Mozambique negotiates further debt relief
By the AFREEQUE newsroom, based on Club of Mozambique
Mozambique wants to negotiate further debt relief after a Chinese agreement allowing some payments to be rescheduled. The Finance Ministry is also seeking $528 million in external financing and considering converting debt into investments, according to an official statement cited by Club of Mozambique.
Mozambique will seek further debt relief from its bilateral creditors after reaching an agreement with China to reschedule some payments. The Finance Ministry said on Wednesday that it was prioritising negotiated solutions to improve the repayment profile and reduce pressure on public finances, according to Reuters.
Maputo plans in particular to discuss with its creditors mechanisms allowing part of the debt to be converted into investments. Mozambique owed China about $1.28 billion at the end of June, nearly 15% of its total external debt, making it the country’s biggest bilateral creditor, according to official data cited by Reuters.
The ministry also estimates that an additional $528 million in external financing is needed to complete the programme that the country hopes to conclude with the International Monetary Fund. The World Bank and the IMF consider Mozambique’s debt unsustainable, amid the hidden-debt scandal revealed in 2016 and delays to gas projects expected to increase public revenues.
The new request comes after the restructuring of Chinese debt and the rescheduling of repayments to Beijing announced on 26 and 27 October. Mozambique’s international bonds gained 0.3 cents to 91.614 cents per dollar on Wednesday, according to Tradeweb data cited by Reuters.
