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| IMF in Mozambique: Daniel Chapo and IMF meeting in Maputo, 2025 |
Could this be Mozambique’s economic turning point after years of crisis?
| May 19, 2025 | Maputo, Mozambique
New President, New Hopes
Mozambique's new president, Daniel Francisco Chapo, is starting to make waves on the international stage. On Saturday, May 17, he hosted a high-level meeting in Maputo with Bo Li, the Deputy Managing Director of the International Monetary Fund (IMF).
The result? A strong signal of renewed trust: the IMF confirmed that a new technical and financial support agreement will be signed this year.
“This meeting laid the foundation for a new cooperation program between Mozambique and the IMF,” read a statement from the Presidency. “This program aims to support Mozambique’s economic recovery and reform the public administration.”
Breaking from the Nyusi Era?
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| Former President Filipe Nyusi at IMF, faced criticism over debt scandals. |
This potential New Deal could mark a break from the past — especially from the era of President Nyusi, often criticized for excessive public spending, rising debt, and weakening state institutions. That period left public coffers nearly empty and the economy gasping for air.
But for the new program to move forward, Mozambique must prove it's serious. The IMF wants strong commitments: cutting public wage bills, removing tax exemptions, and modernizing tax collection.
“Mozambique must take bold steps and work on fiscal consolidation,” said Olamide Harrisson, the IMF's representative in Mozambique.
Mozambique’s Fiscal Challenges
Mozambique's economy is still struggling. The IMF recently ended its previous program — the Extended Credit Facility (ECF) — after delivering a final $60.7 million in April. That brought total disbursements under the program to $273 million.
But the picture remains grim:
Debt is nearly 100% of GDP
Interest payments equal 4.5% of GDP
Domestic revenue missed targets
Foreign aid is shrinking
Post-election instability hit the economy
And while the Bank of Mozambique has remained strict in monetary policy — under Rogério Zandamela, a Mozambican economist with close ties to the IMF — the previous government was accused of reckless domestic borrowing to pay bills and fund questionable projects.
Who Are the Key Economic Players?
Despite the IMF’s optimism, the real test will come in the next few months. Can Chapo prove he is a responsible economic manager — both in Maputo and in Washington, D.C.?
His government includes respected technocrats like:
Basílio Muhate (Minister of Economy)
Carla Louveira (Minister of Finance)
Salim Valá (Minister of Planning & Development)
Amílcar Tivane (Treasury Secretary)
Together, they aim to rebuild credibility — and avoid further economic isolation.
“We’re impressed by the steps taken so far, especially to reduce the size of government and fight corruption,” said Bo Li.
External Pressures from the West
But the road ahead won’t be easy. Under President Donald Trump, U.S. support for Mozambique has dropped sharply:
USAID and Millennium Challenge Corporation (MCC) have reduced funding.
UNFPA, which supports public health programs, is facing deep cuts.
This affects thousands of Mozambicans living with HIV/AIDS and relying on global aid programs.
If Chapo fails to restore ties with the West, the risk is high. But if he balances relations with BRICS+ countries and Western donors, Mozambique could unlock major funding for the next 50 years.
Read Also: Ibrahim Traoré Meets Vladimir Putin in Russia: What’s Next for Burkina Faso and Africa?
What’s Next for Chapo?
President Chapo’s challenge is geopolitical as much as financial. Can he build a new national vision without making powerful enemies?
For now, the IMF seems ready to walk with him — but only if Mozambique sticks to reforms and finally ends the spending chaos of the past.