Mozambique: Government has not lost control of debt – minister

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Mozambique: Government has not lost control of debt – minister

7:51 CAT | 26 Mar 2021

Photo: TVM

Mozambique’s economy and finance minister, Adriano Maleiane, said on Thursday that the country’s public debt is not out of control and that everything was being done for the “sustainability” of loans taken out by the state.

“We got the feeling that 2016 was the disaster, but no. We have not lost control,” Adriano Maleiane emphasised.

Maleiane was speaking in parliament during the debate on the 2019 General State Account.

The reference that he made to 2016 is related to the fact that in that year debt guarantees provided by the government then headed by Armando Guebuza were disclosed amounting to $2.2 billion (€1.8 million) and that led to criminal proceedings inside and outside the country.

This Thursday in parliament, Maleiane stressed that the government had not lost control of public debt, guaranteeing that the burden was within or close to the internationally required parameters.

“We are walking very well within the [debt sustainability assessment] indicators,” Maleiane stressed.

He pointed out that the ratio between debt service and Mozambique’s exports is 11.8% compared to the international parameter, which is 10%. The ratio between debt service and state revenues was at 13.9% compared to the 14% international standard.

“We are not going to take on debt that is not concessional,” said Maleiane, explaining the government’s efforts to ensure the sustainability of public debt.

The minister defended the issuing of treasury bills to finance investments in infrastructures, pointing out the requirement of the international partners that the state should contribute with its own resources for this type of expenditure.

“There is a huge responsibility in the management of public debt,” he stressed.

Maleiane did not tell parliament the exact amount of Mozambique’s public debt, but at the end of last year, he said that the State owed US$12.37 billion (€10.42 billion).

Watch the TVM report bellow.