JOHANNESBURG (Reuters) -The International Monetary Fund and Mozambique have reached a staff-level agreement on a $470 million facility, the Fund said on Monday, in what would be the African nation's first programme since the global lender suspended support six years ago.
In 2016, Mozambique unveiled hefty state-backed borrowing it had previously failed to disclose, in a $2-billion corruption scandal that prompted donors to cut off aid and sparked a currency collapse and debt crisis.
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.
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.