Mozambique won’t make payments for at least five more years on about $2 billion of loans that led to a default last year, according to the International Monetary Fund.
The government has amassed $710 million of arrears on the debt, most of which it previously hid from the Washington-based lender, according to an Article IV report and an associated Debt Sustainability Analysis to be submitted to the fund’s board March 2. The documents were shown to Bloomberg by two people who declined to be identified because they’ve not been published yet.
Reuter’s news agency reports that IMF Resident Representative Ari Aisen declined to comment. Finance Ministry spokesman Rogerio Nkomo acknowledged receipt of an email sent by Bloomberg, but didn’t immediately provide comment.
The IMF report and its assumptions are likely to play a key role in the debt restructuring discussions Mozambique plans to hold with its commercial creditors. The government will present proposals to the holders of the debt on March 20, in London.
“It is staff’s understanding that the authorities plan to hold off on making payments on the defaulted loans,” the fund said in the report. Arrears are expected to accumulate until 2023, when Mozambique will start producing gas from large offshore deposits, the IMF said.
Mozambique borrowed about $2 billion from 2013 to 2014 in deals arranged by banks including Credit Suisse AG and VTB Capital to buy tuna-fishing boats and an associated coastal security system. The government only disclosed the bulk of the debt to the IMF in 2016, prompting it to halt funding, while donors suspended direct budget support.
An audit published last year found $500 million of the spending remains unexplained, while suggesting the state-owned companies involved paid too much for the equipment, a claim the supplier denied.
The three companies involved -- Ematum, ProIndicus and Mozambique Asset Management -- should be liquidated and their security assets transferred to the state, the IMF said in the Article IV report.
