Zimbabwe, Mozambique agree to refurbish and extend railway line
DW (File photo)
The United States is to review its annual US$400 million financing of Mozambique after the discovery of hidden debt in Mozambique’s public accounts, a statement from the US embassy in Maputo cited by Lusa news agency says.
“In light of the current situation and our responsibility to the American taxpayers who provide these funds, we will also review our assistance, in particular any assistance to the central government,” said the US embassy, following the position already taken by the G14 donor group.
The United States are not part of the so-called G14, but are Mozambique’s largest bilateral donor. “We echo the concerns of Mozambicans that require answers,” the statement said.
The statement notes that some of its assistance to Mozambique is channelled through specific programs in the areas of HIV/Aids, tuberculosis, malaria, governance, agriculture and education, and it does not intend to reduce this support.
US waiting for further explanations
As the largest bilateral donor, development partner and potentially largest investor, the financial stability of Mozambique is important to the United States,” the statement reads, and the United States “is in constant consultation with other donors, and is aware of and endorses the recent decision of the G14” to suspend disbursements to the Mozambican budget.
According to the statement, the US has spent over US$6 billion (EUR 5.2 billion) since 1984 in its development programs and combating high-impact diseases such as Aids in Mozambique.
The US embassy believes that the clarifications already provided by the government “are the first important steps towards restoring confidence,” but government “must now act quickly to account in full and transparent public for these loans and how the funds were used, as well as outlining a plan to mitigate its impact on Mozambique’s economy”.
“Transparency, accountability and fiscal responsibility are necessary to achieve these goals,” the statement reads, adding that despite the suspension of payments, it does not intend to reduce support for the Mozambican people.
The revelation of government-guaranteed loans contracted between 2013 and 2014 led the International Monetary Fund to suspend the second tranche of a pre-agreed loan to Mozambique, with the G14, World Bank and the UK also suspending disbursements.
The Government of Mozambique acknowledged at the end of April the existence of a debt being kept off the public accounts of US$1.4 billion (EUR 1.25 billion), which it justified on the grounds of security reasons for strategic infrastructure of the country.
Leave a Reply
Be the First to Comment!
You must be logged in to post a comment.
You must be logged in to post a comment.