Mozambican government expected to take on debt of US$900 million by 2013

4 January 2011

Maputo, Mozambique, 4 Jan – The Mozambican government by 2013 is expected to take on loans of US$900 million, an amount that has been given tacit approval by the International Monetary Fund (IMF), Mozambican daily newspaper, Notícias reported.

The newspaper reported that the government had said this was the maximum possible to maintain macroeconomic stability and service foreign debt, with US$300 million, requested from Brazil, earmarked for construction of Nacala airport (US$80 million) and modernisation of the port of Beira (US$220 million).

This year the government is hoping to ask for loans totalling US$600 million, which is what remains of the amount established in IMF’s policy support instrument (PSI), in order to make the government’s negotiations with potential creditors easier.

“Amongst the projects being studied by the government, the following are currently classified as priorities – an increase in power generation at the Cahora Bassa dam and construction of a transmission line between the dam and Maputo, which would reduce dependence on re-importing electricity,” the government said in its Statement of Intentions sent to the IMF board of directors.

The government also considers expansion of the road network to be a priority as currently only one third of Mozambique’s roads is paved. Projects to which priority is given may include corridors linking the main economic centres to borders with neighbouring countries, such as the 287-kilometre road between the port city of Beira and Machipanda, on the border with Zimbabwe, or the 131 kilometres section of road between the capital, Maputo and Ponta do Ouro on the border with South Africa. (macauhub)