Bonds News

IMF Mozambique aid resumption unlikely next year - official

MAPUTO, Oct 19 (Reuters) - The International Monetary Fund (IMF) is not in discussion with Mozambique over a new aid programme for next year as the southern African nation was yet to explain gaps on how $2 billion in previously hidden loans was spent, a fund official said.

The IMF cancelled its funding last year after the emergence of the loans to three state-owned companies that were not approved by parliament or disclosed publicly, sending the nation’s currency into freefall.

“In terms of our projections we are not at the moment assuming that there will be a program next year,” IMF Africa Director Abebe Selassie said in a press briefing transcript posted on the fund’s website seen by Reuters on Thursday.

“There is no program discussion as you know, the engagement that we had has been interrupted ... until the gaps that have been identified by the audit that’s been done can be filled, so we are waiting for those to be completed.”

An independent audit of the debt showed in June that gaps remained on how the $2 billion was spent and roughly a quarter of the money remained unaccounted for.

The IMF had insisted on external scrutiny as a precursor to resuming financial aid to what is one of the world’s poorest countries. (Writing by Olivia Kumwenda-Mtambo; Editing by James Macharia)