Breaking: Mozambique suspends spending until after budget review in July

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Breaking: Mozambique suspends spending until after budget review in July

4:20 CAT | 30 Jun 2016

In File Club of Mozambique

Mozambique’s government has frozen spending aside from salaries and pensions until it has carried out a budget review on July 10 when it will announce austerity measures, the Finance Ministry said.

“Budgetary changes and the financial program will be temporarily suspended until the proposed revisions are approved,” Finance Ministry Permanent Secretary Domingos Lambo said in a letter seen by Bloomberg. Finance Ministry spokesman, Rogerio Nkomo, didn’t answer three calls to his mobile phone.

Mozambique is struggling to pay its debt after a commodity slump reduced its export revenue and the depreciation of the metical boosted the payment costs in dollars. The government in April owned up to the existence of $1.4 billion of previously undisclosed borrowing, including loans taken out by state-owned companies.

The Mozambican metical fell 3.3 percent to 65.65 per dollar by 3:20 p.m. in Maputo, the capital. It has declined 27 percent against the dollar this year, second only to the Nigerian naira in Africa.

Source: Bloomberg