Zimbabwe: US$1,5bn steel and iron plant ready to roar, will export via Mozambique
The UK’s High Commissioner in Maputo has suggested an international judicial audit to verify Mozambique’s undisclosed loans as a remedy for the UK government’s shaken trust in the country.
“An international forensic audit would be a means for rapid clarification of the case, which is serious,” Joanna Kuenssberg told the press.
Admitting that the debts contracted between 2013 and 2014 without parliamentary approval and kept off the public accounts had tarnished the confidence that the United Kingdom had in the country, Joanna Kuenssberg said this lack of transparency justified the suspension of support to the state budget, adding that the Mozambican government needed to quickly regain the confidence of its international partners.
“The situation is very serious and is undermining the country’s economy,” Kuenssberg said. British ministers were “very sensitive” to the latest news about Mozambique’s debt, she said, and the UK was waiting for proposals from the Mozambican government to restore budget support, a decision which however would only be taken after discussion with other donor countries.
Kuenssberg added that, in addition to a full clarification, the Mozambican government needed to examine the consequences of the situation and if possible, track “what remains of the money” to reduce the debt burden.
“Urgent action is needed,” she said, reiterating that an international judicial audit would be a step towards restoring confidence between Mozambique and international partners.
The Mozambican government yesterday sought to explain in parliament the outlines of debts worth more than one billion dollars contracted by the previous executive.
Mozambican Prime Minister Carlos Agostinho do Rosario yesterday acknowledged the existence of debts of US$1.4 billion (EUR 1.25 billion), which he justified on the grounds of national security, but which led the International Monetary Fund (IMF) to suspend the second installment of a loan to Mozambique and the deployment of a mission to Maputo.
The G14 group of state budget donors, of which the UK is a member, also suspended its payments, followed by the US, which announced that it would review its bilateral support to the country.
Including the recently disclosed loans, Mozambique’s public debt now stands at US$11.66 billion (EUR10.1 billion), of which US$9,890 million (EUR8.6 billion) is external. This represents over 70 percent of gross domestic product, up from 42 percent in 2012 figures.
According to official data, the UK is the second largest contributor of development assistance since 2005, with more than EUR700 million channelled into health, education, agriculture, energy and infrastructure development projects in 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.