Mozambique obtained ra debt relief of about 40 million euros in the first half of this year to better cope with the effects of the covid-19 pandemic thanks to moratoria granted by Portugal, announced Tuesday a government source.
“The relief is a little over 40 million euros in this first semester” in which moratoria were applied on two credit lines, concessional and commercial, explained Francisco André, Portuguese Secretary of State for Foreign Affairs and Cooperation.
In practical terms, there was “a suspension of interest and capital payments,” and a “joint work” is underway to “see if it is possible to reach a similar situation for the second half,” he said at the end of a four-day visit to Mozambique.
In the same period, the interest rate on the commercial line was reduced from 7% to 5%.
The postponement of installments is the result of “quite hard work between the two parties” over the past few weeks and comes in line with the G20 Debt Service Suspension Initiative (DSSI).
The aim is to “support Mozambique at a particularly difficult time,” when any economic growth “is very limited by the effects of the covid-19 pandemic.”
“In the framework of this very close and very special bilateral relationship between the two countries, we reached an agreement that I think is quite beneficial for Mozambique. It is a clear sign of Portugal’s support, that we are walking together to allow a better economic recovery in the post-pandemic period,” he justified.
In February, the government of Mozambique and the Paris Club (Brazil, France, Japan, Republic of Korea, Russia and Spain) had already reached an agreement to extend the debt moratorium until June, allowing the country to defer payments worth $250 million, using the amount to “mitigate the health, economic and social impact of the covid-19 crisis,” the grantor governments announced.
