In 2014 Mozambique was host to the MIF’s Africa Rising Conference, when the economy was buoyant, having grown at about 7% for a year for the past decade. Offshore gas promised riches, and investors were optimistic. In 2013 $850 million of bonds were issued by a state owned tuna fishing company, offering high yields. It is likely that the government is going to default on the debt payment due later this month. The downturn in global commodity prices caused economic growth to slump to 3.4% last year, though it should pick up this year. The government’s troubles, however, are rather due to incompetence and fecklessness.

The money raised was instead invested in buying gunboats. Alongside this the government had guaranteed $1.4 billion in secret loans, worth 11% of its GDP, shocking the IMF and donors. Financial support for the African nation has been temporarily frozen. Now that debt is 112% of GDP, and members of the ruling party Frelimo wish to have it restructured. If they are unable to do this, they may struggle to gain support in local elections next year and the presidential contest in 2019.

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