Africa-Press – Mozambique. Mozambique: Budget Monitoring Forum highlights impact of public debt on poor
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Maputo, Sept. 23, 2021 (Lusa) – The Budget Monitoring Forum (FMO), a coalition of Mozambican non-governmental organisations interested in monitoring and influencing national public finances, on Thursday announced a campaign on the implications of public indebtedness for ordinary people in the country who live “mostly on less than a dollar a day.”
Over 30 days, FMO said in a statement, it will “publish video works and articles to raise awareness among Mozambicans about the debt and its implications.”
The forum notes that “over the last five years, Mozambique’s public debt has grown rampantly, changing structure from a predominantly concessional to non-concessional composition.
“A large part of our debt was contracted to carry out investment projects whose priority is absolutely questionable” and which “are incapable of generating profits to be self-sustaining,” it adds.
At the same time, the capacity for “investment in social sectors, health, education, water and sanitation, social protection” is limited and there is no greater distribution of wealth “to the point of contributing to solving the main problems of poverty in the country,” such as hunger, chronic malnutrition, lack of access to drinking water and sanitation, it stresses.
The country’s minister for the economy and finance, Adriano Maleiane, said during the debate on the 2021 State Budget that Mozambique’s public debt totalled $12.37 billion (€10.549 billion).
Most of this debt, $9.85 billion, is external and the remainder is domestic, in the form of treasury bonds on which the state must pay high interest rates.
Around 44% of the external debt is made up of loans from multilateral institutions such as the World Bank and the African Development Bank, while around $2 billion is owed to China, mainly for construction of the ring road and suspension bridge over Maputo Bay, as well as the roads to the south of the country.
Maleiane said that this investment is to be paid for with tolls, but without detailing the accounting and calculations based on existing traffic.
Besides the official total for public debt, there are state guarantees provided to two public enterprises involved in the ‘hidden debts’ scandal, Proindicus and MAM (Mozambique Asset Management), which took out foreign loans that state is seeking to annul in lawsuits underway in international bodies.
Of these undeclared debts of $2.7 billion, Mozambique is honouring the $900 million that concerns the restructuring of eurobonds that were to have financed state-owned fishing enterprise Ematum.
