On 21 December 2021 the IMF issued a report following discussions with Mozambique under Article IV of the IMF’s articles of agreement.

The report notes that Mozambique needs to take decisive policy action to ensure that its debts are sustainable and to make available further resources for essential government expenditure.

More government revenue could be achieved through reforms in tax policy. The VAT exemptions could be rationalised to raise more revenue, while ensuring that the impact on lower income groups is minimised. Reforms of revenue administration could also lead to higher tax collection. More revenue for priority expenditure would become available if reforms are made in public financial management.

Mozambique needs to strengthen the regime for anti-money laundering and combating the financing of terrorism (AML/CFT). Important deficiencies in technical compliance and implementation of the regime were found by the Eastern and Southern Africa Anti Money Laundering Group in a recent assessment. Reform is required to avoid inclusion on the grey list of the financial action task force (FATF). Reforms are planned to the AML regime to allow the collection and maintenance of information on beneficial ownership. Technical assistance has been obtained for designing a risk-based AML/CFT supervision framework.

Mozambique could use its wealth from natural resources to support economic development if the process is well managed. Further revenue for priority government expenditure could be raised from higher growth and fiscal revenue from liquid natural gas (LNG).

To avoid the problem of dependence on natural resources, Mozambique needs to encourage economic diversification. The National Strategy for Development (ENDE) is being updated, with input invited from a range of stakeholders from Mozambique and the international community. This could result in further progress on diversification of the economy.