Mozambique: Nacala airport debt restructuring is well advanced – government

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Mozambique: Nacala airport debt restructuring is well advanced – government

3:21 CAT | 23 May 2022

File photo: Amanda Rossi/BBC News Brasil

The Ministry of Economy and Finance (MEF) states in its 2021 Public Debt Report that talks between the governments of Mozambique and Brazil on restructuring the Nacala Airport debt are at an advanced stage, with the process expected to conclude this year.

Until then, the Empresa Aeroportos de Moçambique (AdeM) will continue to stand out in the list of state companies with the highest volume of direct external debt arrears over the last two years, in this case amounting to US$136.3 million.

The volume of AdeM’s arrears stems from its failure to repay the Brazilian Development Bank (BNDES) for airport construction finance.

In the report, though without giving specific dates, the MEF asserts that a debt restructuring agreement formalising the assumption of the debt service by the government may be concluded this year.

Nacala Airport has been stagnant since its delivery in 2014. The economic crisis plaguing the country since 2015, mainly caused by the effect of the so-called ‘hidden debts’ contracted between 2013 and 2014, has contributed greatly to the infrastructure’s massive under-use.

To reverse the scenario, management company AdeM has in recent years been attempting to operationalise a 2018 government decree designed to make the infrastructure profitable and requiring, among other measures, the diversion of international flights from Nampula to the airport.

Nacala Airport was designed to receive an average of 500,000 passengers and handle 5,000 tons of cargo per year, but is being used to a far lesser extent.

The debt contracted with the National Bank for Economic and Social Development of Brazil (BNDES) which now stands at US$136.3 million for the construction of the airport has continued to go un-serviced for more than eight years, tarnishing public accounts.

The fact is that the airport does not produce enough profit to pay off the debt, and has so far been a “white elephant”.

ALSO READ: Nacala Airport: The “white elephant” of northern Mozambique

By Evaristo Chilingue

Source: Carta de Moçambique