Mozambique’s Finance Minister calls for urgent measures to prevent growth of internal debt

7 March 2012

Mozambique’s Finance Minister, Manuel Chang said during the 19th National Public Spending Seminar, held in Matola, Maputo province that it was urgent to take corrective measures to prevent growth of Mozambique’s internal debt reaching unsustainable levels such as those seen in the Euro Zone.

Chang pointed to one of the reasons for growth of internal debt as being loans taken out from local banks by a number of State sectors, notably the business sector.

In most cases the debts are taken on without permission from the Finance Ministry. Other cases include taking on debt with permission from the Finance Ministry, but the sector responsible for its payment then does not honour its commitments.

The minister said that he had directed the National Directorate for the Treasury to, “issue pertinent instructions for all the sectors and to take effective control of debt.”

Chang also talked about what he called “noxious debt” affecting correct management of public finances resulting from acquisitions and hiring contractors and public works without the necessary budgetary funding. (macauhub)