The main challenge facing Mozambique in 2017 is to ensure peace and the free movement of people and goods throughout the national territory, says the Governor of the Bank of Mozambique, Rogerio Zandamel.

Addressing a year-end reception with members of the financial community here Tuesday, the head of the central bank stressed that peace would allow economic activity to take place normally, and allow due use of the country’s potential in agriculture, tourism, energy, fisheries and transport.

In order to reduce fiscal risks, it is also necessary to ensure the sustainability of the growth in public expenditure and to increase the government’s domestic revenue, since foreign aid disbursements are unpredictable, he said.

He pledged that the central bank would continue to work in close partnership with government institutions for a rapid resumption of the programme with the International Monetary Fund and World Bank. This is a priority to strengthen the confidence of investors and international markets, and to allow the resumption of capital flows to the country, he stressed.

The IMF, World Bank and other western aid partners have cut off financial assistance to Mozambique in the wake of the discovery of well over a billion US dollars of government-guaranteed debt which had not previously been disclosed.

Zandamela said 2016 had been a difficult year, marked by severe climate shocks and military instability caused by attacks by gunmen of the rebel movement Renamo in the central part of the country.

The suspension of the IMF’s programme with Mozambique and of direct support by donors to the State Budget because of the scandal of the undisclosed debt had deeply affected the credibility and confidence which the country used to enjoy internationally, and shook citizens’ trust in national institutions, he added.