Mozambique and the International Monetary Fund have agreed to a loan of roughly $500 million, the first since the IMF discontinued financing six years ago.
A statement from the Fund said final approval for the three-year Extended Credit Facility was expected to come from IMF management “in the coming weeks”.
“In recent years the Mozambican economy has been hit by a series of severe shocks that risk intensifying vulnerabilities and worsening socioeconomic conditions,” the IMF said in a statement.
Final approval of the $500 Million is likely in the coming weeks, according to the IMF.
Following a $2 billion corruption scandal in 2016, international donors shut off help to Mozambique.
Senior officials are currently facing charges of taking out large loans without telling the legislature or donors.
Mozambique, one of the world’s poorest countries, had a currency collapse and debt crisis as a result of the cessation of international help.
It said the government’s medium-term programme focused on economic growth, fiscal sustainability, and reforms in public financial management and governance.
One of the world’s most impoverished countries, Mozambique is still grappling with its hefty debt burden, as well as an Islamist insurgency and the impact of COVID-19, which led to its first economic contraction in three decades last year.