Brazilian federal government wants Mozambique to provide guarantees for Brazilian loans

23 November 2011

Maputo, Mozambique, 23 Nov – The tax revenues that the Mozambican government collects as a result of coal exports should be consigned to guarantee Brazilian investment in infrastructure in the country, Brazilian minister Fernando Pimentel said in Maputo Tuesday.

During a meeting in Maputo with Finance Minister Manuel Chang, the Brazilian minister for Development, Industry and foreign Trade proposed the creation of a “coal account,” according to Brazilian news agency Agência Brasil.

There is currently no mechanism in place to protect loans provided by Brazil to Mozambique and the Brazilian government proposes that the concession rights owed by mining company Vale to the Mozambican government for mining in Moatize be consigned to guarantee a loan of US$365 million.

In this way, as of next year, it would be possible to start work on the Moamba Major dam which will guarantee a water supply to Maputo, and would guarantee another loan of US$300 million from Brazil to fund work in Mozambique such as transforming the Nacala airbase into a civilian airport and expanding the urban transport network in Maputo.

During a seminar on business opportunities in Mozambique, the chairman of the Mozambican Confederation of Economic Associations (CTA), Rogério Manuel, told representatives of 55 Brazilian companies that the current business climate in Mozambique was favourable and noted that the volume of foreign direct investment (FDI) had grown over the last five years.

The Brazilian business mission left Maputo on Tuesday on its way to Angola as part of an African tour that also includes South Africa. (macauhub)