE in collaboration with the Labor Ministry, was launched in October 2004.

Monetary statistics

7. An STA mission in September 2004 prepared a work plan for the implementation of the Monetary and Financial Statistics Manual (MFSM) and the development of an integrated monetary database (IMD) to meet the needs of the Bank of Mozambique (BM), AFR, and STA. The mission noted progress in the information system and in the periodicity and timeliness of the data compiled. The mission found that the Bank of Mozambique’s chart of accounts was inadequate to compile monetary statistics fully aligned with the MFSM with regard to the sectorization of the institutional units and the breakdown between local and foreign-currency-denominated accounts. The mission recommended improving the classification and valuation of some financial instruments, and estimating the full instrument and sectoral breakdown based on available information. The mission also recommended expanding the coverage of the survey on other depository corporations by including the credit cooperatives, in the medium term.

8. Mozambique is already using the new standardized forms (SRFs) for reporting monetary data to STA. As a result, five-year historical enhanced data are being published in the IFS Supplement, first issued in September 2006. The IMD consistent with the SRFs is in the process of becoming fully operational, which will allow the derivation of accurate and timely monthly monetary statistics that meet the needs of STA, AFR, and the authorities, while reducing BM’s reporting burden.

External sector statistics

9. With assistance from STA, the BM has made significant progress toward compiling and disseminating balance-of-payments (BOP) and international investment position (IIP) statistics that are fully aligned with the Balance of Payments Manual, fifth edition (BPM5). This assistance is also being provided in the context of the GDDS regional project.

10. The BM has an adequate institutional framework for the compilation of BOP and IIP statistics, and has implemented many of the recommendations made by the four technical assistance missions conducted since mid-2003. However, in order for the work on institution building to be consolidated, the Foreign Exchange Law has to be approved (incorporating the definition of residency in alignment with he BPM5 methodology), training on BOP statistics has to be sustained, and the project to computerize the balance of payments compilation system has to be completed. The major improvements in the basic sources of data from the beginning of the project comprise (i) the distribution of the new BOP surveys to more than 35 enterprises, including the megaprojects; (ii) program improvements by Customs to ensure the quality of external trade data; (iii) improvements in the reports on foreign investment and private loans prepared by the BM; (iv) improvements in the reports on the external public debt provided by the Ministry of Finance; and (v) improvements in the banks’ reports on foreign currency transactions.

11. Other important concerns include (i) the coverage and quality of the data obtained in the enterprise surveys, such as data from the other SASOL1 projects; (ii) the quality of external trade data, especially with regard to price and volume indices; (iii) the coverage, time of recording, and classification of the data on foreign investment and private loans; (iv) completeness of data for the Reserves Template and their reconciliation with the reserve component of the balance of payments; and (v) compiling the IIP using the sources that are used for the balance of payments compilation.

12. The BM has started to compile partial IIP data, which were published in the 2005 Balance of Payments Statistics Yearbook.

Government finance statistics

13. In recent years, technical assistance has been provided under the GDDS Project for Lusophone countries. The July 2005 mission found that while the authorities have made significant efforts to improve fiscal data, serious weaknesses remain.

14. The creation of a statistical unit in the MOF and the launching of the Integrated Management and Financial Information System (SISTAFE) will contribute to enhance the analytical usefulness of government finance statistics in the near future. However, the mission found that the budget system, while broadly aligned to the GFSM 1986 analytical framework, is inadequate to compile GFS. In particular, further work is needed to improve institutional and transactional coverage.

15. Mozambique does not report fiscal data for publication in the IFS or the Government Finance Statistic Yearbook (GFSY).

Mozambique: Table of Common Indicators Required for Surveillance

(As of May 21, 2007)

article image

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extrabudgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), and Not Available (NA).

Reflects the assessment provided in the data ROSC published in March 2003 and based on the findings of the June 2002 mission for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO). No changes were proposed by the update mission of May 2005.

Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies. No changes were proposed by the update mission of May 2005.

1

The Multilateral Debt Relief Initiative (MDRI) provides 100 percent debt relief to eligible member countries that are qualified for the assistance. The debt relief covers the full stock of debt owed to the Fund as of end-2004 which remains outstanding at the time the member qualifies for such debt relief. The MDRI is financed by bilateral contributions and the Fund’s own resources, as well as the resources already disbursed to the member under the HIPC Initiative (see Section VII above).

1

Conglomerate of five enterprises from South African Coal, Oil, and Gas Corporation.

Same Series

Other IMF Content

Other Publishers

Cover IMF Staff Country Reports
Republic of Mozambique: 2007 Article IV Consultation, Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, Request for Waiver of Performance Criterion, Financing Assurance Review, and Request for a Three-Year Policy Support Instrument: Staff Report; Staff Supplement; Public Information Notice and Press Release on the Executive Board Discussion; and Statement by the Executive Director for the Republic of Mozambique
Author: International Monetary Fund
Volume/Issue:
Volume 2007: Issue 262
Publisher:
International Monetary Fund
ISBN:
9781451827316
ISSN:
1934-7685
Pages:
120
DOI:
https://doi.org/10.5089/9781451827316.002

World Bank Lending in Mozambique

(as of May 2007)