Maputo, 27 Aug (AIM) – Mozambique’s stock of public debt has grown by 77 percent over the last eight years, from 8.173 billion dollars in 2014 to 14,469 billion dollars in 2022, of which 10.060 billion dollars is foreign debt.
According to updated figures from the Medium-Term Strategy for Public Debt Management (2023-2025), unveiled recently by the Ministry of Economy and Finance, the increase in foreign debt (which stood at 7.068 billion dollars in 2014) was influenced by loans from the World Bank, the International Monetary Fund (IMF), the African Development Fund (ADF) and China, totaling around two billion dollars between them.
This amount is equivalent to 66.8 per cent of the debt contracted by the state during this period.
“The World Bank, the government’s main financial partner in SUSTENTA (the government’s flagship agricultural development project), lent the country a total of 726.6 million dollars from 2014 to 2022. It is followed by the IMF, which lent a total of 566.9 million dollars, amounting to loans of 1.294 billion dollars from the Bretton Woods institutions”, reads the document.
China, which has become a major partner in infrastructure construction, was responsible for a credit of 359 million dollars, while the African Development Fund lent Mozambique 347.4 million dollars.
The loans mostly took place at a time when most of Mozambique’s western partners had suspended direct support for the state budget, due to the discovery, in April 2016, of the true scale of the scandal of the “hidden debts”.
“Between 2014 and 2022, the domestic debt stock increased by around 300%, compared to the foreign debt which increased by 42%. This expansive dynamic of domestic indebtedness was determined by the need to finance a growing primary deficit in the midst of a persistently adverse macroeconomic environment (natural disasters, Covid-19 and terrorism in Cabo Delgado), combined with a scenario of falling tax revenues and restrictions on access to external resources”, explained the note from the Ministry of Economy and Finance.
What is delicately called “restrictions on access to external resources” was an entirely self-inflicted wound arising from the massively corrupt way in which the “hidden debts” were contracted.