The Senate in Brazil has approved the restructuring of a $143 million debt owed by Mozambique, in a move aimed at resolving years of repayment challenges.
The debt arrangement follows a series of defaults dating back to 2017, with the situation further worsened by the economic impact of the COVID-19 pandemic.
Under the new terms, the liability, now assumed by the Brazilian government after compensating the country’s development bank, will be repaid over an extended period at an interest rate of 3.6% per year.
Brazil’s Banco Nacional de Desenvolvimento Económico e Social had initially been exposed to the loan, prompting the state to step in and absorb the risk.
Brazilian economist Reinaldo Tura Junior says the agreement could offer Mozambique short-term financial relief, but cautions that it also highlights broader concerns around debt sustainability and long-term fiscal management.
–ChannelAfrica–
