Negotiations with creditors stop payment of the debt, Mozambican PM says

30 November 2017

The proposed Mozambican State Budget for 2018, submitted to the country’s parliament, does not include servicing public debt, as this is in the process of being negotiated with international creditors, the country’s Prime Minister said during parliamentary question time.

Carlos Agostinho do Rosário, cited by daily newspaper Noticias said it was this negotiation process that led the government to suspend payment of arrears.

“The government continues to negotiate with international creditors in order to ensure that debt servicing does not adversely affect the implementation of the five-year programme,” said the prime minister, adding that for the duration of the negotiations with creditors and the continued process relating to the issue at the Attorney-general’s office the government will not pay any instalments.

The debt in question, amounting to US$2 billion, is the result of three loans taken on by three public companies – Empresa Moçambicana de Atum (Ematum), Mozambique Assets Management (MAM) and Prodindicus – which were guaranteed by the State.

The loans were set up and placed with investors by Credit Suisse, and Russia’s VTB banks, two of them in 2013 and one 2014, during the term of the previous President Armando Guebuza. (macauhub)