Mozambique’s foreign debt totals US$6.9 billion in the 2nd half of 2014

19 June 2015

Mozambique’s foreign debt amounted to US$6.9 billion at the end of the second half of 2014, which represents an annual increase of 17.5 percent, according to a statement on the macroeconomic climate from the Mozambican Ministry of Economy and Finance.

In turn, domestic public debt on that date stood at 31.540 billion meticais (about US$839 million), an annual increase of 6.1 percent.

The rise in debt was due to the need to “cover the budget deficit and the implementation of socio-economic development programmes that are essential for the country,” the document said.

To service its debt in the second half of 2014 the Mozambican state spent 13.5520 billion meticais (US$36 million) for foreign debt and US$27.548 billion meticais (US$73.2 million) for domestic debt .

However, the government of Mozambique announced in parliament that is was negotiating the ways in which the State endorsed a loan of US$500 million to finance Mozambican tuna company Ematum, arguing that the repayment period is short.

“Seven years is a short period to pay US$500 million even with a grace period of two years, especially at high interest rates. We are trying to negotiate a longer payment period and lower interest rates,” the Minister for the Economy and Finance told members of parliament.

Adriano Maleiane said that figure was the amount the State would pay of a total US$850 million it borrowed to finance Ematum by issuing debt on the European market.

Ematum, which is owned by the social services of Information and State Security Services (SISE), is currently the focus of a major controversy in Mozambique. (macauhub/MZ)