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Photo: O País
The Mozambican government has assumed responsibility for the issuance of Petromoc and LAM debts contracted in the last fiscal year and amounting to more than five billion meticais.
In 2018, the government was authorised to issue guarantees and assurances amounting to 30.8 billion meticais, having issued by the end of the financial year guarantees totalling 5.5 billion meticais, corresponding to 18.1% of the limit set. The guarantees were in favour of two public companies, Petromoc and Linhas Aéreas de Moçambique (LAM), according to last year’s budget execution report, consulted by “O País”.
For Petromoc, two guarantee totalling 4.2 billion meticais were issued for fuel imports. The creditors are Millennium Bim and Banco Comercial de Investimentos (BCI).
In the case of LAM, the guarantee amounted to approximately 1.3 billion meticais for the restructuring of the debts of the crisis-stricken national flag carrier.
The financial situation of LAM forced Mozambique’s state holding company, IGEPE, to restructure the airline. The new leadership of Mozambican Airlines, under the baton of João Carlos Pó Jorge, faces the great challenge of renegotiating its debts with suppliers of goods and services.
With its overdue bills and other delayed or unpaid contractual commitments, LAM is now, for example, obliged to pay for aircraft fuel on a day-to-day basis, and the restructuring of the state airline is taking place just when Mozambique’s airspace has been liberalised, ending LAM’s monopoly.
State guarantees’ bitter history
It was precisely with such state guarantees and assurances that Mozambique slid into international disrepute in the wake of so-called ‘hidden debts’ – state-guaranteed loans contracted by Ematum, MAM and Proindicus with external creditors worth more than two billion US dollars.
The scandal resulted in the freezing, since April 2016, of foreign direct support to the state budget.
By Edson AranteSource: O País
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