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File photo / Finance Minister of Mozambique, Adriano Maleiane
Mozambique’s Minister of Economy and Finance, Adriano Maleiane, has said the country’s foreign public debt, until December 31, 2017, was $10.6 billion.
Maleiane said it is to date the highest debt to GDP ratio in Africa.
Speaking in parliament on Thursday, Maleiane said this amount includes bilateral debt, which is 4.6 billion, corresponding to 43 percent of total debt; alongside the multilateral debt contracted with institutions such as the World Bank and the African Development Bank (ADB) which is pegged at $4.2 billion, representing 39 percent.
The minister said the remaining part is commercial debt amounting to $1.8 billion, which the Mozambique admitted as previously undisclosed loans, much of which was spent on building a state tuna-fishing company and enhancing maritime security, a discovery prompted the International Monetary Fund (IMF) and foreign donors to cut off support, triggering a currency collapse and leading to a default.
“We are now only paying multilateral and bilateral debt. The commercial is not being paid, since, since 2016, we are in the process of negotiations. If this process goes well we can have a better classification of our debt in the international market and, therefore, we have the possibility of access to markets” he remarked.
As for the stock of domestic debt, the minister said that it was, until 31 December 2017 $1.68 billion.
Maleiane said part of this amount result from the fiscal consolidation policy, a debt that was not registered.
“It has now been titled and integrated into the state’s accounts for greater trust and transparency” he added.
He said it results from VAT rebates not reimbursed to various entities, money from petrol stations following fuel subsidies, among other situations.
“If we withdraw the debt resulting from fiscal consolidation, the state has contracted to actually finance the government’s Five Year Program (PQG)”, Maleiane said.
Meanwhile, in a separate but related issue, Standard & Poor’s (S&P) says that Mozambique has the highest foreign currency debt ratio in sub-Saharan African and will not return to the markets before an agreement with the IMF is reached.
“At 84 percent, Mozambique has the highest percentage of foreign currency debt compared to total debt, partly due to the issuance of its ‘Eurobond’,” the rating agency analysts said.Source: APA
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