IMF Blames Bad Loans For Mozambique’s Soaring Debt-To-GDP Ratio
Mozambique’s head of state Joaquim Chissano left office in February 2005 after 15 years. His replacement, Armando Guebza, that same year opened Mozambique’s coastline to international companies seeking to search for resources. Between 2005 and 2006 three firms were able to capture rights to explore the coast, Anadarko, Italy’s Eni, and Petronas. Some 75 trillion cubic feet of natural gas was discovered and this set of a a blitz into Mozambique as international banks, corporations, and organizations flooded the area. This opened a breeding ground for corruption and unregulated financing, specifically the controversial Tuna Bond that was supposed to be used to support regional fishing and was instead used for military expenditures and to purchase some 40 boats that remain anchored to this day.
The Collapse Of Mozambique’s FX – Annotated With Key Events
On Friday Reuters said the IMF blamed “undisclosed loans” for Mozambique’s 86% Debt/GDP ratio.
“Mozambique’s economic growth will likely slow to 4.5 percent in 2016 from 6.6 percent the previous year due to rapidly rising inflation and growing government debt, the International Monetary Fund said on Friday. The leader of a Fund team that visited the southern African country, Michel Lazare, said the discovery of more than $1 billion of previously undisclosed government debt would increase pressure on the economy.”
On April 19 2015 the IMF suspended its disbursement of $155M payment as part of a larger $286M emergency loan that was established as a means of stabilizing the nation’s currency after it collapsed. What’s frustrating is that the IMF is blaming the 86% Debt-to-GDP as if they had not planned for it.
…click on the above link to read the rest of the article…
