The Mozambican Association of Economists (AMECON) considers "a lesser evil" the resumption of financial assistance from the International Monetary Fund (IMF) to the country. However, the association believes that there must be "caution", since the financing of this entity will mean more debt.

The IMF announced last month that it has reached an agreement with Mozambique to implement an Extended Fund Program (EFF) until 2025, disbursing financial aid for the first time since the hidden debt scandal.

"The IMF team has reached a technical agreement with the Mozambican authorities for a three-year program supported by an AFP in the amount of $470 million," IMF country team leader Álvaro Piris announced.

Speaking to Lusa this Tuesday, Pedro Cossa, president of AMECON, described the financing of the organization as "a lesser evil", pointing out that it will imply more debt, but under more favorable conditions than those offered by other creditors.

"I say it's a lesser evil, but I don't see any reason for much enthusiasm, even though we have to resort to the IMF, given the facilities that the IMF offers" in its financing, he stated.

The other advantage, he continued, is the sign of confidence, because the reputation of the institution encourages other partners and investors to believe in Mozambique.

"This signal can also bring those supports," Pedro Cossa noted.

The economist emphasized that the country needs to continue to mobilize internal resources to finance the economy, by broadening the tax base, to reduce vulnerability to the uncertainties of external flows.

"With the closure of external sources of financing, the country turned to the domestic market and we saw a growing domestic capital market," he stressed, noting that recourse to external debt is "inevitable" in the current circumstances of Mozambique's economy.

The IMF was one of several international partners that suspended financial aid to Mozambique following the disclosure in 2016 of loans from public companies that had not been announced to either parliament or international donors.

The process, known as the hidden debts scandal, involved several members of the government led by Armando Guebuza, in which the current President was Minister of Defense, the area in which the public companies that contracted the hidden loans operated.