Mozambique will continue not paying its debts if an agreement with creditors is not reached by September

28 May 2018

The payment in 2019 of the amounts owed for the loans contracted by public companies in Mozambique with the endorsement of the State will only be possible if an agreement is reached with creditors by September, which is the deadline for those payments to be included in the State Budget for the next year, said the Minister of Economy and Finance, Adriano Maleiane.

The minister, speaking to Lusa in Busan, South Korea, where he attended the annual meeting of the African Development Bank (ADB), also said that the negotiation process has no deadline, which is not the case with the State Budget, whose preparation period runs until August/September.

Maleiane said he was confident that negotiations would be concluded by the end of the summer, adding that creditors requested additional information that his “advisers are preparing.”

The Mozambican government last month proposed to public debt creditors and investors a 50% pardon on delayed debt, that is, US$318 million of the US$636 million of debt that should have already been paid.

According to the document submitted to creditors in London, Mozambique proposed a 50% debt pardon on past interest and penalties, if any, “as well as changes in interest rates and the maturity of debt issuance, whose initial term ended in 2020 and was previously extended to 2023 at the end of 2016. (macauhub)