Moody’s lowers Mozambique’s credit rating

10 August 2015

The Moody’s credit rating agency has lowered the credit rating on Mozambique’s debt from “B1” to “B2”, and the outlook from stable to negative, the agency said in a statement issued Friday.

The main reason for this downward review of the credit rating is poor performance of tax and debt parameters that are expected to remain unchanged in the mid term while the downward review of the outlook is related to uncertainty about the government’s strategy to ensure growing debt servicing in foreign currency.

In a statement published Friday in New York, the agency said the government of Mozambique had allowed large budget deficits as a result of an increase in capital expenditure (16.5 percent of GDP in 2014) current expenditure and decreased support from international partners.

Moody’s also lowered the credit rating from “B2” to “B1” and outlook to negative from stable of Ematum Finance 2020 B.V, a debt issue of US$850 million for tuna company Empresa Moçambicana de Atum (Ematum) in line with changes to the ratings on Mozambican state debt. (macauhub/MZ)