MAPUTO, June 10 – Mozambique is seeking the restoration of direct budget support from the World Bank as part of broader efforts to strengthen fiscal stability, improve debt sustainability and accelerate economic recovery.
The initiative comes as the southern African nation hosts simultaneous high-level missions from both the World Bank and the International Monetary Fund (IMF), highlighting growing international engagement with the country’s economic reform agenda.
An IMF team led by Mission Chief Pablo Lopez Murphy is visiting Maputo from June 8 to 12 to assess recent economic developments and discuss policy measures aimed at strengthening public finances and ensuring long-term debt sustainability.
According to the IMF, discussions are focused on reviewing the government’s economic reform plans and identifying ways the Fund can support Mozambique’s stabilization efforts going forward.
The IMF mission coincides with a visit by senior World Bank officials, during which five financing agreements worth a combined $450 million were signed.
The agreements cover key sectors including social protection, agriculture, water and sanitation, education and skills development.
Mozambique’s Finance Minister, Carla Louveira, said restoring direct budget support remains a central objective of ongoing discussions with the World Bank.
Direct budget support was suspended following Mozambique’s hidden debt scandal nearly a decade ago, which significantly damaged investor confidence and strained relations with international development partners.
Louveira explained that the World Bank’s Development Policy Operation framework could be activated once Mozambique meets agreed benchmarks relating to macroeconomic management, debt sustainability and financial governance.
“This is a very close coordination we are having with the Bank,” Louveira said, adding that the issue had also been raised by President Daniel Chapo during recent engagements in Washington.
The push for renewed budget support comes as Mozambique confronts a series of economic challenges, including climate-related flooding and external pressures linked to ongoing geopolitical tensions affecting global energy and commodity markets.
Officials say these shocks have increased the urgency of securing additional financing and strengthening economic resilience.
The newly signed $450 million financing package forms part of a broader World Bank partnership framework valued at approximately $10 billion.
Under the framework, around $6 billion has been allocated to public sector initiatives, while a further $4 billion is earmarked for private sector development.
The discussions underscore Mozambique’s efforts to rebuild confidence among international lenders while advancing reforms designed to improve fiscal discipline, strengthen governance and attract long-term investment.
For the government, the restoration of direct budget support would represent a significant milestone in its efforts to normalize relations with development partners and secure additional resources for economic development and social programs.
