“At the moment, it is not appropriate to lend to Mozambique”

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“At the moment, it is not appropriate to lend to Mozambique”

12:40 CAT | 20 Jul 2017

O País / JICA representative says suspension of funding aims to prevent the situation from recurring in the country.

Japanese Agency for International Cooperation (JICA) representative Yamashita Chigiru says that the interruption of financing for projects in Mozambique is not only aimed at pushing for clarification of the hidden debts, but also at preventing the situation from recurring in the country.

Speaking to O País at JICA Headquarters in Tokyo, the head of the Department for Africa explained that the Japanese government was open to training Mozambican public officials in public finance management so that they were able to avoid the same mistakes when contracting loans in the coming years.

“What we did was to suspend loans for future projects, according to guidance from the (Japanese) government. But in our view, we cannot just suspend loans: we have to create conditions so that the (debt) problem does not repeat itself. It does not make sense for Mozambique to make the same mistake again, given the impact on its population,” Chigiru commented.

Chiguro made it clear that the JICA was following instructions from the Japanese government and that the agency continued to analyse projects waiting for endorsement. “We are committed to doing everything possible to help the development of Mozambique. But at the moment, it is not appropriate to lend to Mozambique, although we continue to channel development aid funds and support provided by technical cooperation,” Chigiru said. “The JICA continues to assess projects and as soon as the Japanese government approves, we will resume financing, but before then, we cannot do anything,” he added.

The JICA is at pains to point out however that, in addition to development aid, financing for the Nacala and Maputo corridor rehabilitation projects and three technical assistance projects in agriculture, industrial development and economic infrastructure in the centre and north of the country is not affected by the Japanese government’s decision.

As regards lending, Chigiru said he hoped the Japanese government would resume as soon as there was a concrete outcome from the international audit of the Ematum, MAM and ProIndicus accounts. Japan is the only Asian country which joined the G14 group of countries and multilateral institutions and the US in suspending lending to Mozambique.

Chigiru said that the Japanese government has been exchanging information with the International Monetary Fund, the World Bank and other multilateral financial institutions.

Figures show that Japan was among the top five funders of Mozambique in 2014, alongside the US, the UK, France and Sweden. From 1981 to 2015, Japan financed Mozambique to the tune of US$ 900 million in development aid and technical support alone, not to mention loans to projects representing most of Japanese financing.

At present, 94 Mozambicans are studying at Japanese universities, as part of an initiative launched by the Japanese prime minister, Shinzo Abe, which aims to build entrepreneurial skills in young people and train African civil servants to serve the development goals of their countries. Between 1981 and 2016, 1,845 Mozambicans participated in similar projects co-financed by the JICA.