Friday, June 8, 2018

Exceed IMF debt limits

Mhoje_imflogo7_photo_jpg (1)Mozambique will surpass all five benchmarks used by the International Monetary Fund (IMF) to evaluate debt sustainability by July, the government admits in documents presented at meetings with creditors.“By the end of 2017, all indicators of Mozambique Debt Sustainability Analysis (except the ratio of debt service to exports) were above the prudence threshold for countries with an average Country Policy and Institutional Assessment ( CPIA),” one pages of the presentation to creditors held on March 20 in London reads.
Below, it is stated that “until March 20, 2018, Mozambique had delays in the payments of Mozam2023, MAM and Proindicus [the sovereign debt securities maturing in 2023 and the two loans contracted by two public companies with state guarantees] amounting to approximately US$636 million,” which means that all five IMF-defined ceilings had been exceeded.Under the Fund’s internal rules, countries that exceed these levels are unable to receive financial assistance, making Mozambique’s already complicated economic situation even more difficult.In the spotlight are the current value of debt vis-à-vis GDP, exports and revenues, debt service in relation to exports and debt service against the value of revenues.By the end of last year, only the ration of debt service to exports was below the limit defined by the Fund, but a change in criteria in July means this value exceeds the maximum level indicated by the IMF.

100,000 tonnes

Ship.maputoport.not_The port of Maputo on Tuesday handled the first ship weighing over 100,000 tonnes, thanks to the dredging of the access channel in 2016/2017.According to a press release by the Maputo Port Development Company (MPDC), the ship, the “MV Magali”, left the port on Tuesday night, laden with 100,674 tonnes of chrome destined for China.The “Magali” is a Capesize bulk carrier, flying the Panamanian flag. Its total capacity is 104,229 tonnes.Such a large ship could only use Maputo because the dredging concluded last year deepened the access channel from 11 to 14.2 metres. Without this dredging the port could not have handled Capesize ships.The MPDC release notes that, even before the dredging was completed, in late 2016 the port received the 90,000 tonne bulk carrier “Mineral Belgium”, at that time the largest ship ever to use the port. The “Magali” sets a new record for the port.MPDC adds that the rehabilitation of quays 6, 7, 8 and 9 is due to begin this quarter. Together, they amount to 1,058 metres of berth. At these berths, the depth will be increased to 15 metres, allowing Maputo to receive and load very large vessels on a regular basis. The rehabilitation of quay 9 is scheduled for February 2019, and work on the other three should be completed by December 2019.MPDC is a consortium between Mozambique’s publicly-owned ports and rail company, CFM, which holds 49 per cent of the shares, and Portus Indico, with 51 per cent. The latter is a partnership between DP World of Dubai (with 48.5 per cent), Grindrod of South Africa (also 48.5 per cent) and the Mozambican private company, Mocambique Gestores (three per cent).MPDC was granted the lease on Maputo port in April 2003 for 15 years, and in 2010 the lease was extended for a further 15 years, with the option of an additional ten years after 2033.