Metical: New Bank of Mozambique bank notes out today
Government reiterates that it is seriously addressing the issue of hidden debts
Economists say that Mozambique has entered into sovereign bankruptcy as a result of the government being unable to make repayment installments on the so-called hidden loans valued at US$1.4 billion in May this year.
Economist António Francisco says that in order to prevent the situation from deteriorating further, the Mozambican government must work to restore the stability in the country, but this seems unlikely in the near future.
“Practically speaking, Mozambique has already entered a situation of sovereign bankruptcy,” the economist says, since that the government failed to make a repayment last May, and has another installment due in January. This means that the country is “not managing to honour its commitments” with international lenders.
Economist Mário Sitoi says Mozambique should not even consider not honoring its commitments to creditors, because “this would be very harmful for the country”, while Mozambican finance minister Adriano Maleiane says that the government is treating the debt issue with the seriousness it reqdeserve and intends to resolve the matter as soon as possible.
Francisco nevertheless criticizes the government’s strategy of encouraging production, given the high cost of living.Source: Voa Portugues