Mozambique and VTB bank about to reach agreement on loan

30 May 2016

Mozambique and Russian bank VTB are close to reaching an agreement on the restructuring a loan to public company Mozambique Asset Management (MAM) and payment of the first installment, due on 23 May, Bloomberg reported.

Rogério Nkomo, spokesman for the Finance Minister, told the financial news agency that “the government of Mozambique is negotiating with the Russian bank on how to make the loan repayments and restructuring of the loan.”

However, countries and multilateral organisations that support Mozambique, including through direct funding to the state budget, issued a document requiring full disclosure of the “state of the country’s public finances”, before any aid can resume.

“Suspension of aid derives from what is understood by the partners of the support programme as a serious breach of trust, low level of governance and lack of fiscal transparency,” said the document.

The members of the Group of 14 require the Mozambique government to provide a list of all existing and planned loans, with details on what the money will be used for, terms and repayment conditions as well as the disclosure of the MAM shareholder structure and of another public company, Proindicus, which in 2013 took on a loan with a State guarantee, in the amount of US$622 million. (macauhub/MZ)