IMF Praises Fiscal Reform Progress In Mozambique

by Robert Lee, Tax-News.com, London

06 February 2009

In its most recent report, dated January 16, the International Monetary Fund commended progress in fiscal reform in Mozambique since the introduction of Policy Support Instrument (PSI), a board set up to advise the country on beneficial fiscal reform.

The recent report is the third review of Mozambique’s economic performance under a three-year PSI. The report finds that Mozambique’s reformed economic program and tax policies have reduced poverty markedly and been beneficial to the country’s growth. A statement from the IMF’s Executive Board notes that progression within Mozambique’s and the IMF's joint economic program remained on track, noting that all the quantitative and structural assessment criteria to end-June 2008 were met.

The PSI for Mozambique was approved on June 18, 2007 to support the nation’s economic reform efforts. It is aimed at consolidating macroeconomic stability and at achieving sustained economic growth and poverty reduction, through the pursuit of prudent macroeconomic policies as well as promoting structural reforms.

The IMF's framework for PSIs is designed for low-income countries that may not need, or want, IMF financial assistance, but still seek IMF advice, monitoring, and endorsement of their policies. PSI-supported programs are based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners and articulated in a Poverty Reduction Strategy Paper (PRSP). This is intended to ensure that PSI-supported programs are consistent with a comprehensive framework for macroeconomic, structural and social policies to foster growth and reduce poverty. Members' performance under a PSI is normally reviewed semi-annually.

Recommended