September 26, 2018 / 4:44 PM / 3 months ago

Mozambique consulting IMF on economic reform, no loans on agenda

NEW YORK, Sept 26 (Reuters) - Mozambique, cut off from multilateral donors, said on Wednesday it is working with the International Monetary Fund to bring economic reforms and transparency in an effort to rebuild credibility after a debt scandal, but no loans are promised.

“The IMF is not giving loans but they are helping in programs for macroeconomic stability, those measures that will attract investors to come to the country,” President Filipe Nyusi told Reuters in an interview on the sidelines of the U.N. General Assembly meeting in New York.

Nyusi, who took office in 2015, said through a translator his government development program was knocked off course after the heavily indebted nation was cut off from multilateral and foreign donors after the government admitted to $1.4 billion of previously undisclosed loans in 2016.

Credit rating agency Fitch Ratings affirmed its restricted default opinion on Mozambique on Friday, citing “the sovereign’s failure to cure the default on debt to external commercial creditors.” Fitch said it does not anticipate a near-term resolution to the default.

After an audit of the loans, which were not authorized by the East African nation, Nyusi said there has been progress with the IMF visiting to make recommendations for macroeconomic reforms while also addressing transparency and accountability.

“We are discussing all of this with the IMF with a view to unlocking this, bringing back credibility,” he said.

“Slowly, we have seen investors coming back. Not at the same level as we would like it to be.”

Nyusi said foreign direct investment was increasing and helping boost economic growth in 2017 by 3.7 percent. He forecast growth of more than 4 percent in 2018.

One area of growth is in oil and gas but civil unrest in its northern provinces in the past year has created a cautious environment for the sector.

U.S. petroleum company Anadarko Petroleum has a $15 billion liquefied natural gas project in the area.

“Any unrest or any problem to law and order is a threat to investment, of course,” said Nyusi, who assured security forces have the area under control, but also blamed some of the unrest on people coming from outside the country.

“There is no threat in terms of hydrocarbon investments,” Nyusi said. “Indeed, even yesterday I spoke to Anadarko. We’ve been coordinating efforts. I intend to talk to ExxonMobil tomorrow and I’ll be talking to the Italian companies as well.”

Reporting By Daniel Bases Editing by Bill Trott

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