Mozambique’s Minister of Finance and Economy, Adriano Maleiane has on Monday said the country’s foreign debt is still at sustainable levels after a government move to keep the key ratio between the net present value of the debt and Gross Domestic Product (GDP) to below the ceiling of 40 percent.”In 2014, that ratio reached 37 per cent, but in 2015 thanks to the work we have been doing there was practically no increase in indebtedness, however though, GDP this year is larger than it was last year, he said
According to Maleiane, there had been a steep increase in debt between 2012 and 2014.
The foreign public debt grew by 55.3 percent to $7 billion from $4.8 of which $1.5 billion of this debt derives from just three loans; one is $500 million for coastal protection, which is part of the $850 million borrowed by the Mozambican Tuna Company, EMATUM on the Eurobond market in September 2013.
Hence the debt to GDP ratio had declined; Maleiane put it at 31.9 per cent.
But he admitted that to reach this figure, he had eliminated the effect of changes in the exchange rate (which have been very substantial in the past few months due to the sharp devaluation of the Mozambican currency, the metical, against the US dollar.)