World Bank drops over US$1.3 billion of Mozambique’s debt

6 July 2006

Maputo, Mozambique, 06 July – The World Bank said in Maputo it had pardoned US$1.306 billion in debt owed to it by Mozambique, under the terms of the Multilateral Debt Reduction Initiative (MDRI).

According to a press release issued by the Bank, the decision will take effect from July 1 and will increase the amount of Mozambique’s cancelled debt to the World Bank to US$2.361 billion, as part of the abovementioned initiative.

The inclusion of Mozambique in the group of countries to benefit from debt reduction by the World Bank is due to its, “satisfactory macroeconomic performance, progress made in implementing the Poverty Reduction Strategy and the existence of a mechanism for managing public spending with minimum standards of disclosure.”

Without the MRDI, Mozambique would have to pay around 25 million euros to service the debt in the 2007/2008 period, and around 76 million euros in the 2009/2011 period.

Along with Mozambique, the MRDI involves 19 African countries. (macauhub)