Government of Mozambique rejects full payment of debts incurred by public companies

10 June 2016

The government of Mozambique plans to find a balance between the need to service debt and to ensure the financing of the country’s development projects, the country’s Prime Minister said in Maputo.

Carlos Agostinho do Rosario, speaking at an extraordinary session of the Mozambican parliament to analyse public debt, said that the commitments taken on by state company Proindicus and Mozambique Asset Management (MAM) when they took on foreign loans cannot take priority over the government’s responsibilities.

Stressing that public debt is only an issue because the government provided a State guarantee so that the two companies could take on loans, the Prime Minister assured members of parliament that the government would only take responsibility for the amount of debt that proves to have been applied for the benefit of the community.

“The assumption of debts resulting from the granting of sovereign guarantees in favour of Proindicus and MAM would mean defrauding the expectations of Mozambicans,” said Rosario, quoted by daily newspaper Notícias.

The prime minister also said that “the debt was contracted by Empresa Moçambicana de Atum, ProIndicus and MAM, with a State guarantee, so the primary responsibility to take it on and pay it without burdening the state budget rests on them,” said the Prime Minister.

Mozambique’s public debt, including guarantees issued by the government and debts incurred by the central bank to finance the balance of payments reported on 31 December 2015 was US$11.64 billion.

Of that total US$9.8 billion were foreign debt, including US$247 million from the Bank of Mozambique, and domestic debt totalled US$1.75 billion. (macauhub/MZ)