Mozambique: Donors meet in the coming days to assess debts disclosure

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Mozambique: Donors meet in the coming days to assess debts disclosure

8:44 CAT | 03 May 2016

In File Cub of Mozambique / A view of Maputo, capital of Mozambique

The group of international donors to the Mozambican state budget will meet in the coming days to assess the revelations of debts guaranteed by the state and out of public accounts, a source close to the presidency of the so-called G14 told Lusa on Thursday.

“The G14 will meet in the coming days to assess the latest developments, in particular the statements of Prime Minister and also the IMF’s decision to postpone the mission to Mozambique,” said a source of the international partners group, currently chaired by Portugal.

At this time, “there is no joint decision to suspend disbursements” to the Mozambican budget and any resolution in this direction, he said, must be seen in the light of the memorandum signed with the local government, which establishes conditions relating to good governance and transparency.

The Government confirmed last week debts guaranteed by the state between 2013 and 2014, of US$622 million in favour of Proindicus and US$535 million to Mozambique Asset Management (MAM) to protect the coast and gas reserves in northern Mozambique.

In addition to these loans, the Government has recognized the existence of a bilateral debt contracted between 2009 and 2014, US$221.1 million worth, “in the context of strengthening the capacity to ensure public order and security.”

In total, about US$1.4 billion were not included in the public accounts, leading the IMF to suspend a mission it had planned to Maputo and also the disbursement of the second tranche of a loan to Mozambique.

According to reports in the international press, the World Bank and the United Kingdom have announced the suspension of funding for the Mozambican government.

Meanwhile, the Mozambican Prime Minister was in Washington to provide clarification to the IMF and World Bank on the new debts, and his contacts have been followed by technical meetings aimed at a full clearance of the situation.

At a press conference held on Thursday, Carlos Agostinho do Rosario said that the government expects the companies involved take the commercial component of the loans and that the State should cover only the part understood as a public service, stressing that he is confident in the normalization of relations with the IMF and with the World Bank.

The public debt of Mozambique is now set at US$11.66 billion, of which US$9890 million are external debt.

This represents over 70% of Gross Domestic Product (GDP) and reflects a debt rising since 2012, when the percentage was fixed at 42%.

The case of the so-called hidden debts generated a wave of indignation in the parliamentary opposition and civil society, that demand public explanations from the executive and an investigation into possible criminal liability.

Source: Lusa