Mozambique: Government contracted new hidden loan of over US$500 million – Financial Times

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The Government of Mozambique approved a loan of more than US$500 million to a public company, which added to the credits to Ematum companies and Proindicus represents almost 10% of the country’s GDP, according to the Financial Times.

According to an unnamed source quoted by the British newspaper, in addition to the obligations of Ematum, the initial value of US$850 million, and the loan to Proindicus amounting to US$622 million in 2013, there was still a third loan whose value exceeded US$500 million dollars, all handled by Credit Suisse, the Swiss bank, and Russia’s VTB bank.

Lusa contacted both banks, which did not respond to requests for clarification.

Adding US$700 million in sovereign bonds that replaced the obligations of the Mozambican company Tuna (Ematum), with US$622 million loan to Proindicus and at least US$500 million dollars to this unidentified public company , the value of debt guaranteed by the state amounts to more than US$1.8 billion dollars.

Therefore, these three funds alone account for almost 10 percent of Mozambique’s gross domestic product , which is currently around US$15 billion dollars.

According to the analysis of the International Monetary Fund, the public debt of Mozambique increased from 39.9 percent of GDP in 2012 to 50.9 percent the following year, increasing to 56.6 percent in 2014 and 73.6 percent in 2015, to only slightly go down to 69.5 percent this year, but these figures are now being question by the news on undisclosed loans.

The news of the second undisclosed loan comes on the same day the Prime Minister of Mozambique, Carlos Agostinho do Rosario, is in Washington to attend a series of meetings including a meeting with the director general of the International Monetary Fund, Christine Lagarde .

According to a statement sent to Lusa by the prime minister’s office on Monday, “the prime minister will confirm the total debt incurred by public companies secured by the state , which do not appear in statistics and were not reported to the IMF, in the context of the economic program under way, for reasons that will be discussed during the aforementioned meetings. “

Besides the visit of Carlos Agostinho do Rosario, the Mozambican government plans to send a team to Washington to “deepen technical aspects related to the public debt.”

The constitution of this technical team was announced on Sunday in a statement the Ministry of Economy and Finance, following the revelation by the Wall Street Journal of a second loan of US$622 million dollars, contracted in 2013 in favour of the Proindicus company to acquire military equipment.

Source: Lusa
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