After western powers, the International Monetary Fund (IMF) and World Bank recently suspended financial aid to Mozambique, the country has now turned to China.
Mozambican President Filipe Jacinto Nyusi is currently on a 5-day state visit to China in what is being viewed as a move to tie up financing to cover the gap in the country’s public finances.
The president, who is accompanied by high ranking government officials, met with Chinese Premier Li Keqiang who pledged cooperation in industrial and production capacity.
For months, President Nyusi had been denying press reports about corruption and misappropriation of funds in the southern African country but came under pressure and finally admitted to hidden public debt amounting to over $1 billion accumulated by his predecessor Armando Guebuza.
Nyusi was elected into office in 2015 and his visit to the Asian economic giant represents Mozambican attempts to look elsewhere for funding and China’s growing role as the lender of last resort to African countries.
In 2015, China offered $5 billion to Mozambique for various infrastructure projects during the Sino-Africa Summit in South Africa.
According to official data, Mozambique’s public debt is now about 70 per cent of its GDP, the highest since 2012.