The Fitch ratings agency downgraded the rating of Monday the Mozambican debt from “CCC” to “CC” indicating “the probability” of a partial default, a statement said.
The recent revelation by Mozambique a concealed debt shows that there are “significant short-term repayment obligations that may soon cause a credit event,” says Fitch.
the Mozambican government has recognized in April the existence of a debt of $ 1.4 billion, representing 9.5% of gross domestic product (GDP) in 2015.
These loans were contracted in 2013 and 2014 by State-owned companies and were intended to finance the purchase of military boats and defense equipment.
a first payment of $ 25 million was made in March, but another 178 million dollars is due on May 24, said the rating agency.
“the doubts increased the capacity” of state enterprises responsible for these loans “to pay the interest on that debt and on the government’s ability to honor its obligations, “said Fitch.
the fiscal situation continues to deteriorate, especially after the decision of donors to cease their support in the wake of the discovery of this debt hidden.
this suspended aid amounts to $ 300 million (11% of the Mozambican budget this year) excluding $ 165 million of which the International Monetary Fund (IMF) has also frozen the payment .
“Even if the authorities are able to program reimbursements (…) the possibility of restructuring (…) could precipitate a credit event that Fitch would consider a bad debt “writes the agency does not, in that event, to degrade the sovereign rating of Mozambique to the rank of” partial default “(RD).
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