China, Japan, and South Korea grant moratorium on Mozambique’s foreign debt servicing – @verdade

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China, Japan, and South Korea grant moratorium on Mozambique’s foreign debt servicing – @verdade

8:22 CAT | 28 May 2021

Image:@Verdade

China, Japan, and South Korea granted Mozambique a moratorium on its 2020 foreign debt service payments, as part of the initiative adopted by richer countries to mitigate the financial impact Covid-19 pandemic.

Of the US$73 million he asked to be excused, by 15 countries, Filipe Nyusi has managed to postpone payment of US$22 million.

As one of the poorest countries in the world, Mozambique joined, in September last year, the Debt Service Suspension Initiative, a mechanism to mitigate the financial impact of Covid-19. Put together by the Group of 20 major world economies, the initiative seeks to postpone payment of US$73 million in external public debt with Belgium, Brazil, France, Japan, South Korea, Russia, Spain, Portugal, China, India, European Union, Saudi Arabia, Kuwait, Romania and Serbia during 2020.

The Annual Debt Report published last week by the Ministry of Economy and Finance (MEF) reveals that “The Government managed to close Bilateral Suspension Agreements with only three creditors (China, South Korea and Japan), releasing financial resources to the tune of US$22.3 million”.

Mozambique’s debt with China is US$1.9 billion, with South Korea, US$239.98 million, and with Japan, US$385.29 million.

On his return from his recent trip to Paris, President Filipe Nyusi reported that “Portugal is considering the suspension of debt [service payments]. This is good, to give us time, not to take on more debt, but to use what could be immediately due for other purposes. In this case, the main purposes will be Covid-19 and the fight against terrorism”.

Servicing Mozambique’s foreign debt to Portugal, the largest of its 15 creditors, cost US$50.3 million in 2020.

By Adérito Caldeira

Source: A Verdade