Take a look at the new roads in Niassa - Mozambique
Rating agency Moody’s said on Thursday that Mozambique’s government may try to impose greater losses on its sovereign debt creditors to improve its public accounts and thus be able to negotiate financial support from the International Monetary Fund (IMF).
Moody’s opinion comes at a time when the sovereign debt creditors are waiting for a reply from the government to their last proposal which they presented in early August under which the government would only pay $200 million until 2023 and after that, the rest would be paid depending on gas revenues.
Mozambique’s debt profile, Moody’s said, was Caa3 with a negative outlook, meaning it was in default and that “reflects the expectation that the default event the government is currently facing will result in substantial losses for private creditors which may exceed the base scenario”.
The public sector debt is over 100% of Gross Domestic Product (GDP) and the government’s access to foreign funding in hard currency “is extremely limited” Moody’s wrote.
Moody’s acknowledged that Mozambique should receive huge amounts of tax revenues from gas investments starting in 2023, “which will support the public finances and the balance of payments”, but noted that “the Empresa Nacional de Hidrocarbonetos –ENH (National Hydrocarbon Company) to fund the stake in the gas projects will probably increase the already high levels of public debt”.
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