China writes off €32M debt for Mozambique
London, March 22, 2021 (AltAfrica)-The relationship between China and Mozambique mutually beneficial to the extent that China has announced a partial pardon of 244.6 million yuan (€32 million), equivalent to about 2% of Mozambique’s debt with the Asian country, to help in the fight against Covid-19.
The partial pardon results from an agreement signed in Maputo by China’s ambassador to Mozambique, Wang Hejum, and Mozambique’s minister of Foreign Affairs and Cooperation, Veronica Macamo.
“The Chinese side waives obligations of the Mozambican side in terms of the repayment of three loans, without interest,” Chinese Ambassador Wang Hejum said, without giving further details, in a press statement after the signing in which there was no room for questions.
“China is a friendly country that has always known how to be by Mozambique’s side in the difficult moments and the golden moments. Therefore, this gesture by China does not surprise us. This brother country has always been consistent in its support to Mozambique,” said Veronica Macamo.
In addition to the partial debt pardon, the parties also signed an agreement providing for the Chinese government to disburse 150 million yuan (€19 million) for social and economic projects.
According to the most recent figures, released by the Mozambican minister of economy and finance in parliament in November, the debt with China is around $2 billion (€1.6 billion), or in other words, represents around 16% of the total Mozambican public debt of around $12.37 billion (around €10 billion).
According to that data, a major portion of the debt to China, amounting to $1.97 billion (€1.66 billion), is owed to the Chinese Exim Bank and was used mainly for the construction of roads and bridges, including the Maputo ring road, the suspension bridge over Maputo Bay and the roads to the south.
Several civil society organisations have criticised the opacity of the contracts with China, and the Centre for Public Integrity published a study in October in which it called it frightening.
At the time, Adriano Maleiane, Minister of Economy and Finance, dismissed the fears: “I do not have this drama,” he said, considering the debt service with China normal and noting that Maputo’s priority has been to resort to concessional loans.