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Mozambique: Debt crisis despite Eurobond restructuring

ECONOMIC RESEARCH DEPARTMENT  
Mozambique: Debt crisis despite Eurobond restructuring  
Mozambique urgently needs to resume a medium-term agreement with the IMF, the latter having suspended its  
cooperation in 2016, after discovering a hidden debt of around 1.2 billion dollars. Already, a first default of a Eurobond  
issued on 2013 for an amount of 850 billion dollars, in order to finance patrol vessels, had led to a first restructuring.  
Following a second default in January 2017, a new restructuring agreement for about 900 billion dollars has been reached  
last September.  
Nonetheless, the Mozambican state creditworthiness remains very fragile. A part of the hidden debt (around 8% of GDP)  
remains in default and a judicial battle is underway against Mozambican’s state. The latter is asking for the deletion of one  
of the two state guarantees issued. Total external debt still represented 109% of GDP at the end of 2019. Without IMF  
support, new defaults are to be expected in the medium term.  
%
of GDP  
1st Eurobond restructuring + Hidden Debt Case  
1
1
1
40  
2
nd Eurobond  
20  
00  
restructuring  
Total Public Debt  
Eurobond  
Tuna Bonds"  
8
6
4
2
0
0
0
0
0
"
issuing  
2
012  
2013  
2014  
2015  
2016  
2017  
2018  
2019f  
2020f  
Source: IMF  
economic-research.bnpparibas.com  
Sara Confalonieri  
15 January 2020  
QUI SOMMES-NOUS ? Trois équipes d'économistes (économies OCDE, économies émergentes et risque pays, économie bancaire) forment la Direction des Etudes Economiques de BNP Paribas.
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