The revelation that the Government Mozambique has been hiding $2.3bn dollars of loans from both the International Monetary Fund (IMF) and the people of Mozambique has significantly tarnished the good reputation which the country had built as an ideal destination for investment, and government is battling to do damage control.
Although he acknowledged that the country faced “short-term payment difficulties”, Finance Minister, Adriano Afonso Maleiane, said the “debt situation is under control and there are no major concerns”.
Maleiane has said that the country’s public debt totals $11.64-billion, of which ($9.85-billion is owed to foreign investors).
Meanwhile, the discovery of the secret loans has prompted the IMF and Western countries to suspend aid to Mozambique.
The donors’ decision to suspend aid to Mozambique is likely to worsen the country’s economic woes. The commodities price downturn has impacted on the mining, oil and gas investments, with some projects put on ice.