Financing | Mozambique’s Nyusi to Visit China Next Week, Presidency Says

Maputo, Mozambique, Capital Markets in Africa: Mozambican President Filipe Nyusi will visit China later this month, his office said, weeks after western donors withdrew budgetary support following the southern African nation’s admission to holding more than $1 billion of undeclared loans.

Nyusi’s week-long visit, which received parliament’s go-ahead last week, begins May 16, an official at the presidency said Friday.

“The authorization should not be a blank check to contract more debt,” Lutero Simango, the leader of the opposition Mozambique Democratic Movement parliamentary group, said by phone.

The coal-producing nation restructured credit extended to a state-owned tuna-fishing company without making investors aware of other loans of more than $1.1 billion lent to another two government-run entities. Since the discovery by the International Monetary Fund, European nations and multilateral lenders have withheld funding, while rating companies have downgraded Mozambique’s credit.

Prime Minister Carlos do Rosario met IMF Managing Director Christine Lagardein Washington in April after which Mozambican authorities handed over information about their loans, the IMF’s David Lipton said in an interview on Tuesday.

Fitch Ratings Ltd. estimates that when factoring in the newly revealed loans, Mozambique’s government debt was equal to 83 percent of gross domestic product in 2015. The metical has declined 12 percent this year after depreciating 32 percent in 2015.

Source: Bloomberg Business News