October 22, 2017

False expectation of gas project boom plunges Mozambique deep into debt

The Mozambican government is technically on the verge of an economic crisis, if not already facing one, thanks to reckless borrowing done in secret by top ranking government officials.

Banking on the on a potential liquefied natural gas project (LNG) windfall, the Government went ahead and borrowed including three secret loans amounting to $2bn – between 2012 and 2014 to fund a coastal protection project.

Based on this development, the International Monetary Fund and World Bank have suspended budgetary support.

So far, the anticipated gas project boom remains a mirage, worsened by the recent fall in commodity prices, which has resulted in investors shelving projects.

The first LNP project was expected to come on stream in 2016, but it has been postponed to about 2023 or even later. Even then, according to what a representative of CIP, anti-corruption NGO, told newswire, AFP, should it would take years before the benefit the average Mozambican.

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