Mozambique: Internal public debt spiral slows down for the first time since 2016
File photo: Saint Louis Studio / Steven Le Vourc'h
Any agreement that Mozambique establishes with the creditors of its ‘hidden debts’ will be evaluated by the country’s attorney general (PGR) and administrative tribunal (TA), Minister of Economy and Finance Adriano Maleiane announced yesterday.
“This process of taking the agreed proposal to the PGR and the TA serves to give the creditors stronger guarantees. Then there will not be problem of some people recognising the debt and others not,” he told journalists in Maputo.
Maleiane said the procedure was the correct way for Mozambique to act “as a responsible state”.
Adriano Maleiane said two weeks ago that agreement with creditors could be reached by the end of the year, but rating agency Fitch is less optimistic in its latest analysis of Mozambique’s sovereign debt, which maintains the country’s ‘default’ level.
“Fitch does not anticipate any short-term settlement of the default,” it wrote, as “there is significant disagreement between debt holders and the government over the terms of debt restructuring, including the treatment of different classes of creditors , i.e. between holders of sovereign debt and those who have lent to state-backed companies”.
The matter concerns two billion dollars of debt contracted by state-owned companies between 2013 and 2014. The bonds correspond to a portion of US$727.5 million, and Mozambique has already failed to make four payments.
Maleiane does not expect changes until there is an agreement.
“Mozambique will remain at the RD [default] level until negotiations are concluded. If it proves that creditors and the government are satisfied, I think the rating agencies will review their position,” he said.
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