China Forgives Part of Mozambique’s Debt

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The Chinese authorities will forgive 30 million yuan (about five million US dollars) of Mozambique’s debt to China under an agreement signed in Maputo on Monday by Mozambique’s Deputy Minister of Economy and Finance, Maria Isaltina Lucas, and the Chinese Deputy Trade Minister, Zhang Xiangchen.

Speaking immediately after the signing ceremony, Mozambique’s Deputy Foreign Minister Nyeleti Mondlane said the Chinese decision will help relieve the pressure on the servicing of Mozambique’s public debt.

The debt cancelled is part of a Chinese loan bearing no interest. Mondlane sad that this debt forgiveness “will contribute to implementing the objectives contained in the Government’s five year programme, particularly at this time of important challenges to the country”.

For his part Zhang expressed China’s willingness to help Mozambique overcome the current economic crisis it is facing.

Welcome though the cancellation is, it is a small drop in a large ocean of debt. According to Prime Minister Carlos Agostinho do Rosario, Mozambique’s total foreign debt, as of the end of 2015, was 9.89 billion dollars.

The two countries also signed agreements on water supply and agriculture. Zhang and Deputy Agriculture Minister Luisa Meque signed an agreement on the opening of 202 boreholes to provide waters to drought-stricken areas.

The third agreement involves the Mozambican and Chinese governments and the Bill and Melinda Gates Foundation, of the United States. It will support agricultural research in order to boost production. The amount of Chinese investment covered by these two agreements was not stated.

Source: AllAfrica