Mozambican public debt up 6% in Q1

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Mozambican public debt up 6% in Q1

3:36 CAT | 03 Jul 2020

File photo: O País

The total stock of Mozambican public debt in the first quarter of 2020 was US$12.5 billion (about 806.8 billion meticais), an increase of 6% over the same period of the previous year.

Increasingly indebted. In the first three months of this year, the stock of Mozambican public debt was US$12.5 billion, just over 806.8 billion meticais, slightly above the stock recorded in the first quarter of 2019 (US$12.2 billion). That is, an increase of 6%.

The external component had the greatest weight in the level of state debt, absorbing 79% (about US$9.8 billion) of the total stock, representing an increase of 4% compared to the first three months of 2019, the debt bulletin published this week by the Ministry of Economy and Finance (MEF) indicates.

Of total external public debt, 44% (US$4,386.71 million at current exchange rates) refers to multilateral creditors and US$5,484.96 million (56%) to bilateral ones.

The World Bank’s International Development Association (IDA) stood out among multilateral creditors with 29%, followed by the African Development Fund (AfDB) with 9%, with the rest with percentage values below 2%.

Regarding bilateral creditors, China, MOZAM 2032 and Portugal were the ones bearing the greatest weight, with 21%, 8% and 6% respectively, the MEF reveals.

Domestic bonds, on the other hand, stood at US$2.6 billion between January and March of 2020, against about US$2.3 billion in the same period last year.

The MEF says this level of public debt is due, in large part, to the increase in domestic indebtedness, with the emphasis on treasury bills (60%) issued to finance current cash flow.

New project agreements

Still in the first quarter of 2020, two concessional credit agreements were signed with the International Fund for Agricultural Development (IFAD), for the financing of small scale aquaculture promotion projects and for the agro-food chain development project, in the overall amount of US$17 million.

Compared to the same period of 2019, an equal number of credit agreements (two) were signed: one with the OPEC Fund for International Development (OFID), for the construction of the Angoche Fishing Port, in the amount of US$12 million, and one with the Exim Bank of India, for water supply projects in Manica, Sofala, Zambézia and Nampula provinces, in the amount of US$38 million.

Debt payments

The service of external public debt – what the Mozambican state paid to creditors – was US$118.59 million in the first quarter, down 36% (about US$31.49 million) compared to 2019.

The Ministry of Economy and Finance says that more than US$84 million was paid in the amortisation of internal burdens.

By Edson Arante

Source: O País