Tue. Dec 5th, 2023

The Mozambican government has said it is willing to negotiate the conversion of debt into a financing mechanism for the “climate transition” with Portugal, a source from the Ministry of Economy and Finance told Lusa last week.

“We are receptive and available to evaluate with our partners the feasibility and possibility of converting the debt into a financing mechanism for the climate transition,” said the source.

Mozambique’s exposure and vulnerability to the impact of climate change increase the country’s interest in analysing this form of debt conversion with its cooperation partners, he added.

“It’s an approach that has been studied with various partners, and we can discuss it with Portugal as well,” he emphasised.

In June this year, the governments of Portugal and Cabo Verde signed an agreement that allows for the conversion of debt into investment to accelerate the climate transition and promote the green and blue economies in the African country.

Mozambique owes Portugal around €675 million.

The Mozambican state closed the third quarter with a public debt of 971.78 billion meticais (€14.25 billion), an increase of 5.1% compared to the end of 2022, according to official figures.

“This worsening was largely influenced by the evolution of domestic debt, in a context of relative stabilisation of external debt,” reads the report on the economic and social balance of the implementation of the budget from January to September 2023, to which Lusa had access.

In the document, the Ministry of Economy and Finance stated that external debt remained practically unchanged until September, at 643.5 billion (€9.43 billion), while domestic debt grew by 16% compared to December, reaching 328.29 billion meticais (€4.81 billion) at the end of September.

By Joy

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