G14 donor group suspends aid to Mozambique

A group of donor nations known as the G14 which supports Mozambique has suspended aid to the country following a recent revelation of hidden debts amounting to about one billion dollars.

The suspension from the donor group currently headed by Portugal, comes weeks after the International Monetary Fund (IMF) also suspended funds to the country.

The international lender suspended the disbursements of $155 million of a $286 million emergency loan it agreed with Maputo in October and subsequently canceled a visit to that country.

New #Mozambique economic update recommends improved monitoring, disclosure & management of debt & fiscal risks More: https://t.co/yKyvofcdxz

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The development is expected to gravely affect Mozambique whose budget – at least a quarter of it – is sponsored by foreign donors.

During a visit to Mozambique by the Portuguese leader, the Mozambican president, Filipe Nyusi asked the G14 group to review its decision.

Nyusi said Mozambique had had a meeting with the IMF and “showed them (IMF) the enterprises involved in the situation. There are three of them. They still exist and their headquarters can be traced. They should be the first to carry the responsibility.”

His Portuguese counterpart Marcelo Rebelo de Sousa, however assured that the suspension of aid was temporal.

“We have started discussing and working to create conditions which will help us overcome the situation,” he said.

The withdrawal of aid could further weaken Mozambique’s economy which has been badly affected by the fall in the prices of raw materials and a strong devaluation of its currency.

AFP