Mozambique: Portuguese President Confirms Suspension of Aid

Maputo – Portuguese President Marcelo Rebelo de Sousa on Wednesday confirmed that the group of 14 donors and financing agencies which provide direct support for the Mozambican state budget have suspended financial assistance, in the wake of the revelations that about 1.4 billion US dollars of loans contracted by state concerns, and guaranteed by the government, had not been disclosed, either to the International Monetary Fund (IMF) and the government’s other partners or to the Mozambican public.

The suspension, according to Finance Minister Adriano Maleiane, affects about 12 per cent of the budget.

Speaking to reporters in Maputo after talks with his Mozambican counterpart Filipe Nyusi, Rebelo de Sousa stressed that the aid has only been suspended, not cancelled. “It’s not a definitive halt to aid, but a mere suspension for the purposes of clarifying certain situations. This makes all the difference”, he said.

Portugal currently chairs the budget support group, who are known as the Programme Aid Partners (PAPs), or simply as the G-14.

Rebelo de Sousa said that measures are now under way to stabilize the Mozambican financial situation. “We have begun to talk, and not just talk, but also work, in order to create conditions for the future, and the sooner the better, so that what is happening now can be rapidly overcome”.

He added that partners such as Portugal can play a preponderant role in clarifying the dispute over the debt inherited from the previous government, led by Nyusi’s predecessor, Armando Guebuza. He thought the most important aspect was the frankness shown by Nyusi in dealing with the matter,

Nyusi told the joint press conference that the fears expressed by Mozambique’s partners are normal, since they were likely to feel uncomfortable in continuing to invest while matters are not properly clarified.

But he was sure that “no donor is interested in sacrificing the Mozambicans. The measures that are being taken seek to create the sustainability of the state”.

It was important to know whether the debt was sustainable, he added, stressing that Mozambique “is not the worst debtor”.

Nyusi urged Mozambicans not to despair, since this was a challenge that will serve to develop mechanisms of transparency in managing the country’s public debt.

Comparing the debt to disease, Nyusi said that if a patient is diagnosed with malaria, the correct course of action is not to deny the results, but to try to understand them. “That’s what we’re doing now”, he said, “we’re understanding the origin of the disease so that we can combat it”.

The talks between the two presidents also focused on the military tension in parts of the country with clashes between gunmen of the rebel movement Renamo and the national defence and security forces. Nyusi stressed that there should be no such thing as armed political parties, with one foot in parliament, and the other in an illicit militia.

SOURCE: Mozambique News Agency