Mozambique: AT in Chókwè fines 196 vehicle owners for foreign registration plates - report
Lusa (File photo)
The executive secretary of the Economic Commission of the United Nations for Africa, Carlos Lopes, said on Tuesday in Maputo that Mozambique would have to address the problem of debt in a “faster and more spectacular” way to beat the current adverse economic environment.
“Mozambique will have to solve the problem of debt in a faster and more spectacular way, and this will not be possible without restructuring a portion of the debt,” Lopes told reporters at the end of a meeting with Mozambican Prime Minister Carlos Agostinho do Rosario.
The solution to the debt problem, Guinean Lopes continued, would necessitate direct negotiations involving government, the state enterprises that have benefited from substantial undeclared loans and creditors.
“This is one of the short-term remedies. It is clear that the metical will suffer. In fact it is already suffering, not least because of volatility affecting the currencies of developing countries,” Lopes said.
Stressing that Mozambique had a promising future and good performance in terms of economic growth, Lopes urged domestic resource mobilisation as an engine of development for the country and the continent as a whole.
“A number of measures that will allow the restoration of the indicators necessary for recovery are in order. I think that Mozambique can do it,” he said.
Lopes says Africa needs to invest in better management of debt, central banks reserves, immigrant remittances and people’s saving as resources for growth.
The International Monetary Fund (IMF) and donors to this year’s state budget suspended their support after the revelation of the existence of US$1.4 billion (EUR1.2 billion euros) in loans guaranteed by the Government to state companies which were not declared in the public accounts.
With the revelation of the new loans, public debt of Mozambique is now set at US$11.66 billion (EUR10.4 billion ), of which US$9890 million (EUR8.9 billion) are foreign debt.
This represents over 70 percent of Gross Domestic Product (GDP) and reflects a debt climbing since 2012, when it was fixed at 42 percent.
At the end of the visit of an IMF mission to Maputo, on Friday, the institution said that Mozambique faces difficult economic challenges and that it is expected that economic growth in 2016 reduces to 4.5 percent, against 6.6 percent in 2015, almost 3.3 percentage points below historical levels, with a substantial risk of lowering in this projection.
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