Mozambique govt acts against the law by accepting to pay for private debts, says CTA

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Mozambique govt acts against the law by accepting to pay for private debts, says CTA

1:37 CAT | 04 May 2016

DW (File photo) / Rogéro Manuel, president of CTA

The Confederation of Business Associations (CTA) says that the government acted against normal everyday life principles by agreeing to pay commercial interest on debts incurred by private entities when the state budget still depends on donors for money.

Mozambican entrepreneurs further complain that the loans do not prioritize the productive sectors such as agriculture and industry.

The CTA press release says that the external public debt is now three times larger than the 2015 value of the country’s exports, and maintains that the injudicious management of state resources is leading to public debt instability, a situation that will worsen the currency crisis.

“The CTA is deeply concerned by the change of much of the debt structure into more than 3 billion US dollars of non concessionary debt, and notes that, in a country with much of its state budget still supplied by donors, it is ‘contra natura’ for the state to assume the payment of commercial interest for debts contracted by private entities in international market,” the CTA statement reads.

Source: O País