The International Monetary Fund said it’s ready to start negotiations with Mozambique about a financing programme next month, more than five years after the lender halted its previous deal in the wake of the country’s $2bn (R31.7bn) debt scandal.
Agreeing on a so-called extended credit facility — which could come with $317m in concessional financing — would be a landmark for the IMF and Mozambique. Relations between the two soured in 2016, when the government owned up to about $1.2bn of government-guaranteed loans that it had failed to disclose to the fund under the terms of their agreement.
“Discussions on supporting the government’s programme with an extended credit facility are scheduled to begin soon,” the IMF said in an emailed statement on Tuesday. “Staff stand ready to commence negotiations in late January 2022, in accordance with the authorities’ preferred timeline.”
The fund has previously said negotiations would depend on the government’s appetite for a programme, and President Filipe Nyusi’s government has so far avoided asking the IMF for a new bailout. The government has been anticipating billions of dollars in revenue from offshore natural gas discoveries to start flowing this decade, though an Islamic State-linked insurgency in the north of the country has delayed the projects by years.
While a 3.4-million-tonne per year floating platform Eni has built will start producing liquefied natural gas for export next year, a $20bn project about four times the size that TotalEnergies is leading has been delayed until at least 2026. An even bigger project ExxonMobil plans nearby has been deferred indefinitely.
The Mozambican government faces acute fiscal stresses as spending pressures intensify because of the conflict, the IMF said. It’s relied heavily on domestic financing from banks. Demand for government bonds is declining, and spending arrears are emerging, according to the fund.
The Finance Ministry didn’t immediately respond to emailed questions on the government’s plans for an IMF programme.
Bloomberg. More stories like this are available on bloomberg.com
IMF ready to start loan talks with Mozambique in January
Image: Bloomberg
The International Monetary Fund said it’s ready to start negotiations with Mozambique about a financing programme next month, more than five years after the lender halted its previous deal in the wake of the country’s $2bn (R31.7bn) debt scandal.
Agreeing on a so-called extended credit facility — which could come with $317m in concessional financing — would be a landmark for the IMF and Mozambique. Relations between the two soured in 2016, when the government owned up to about $1.2bn of government-guaranteed loans that it had failed to disclose to the fund under the terms of their agreement.
“Discussions on supporting the government’s programme with an extended credit facility are scheduled to begin soon,” the IMF said in an emailed statement on Tuesday. “Staff stand ready to commence negotiations in late January 2022, in accordance with the authorities’ preferred timeline.”
The fund has previously said negotiations would depend on the government’s appetite for a programme, and President Filipe Nyusi’s government has so far avoided asking the IMF for a new bailout. The government has been anticipating billions of dollars in revenue from offshore natural gas discoveries to start flowing this decade, though an Islamic State-linked insurgency in the north of the country has delayed the projects by years.
While a 3.4-million-tonne per year floating platform Eni has built will start producing liquefied natural gas for export next year, a $20bn project about four times the size that TotalEnergies is leading has been delayed until at least 2026. An even bigger project ExxonMobil plans nearby has been deferred indefinitely.
The Mozambican government faces acute fiscal stresses as spending pressures intensify because of the conflict, the IMF said. It’s relied heavily on domestic financing from banks. Demand for government bonds is declining, and spending arrears are emerging, according to the fund.
The Finance Ministry didn’t immediately respond to emailed questions on the government’s plans for an IMF programme.
Bloomberg. More stories like this are available on bloomberg.com
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