Mozambique: Police commander promises to pay back wages - AIM
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The Minister of Economy and Finance has been explaining to @Verdade why Mozambique not been able to take advantage of the opportunities of Chinese financing.
“(…) We were very badly publicised in China,” Adriano Maleiane says. “Public-private partnerships do not seem very attractive to Chinese investors.”
@Verdade says the widespread perception that Mozambique has received millions in funding from China does not correspond to reality. Of the US$60 billion in investments, lines of credit and donations that the giant Asian country made available under the China-Africa Cooperation Forum (FOCAC), our country got the equivalent of about US$335 million between 2015 and 2018, well below the US$963 million secured by the government of Armando Guebuza between 2013 and 2015.
Asked about this by@Verdade, Minister Maleiane began by explaining that: “The programme they sold to us was to increase what they call productive capacity, to support Mozambique’s capacity in all sectors. And what the government has always wanted is for Chinese entrepreneurs to comr to Mozambique as investors and not simply as the implementers of loans that we contract.”
“We continue to think that this is the correct procedure. What happened is that the Chinese entrepreneurs did not know this, and here we always had the idea that we had to give a list of projects that the government thinks are priorities. And we did that, in order for the Chinese side to interest Chinese entrepreneurs who would then ask for funding there, and the [Mozambican] government would have nothing to do with it,” he said.
However, from the Chinese point of view, something was missing. “Even the idea of public-private partnerships seems not to have been very attractive to Chinese investors.”
Responding to @Verdade’s question during a recent press conference, the Minister of Economy and Finance revealed that at the moment the government is improving the structuring of it approach on how it takes advantage of the opportunities of FOCAC, and another US$60 trillion investment cash for Africa by 2021.
“Mozambique would prefer at this stage to receive more investors than more credit”
Maleiane further explained that there was a possibility of Chinese investors entering into the financing of the Mphanda Nkuwa Dam and even the electricity transmission line from Tete to Maputo, known as the north-south backbone.
“Instead of the [Mozambican] state asking for financing so that Chinese companies can do it, they can ask for funding directly and will be treated as normal investors, with the incentives we usually give,” the minister explains.
Minister Maleiane also said that in the current unsustainable external public debt situation, Mozambique “is saying, and not only to China but to all (partners), that Mozambique prefers at this stage to have more investors than more credit”.
“Because the credit we are allowed to have for sustainability has to be highly concessional, and the credit from China and the others is not so much,” Minister Maleiane says, indicating that the best concessional credit that Mozambique has obtained is from the Japanese Development Agency. “With the JICA, the interest is 0.01% to pay in 40 years, with practically 30 [years] for free.”
For the three-year period 2018-2021, China has made to available African countries US$60 billion in non-refundable assistance and interest-free loans, US$15 billion in preferential loans, a credit line worth US$20 billion, a special US$10 billion China-Africa financial development fund, a special financing and trade fund for African imports worth US$5 billion and a further US$10 billion for Chinese companies investing in Africa.
As of December 31 2017, Mozambique owed China 118.2 billion meticais (about US$1.9 billion), the country’s largest external single-country public debt figure.
By Adérito Caldeira
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