africa Banking Currency Finance Government Mozambique

Mozambique to propose extension of payment terms and a drop in interest rates on loans

The Mozambican government will propose extending repayment periods and reducing interest rates on state-backed loans taken on by three state-owned companies, said national budget director Rogério Nkomo.

Yuri Soloviev, the first executive vice president of Russian bank VTB, recently told Reuters that the bank is available to start talks on Mozambique’s debt restructuring and gave assurances that all possible information was provided so Kroll Associates UK could carry out its audit.

The national budget director added that although the government has not yet defined the pattern of the renegotiation, it is customary in these cases to propose the extension of repayment periods and the reduction of interest rates.

Mozambique has already gone into financial default because it failed to pay several coupons related to these loans, granted to tuna company Ematum, Prodindicus and Mozambique Asset Management in the amount of US$2 billion.

The International Monetary Fund (IMF) and the other agencies and countries that support Mozambique have frozen aid until the results of an independent and international audit of the debts have been published.

The report on the audit of the three companies, carried out by Kroll Associates UK, was recently handed over to the Attorney General of the Republic of Mozambique.

Source: Macauhub

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