Mozambique: More than 29,700 jobs created in Cabo Delgado last year
The interest rates required by investors to negotiate Mozambique’s public debt, consistently above 8 percent since June 2015, averaged 20.4 percent in March this year, according to figures from the International Monetary Fund (IMF).
According to the IMF report “Regional Economic Prospects for Sub-Saharan Africa”, released yesterday, Mozambique faces the highest interest rate on foreign currency debt in the whole of Africa, with 20.4 percent compared, with 8.7 percent in Angola, the second-highest interest rate.
“The debt trajectory is clearly upward, at more than 50 percent of GDP in many countries” such as Cape Verde and Mozambique, analysts write in the report, which says public debt in Mozambique was 115.2 percent of GDP at the end of last year, but is expected to fall to 106.9 percent and 103.6 percent this and next year.
Mozambique’s debt-to-GDP ratio is surpassed only by Cape Verde, at 134.7 percent this year and a projected 133 percent in 2018, more than three times the sub-Saharan Africa average of 44.6 percent.
Mozambique faces 19 percent inflation this year on an expected growth rate of 4.5 percent, projected to fall to 10 percent and 5.5 percent respectively next year. After the public accounts imbalance narrowed from 10.4 to 7.4 percent last year, the budget deficit is expected to increase to 8.2 percent this year and to 8.5 percent in 2018, according to IMF forecasts.
The IMF report on sub-Saharan Africa comes in the week in which Kroll is to present to the Mozambican authorities a report on the so-called ‘hidden debt’ of US$1.4 billion contracted between 2013 and 2014 by public enterprises with government guarantee without being recorded in the official accounts or revealed to international creditors.
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