MAPUTO– Mozambique’s Minister of Economy and Finance, Adriano Maleiane, has denied that creditors rejected the government’s debt restructuring proposals put before a meeting in London last week.

In an interview with the independent daily, O Pais, published here Monday, Maleiane also denied that there was any impasse in the talks with the creditors.

I don’t see the impasse you’re talking about. We went to London, first to continue the meeting we held in 2016, when we said we would see how the economy is growing. This time, we gave an update on the situation, and said, ‘Yes, there is an effort, but the conditions still haven’t been created for us to pay, under the terms we had agreed, and so we are accumulating debt’, he added.

It was important to say that we would like to comply with our undertakings, because the State must be credible. But it’s one thing to have the desire, and the reality is something else.”

Maleiane said he presented the creditors with three restructuring options, and we gave the opportunity to each group of creditors to question the document and request any further information”.

“Afterwards, they took the proposals to the creditors that each one of them represents, so that they could then make counter-proposals. We didn’t fix any deadline. When one of them has a counter-proposal, he’ll present it to the government, through our consultants, the Minister said.

Despite this optimistic view from Maleiane, there is no doubt that the initial reaction from the Global Group of Mozambique Bondholders (GGMB) was hostile. Their spokesperson, Thomas Laryea, described the government proposals as a total non-starter.

Maleiane told O Pais he believed this was a reaction to the government’s proposal for a 50 per cent haircut (i.e. cancellation) of arrears in interest payments (currently running at 636 million US dollars).

The creditors, he said, argued that in order to restructure the debt, the interest should be paid. We replied that it’s just a proposal and they would have the possibility to study it. He expected the GGMB, which basically consists of European hedge funds, to present a counter-proposal by April. “Meanwhile, we talk.”