Mozambique: Steps being taken by government are sure way out of excessive debt – African Development Bank

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Mozambique: Steps being taken by government are sure way out of excessive debt – African Development Bank

1:45 CAT | 14 Apr 2022

File photo: Lusa

The vice president of the African Development Bank (ADB) for economic governance and knowledge management on Thursday expressed confidence in Mozambique’s ability to control public debt, recognising that pressure factors prevail on the country’s burden.

“The steps being taken by the [Mozambican] government are a sure way out of [excessive] debt,” said Kelvin Urama, speaking to journalists at the end of his visit to the country this week.

Urama pointed to the implementation of policies conducive to inclusive economic growth, reform of the public finance management system, mobilisation of revenues and stimulating domestic and foreign private investment, as well as other types of financial flows as conditions for debt sustainability.

Mozambique’s public debt position, he continued, is not unique because several countries face shocks and vulnerabilities that increase their exposure to over-indebtedness.

“The world has faced several setbacks in terms of risks and shocks, including Covid-19 and climate change,” which exacerbate the spiral of public debt, he stressed.

In this sense, Urama continued, controlling debt “takes time and does not happen overnight”.

According to IMF data, Mozambique’s public debt to GDP ratio rose from 64.3 percent in 2014 to 120 percent in 2016 and has remained above 100 percent since then, and is expected to end this year at 127.6 percent, the third highest in sub-Saharan Africa, after Eritrea and Cabo Verde.

Source: Lusa