In line with the 2010 Staff Guidance Note, a full joint LIC DSAs is expected to be prepared once every three years for PRGT-eligible IDA-only countries. In between, short annual updates are expected to be produced unless macroeconomic conditions since the last full DSA have significantly changed. See Staff Guidance Note on the Application of the Joint Fund-Bank Debt Sustainability Framework for Low-Income Countries (www.imf.org) and IDA/SECM2010-0029.
The DSA presented in this document is based on the standard low-income countries (LIC) DSA framework. See Debt Sustainability in Low-Income Countries: Further Considerations on an Operational Framework, Policy Implications (www.imf.org) and IDA/SECM2004/0629. Under the Country Policy and Institutional Assessment (CPIA), Mozambique is rated as a medium performer, with an average rating of 3.71 during 2008–10, and the DSA uses the indicative threshold for countries in this category.
See IMF Country Report No. 11/149.
To date, authorities have signed three nonconcessional loans: (i) in December 2010, a loan from China amounting US$66 million to modernize Maputo airport; (ii) in April 2011, a loan from Brazil for the construction of Nacala airport of US$80 million, and (iii) in February 2012, a US$300 million loan from China for the construction of a ring road around Maputo.
In line with the last two DSAs, the standard export shock has been tailored to capture Mozambique’s true vulnerability from an export shock. This is represented by the historical volatility of prices of aluminum, which accounts for roughly half of Mozambique’s export proceeds.
For a more detailed explanation of the impact of different megaprojects, see IMF CR No. 11/350, Annex II.
This is not expected to affect the availability of credit to the private sector.