World Bank and IMF authorise Mozambican government to take out commercial loans

17 June 2010

Maputo, Mozambique, 17 June – The World Bank and the International Monetary Fund (IMF) support the decision of the Mozambican government to take out loans at market interest rates, the Mozambican Minister for Planning and Development said Wednesday.

Making use of non-subsidised loans, that is at market interest rates is one of the options chosen by the Mozambican government to fund what it calls the next “generation of infrastructure investments,” specifically roads and bridges.

“Domestic revenues, donation and subsidised loans are insufficient for the government to carry out its infrastructure programme and thus the solution is to take out commercial loans,” he said adding that the World Bank and the IMF had agreed with this measure.

This funding, according to Aiuba Cuereneia, will be taken on from bilateral creditors including some countries as well as the World Bank and the IMF themselves.

Without giving an exact amount for the commercial loans to be taken on by the government, the minister for Planning and Development noted that this formula would be activated in a sustainable way in order to ensure Mozambique is able to control its debts.

As part of the Initiative for Debt Pardon of Highly Indebted Poor Countries (HIPC), which allowed Mozambique to climb out of its status as an HIPC, the government is required to report its domestic and foreign debt operations to international financial institutions. (macauhub)