Press Release No. 05/298

Press Release: IMF to Extend 100 Percent Debt Relief to Mozambique Under the Multilateral Debt Relief Initiative

December 23, 2005

Mr. Perry Perone, the IMF Senior Resident Representative in Mozambique, issued the following statement on December 22 in Maputo:

"Under the Multilateral Debt Relief Initiative (MDRI), the IMF Executive Board has approved debt relief for Mozambique. As part of the Initiative, the IMF will provide 100 percent debt relief on all debt incurred by Mozambique to the IMF before January 1, 2005 that remains outstanding. This amounts to approximately US$153 million, or US$119 million excluding remaining assistance under the Heavily Indebted Poor Countries (HIPC) Initiative. This debt relief should become available in early January as soon as the remaining consents of the contributors to the PRGF Trust Subsidy Account have been received. The international community has made these additional resources available to help Mozambique make progress toward its Millennium Development Goals (MDGs).

"Mozambique has qualified for IMF debt relief because of its overall satisfactory recent macroeconomic performance, progress in poverty reduction, and improvements in public expenditure management. Mozambique has enjoyed robust economic expansion with declining rates of inflation over the last three years, the government has established a sound record of implementing the Poverty Eradication Action Plan (PARPA), and it has improved public expenditure management systems. Performance in these areas provides assurance that resources made available under Multilateral Debt Relief Initiative will be used effectively.

"The IMF looks forward to working with Mozambique to help it develop a strong and stable economy and to make sustained progress toward the MDGs," he said.