Mozambique: Government assesses legality of domestic debt

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Mozambique: Government assesses legality of domestic debt

2:15 CAT | 26 Jul 2018

Domestic public debt grew by 21.9 percent from 2016 to 2017, reaching a cumulative total of more than 106.8 billion meticais. But some of it may not be legal.

The Mozambican government is carrying out a process to establish the legality of the state’s domestic debt to suppliers of goods and services, a reliable source at the National Treasury Directorate (DNT) has told O País.

The government department attached to the Ministry of Economy and Finance (MEF), believes that this exercise may leave the total balance of domestic debt much smaller, and have a significant impact on domestic public debt in the coming years.

This will be the second time that Filipe Nyusi’s government has carried out a survey of domestic public debt. In 2017, suppliers of various goods and services to the state were checked for the years prior to 2016, but the result of that exercise is still under wraps.

The growth of domestic debt, mainly in 2017, is justified by the transition from the balance of Treasury Bills from 2016 to 2017, amounting to 21.6 billion meticais, as well as the issuance of Treasury Bonds in the amount of 11.4 billion meticais for financing the budget deficit and also an amount of 7.4 billion meticais corresponding to the regularisation of the debt of public entities through securitisation.

Accumulated public debt at the end of the 2017 fiscal year, excluding guarantees, amounted to 661,369.8 million meticais, corresponding to approximately 81.8 percent of the gross domestic product, of which 554,470.2 million meticais correspond to foreign debt and 106,899.6 million meticais domestic debt.

Source: O País