IMF World Economic Outlook: Mozambique's growth revised down to 3% this year
DW (File photo) / Ematum boats docked in Maputo
The Mozambican government is meeting creditors in London today to try to find restructuring solutions for the country’s debt, the finance ministry said in a statement.
“Mozambique will present recent fiscal and macroeconomic developments and proposals to restructure commercial and guaranteed debt,” the document reads.
The government says it remains committed to “finding consensual solutions to a collaborative resolution of the current debt situation through dialogue”.
Civil society organisations have accused the government of lack of transparency and demanded that the executive provide information “before the public in a plenary session report to parliament” before the London meeting, but this did not happen.
In question is a problem in Mozambique’s public accounts arising from 2013-2014, when, according to an international audit, three public companies acting as ‘fronts’ contracted debts of about US$ 2 billion (about one-eighth of the country’s GDP at the time) on the basis of state guarantees signed extra-judicially and without informing authorities and partners, in what became known as the hidden debt scandal.
The investors with whom the government is negotiating hold US$727.5 million of debt securities, and have already seen a cut in income due to the government’s default in payments.
Holders of these securities (which resulted from the exchange of Ematum bonds) refuse to be treated identically to banks and investors who lent the remaining US$ 1.4 billion to public companies Mozambique Asset Management (MAM) and Proindicus.
Credit Suisse and Russia’s VTB, the banks which lent the money, are reportedly being investigated by the US Federal Bureau of Investigation (FBI) and the United States Department of Justice, as well as by United Kingdom and Swiss financial regulators.Source: Lusa