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Friday, 7 July, 2000, 14:30 GMT 15:30 UK
IMF boss's promise to Africa
Street trader in Maputo
Economic liberalisation has been a mixed blessing
The managing director of the International Monetary Fund, Horst Koehler, has said that the Fund will not impose loan conditions on African nations that are not in their interest.

But the IMF chief said that the Fund had to be serious about safeguarding its money.

IMF and World Bank policies of encouraging privatisation have been blamed for the collapse of the cashew nut industry in Mozambique.


Horst Koehler
Horst Koehler: Fund must safeguard its money
"The IMF will not insist on building ... conditionalities which are not in the countries' interest and will not help the countries solve their problems," Mr Koehler said.

Mr Koehler, who is on his first visit to Africa since his appointment in May, was speaking at the end of a one-day visit to Mozambique. He has since gone on to South Africa.

'Best advice'

While in Maputo, he declared that the Fund did not want to lecture governments, but rather aimed to give the best advice available.

Correspondents say this appeared to be seen as a softening of the IMF's position.


Sugar cane
Mozambique's sugar industry faces an uncertain future
IMF officials had said Mr Koehler's visit was aimed at reassessing the Fund's role in Africa, where its record has been heavily criticised.

Countries undergoing economic reforms backed by the IMF and the World Bank have accused the IMF of dictating conditions in return for aid.

Jobs lost

Most Mozambican cashew nut processing plants have closed, with the loss of nearly 10,000 jobs, as a result of prescribed liberalisation policies which have encouraged local producers to send their nuts to India for processing.

The IMF and the World Bank have also forced Mozambique to scrap a surtax on imported sugar, a move which correspondents say is seen in Mozambique as threatening the recovering local sugar industry.

Mr Koehler said that President Joaquim Chissano had raised the sugar tax issue with him, and that he had urged the government to await the results of a study being carried out by the UN Food and Agricultural Organisation (FAO) to find the best solution.

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