Mozambique’s government officially declared this week that its public debt levels were unsustainable. In a letter to its creditors, it asked for the deferment of “hidden debts” – a reference to loans totaling 1.3 billion euros ($1.4 billion) which three state-owned concerns had taken out with international banks. The government had kept the existence of these loans secret. When the details were finally exposed, the International Monetary Fund (IMF) responded by freezing payments to Mozambique. This was a severe blow to the southeast African country which has been plunged into an economic crisis by falling commodity prices and the depreciation of the national currency, the metical.
Lower commodity prices have hit Mozambique hard….
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