Mozambique’s foreign debt totals US$3.3 billion in 2006

3 May 2007

Maputo, Mozambique, 3 May – Mozambique’s foreign debt totaled US$3.3 billion at the end of 2006, the Mozambican finance minister, Manuel Chang said Wednesday in parliament.

Replying to a question from a member of parliament of the Renamo opposition party, the minister said that at the end of 1998 Mozambique’s foreign debt had stood at US$6 billion.

After that two stages of the Initiative for Highly Indebted Poor Countries (HIPC) followed which reduced Mozambique’s foreign debt to US$4.6 billion at the end of 2005.

The minister noted that, following the HIPC initiative, the annual servicing of Mozambique’s foreign debt fell from US$100 million to US$57 million.

Chang told the members of parliament that they should not think that the HIPC initiative had cancelled all of Mozambique’s foreign debt as, for example, HIPC-1 had had a deadline of February 1984 and that any additional debt taken on after that date was not covered.

In 2005 due to pressures from the G-8 group of the world’s most industrialized nations the International Monetary Fund (IMF), the World Bank and the African Development Bank (ADB) agreed to drop the debts of the poorest countries.

Under the terms of the Multilateral Debt Reduction Initiative (MDRI), the IMF totally pardoned Mozambique’s debts up to December 31, 2005, which was US$154 million and, the ADB dropped US$500 million.

The World Bank adopted a different procedure on using December 31, 2003 as the deadline and just US$255 million of debt was pardoned.

As for internal debt, the Finance minister said that it totaled US$5.2 million meticals or US$201 million at the end of 2006. (macauhub)