Mozambique: No “‘indications” that China may seize assets due to debt – government

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Mozambique: No “‘indications” that China may seize assets due to debt – government

2:22 CAT | 19 Nov 2020

File photo: Domingo

Mozambique’s economy and finance minister on Thursday said that there was no evidence that China could take over some of the country’s public infrastructure as compensation for a possible failure to pay the bilateral debt.

“There are no indications, we have no information that the Chinese government can seize any assets in Mozambique due to defaults in debt payment,” said Adriano Maleiane in the question and answer session between the government and members of the Mozambican parliament.

The management of Mozambique’s debt to China has been done smoothly and with respect for the parameters agreed between the two states.

Adriano Maleiane noted that the $2 billion (€1.7 billion) or so that Mozambique owes China had been earmarked for construction of infrastructure, including roads and bridges, with the potential to generate a return, through payment for services provided to users.

The conditions are in place for the company to co-participate in the repayment of the debt, he said.

The question of possible ownership of Mozambican public infrastructure by China in the event of non-payment of the debt was raised by the opposition party, Movimento Democrático de Moçambique (MDM).

The MDM pointed to alleged cases in which Beijing opted for the seizure of infrastructure by debtor states in Africa and Asia to ensure the settlement of debts.

Mozambican civil society organisations had also warned of the risk that China would be left with Mozambican public infrastructure if it considered that the African state was unable to settle the charges.

On Wednesday, the minister for the economy and finance said in parliament that Mozambique’s public debt totalled $12.37 billion (€10.42 billion).

A 16% part of that amount (around $2 billion) is owed to China, he added.

An amount of $1.97 billion (€1.66 billion) is due to the Chinese Exim Bank and was mainly used to build roads and bridges, including the Maputo ring road, the suspension bridge over Maputo Bay and roads to the south.

The minister for economic affairs and finance said that he saw no difficulties in repayment, referring to the tolls that are paid, noting that in the long term the roads will pay themselves, but without detailing the accounts and existing traffic.

Source: Lusa