Swedish finance external audit

Sweden will finance an international audit and independent loans hidden for Mozambique worth about 1.4 billion dollars, reports Bloomberg today, citing a source close to the process.

According to the news of the financial information agency, the terms of reference for the audit, which is one of the requirements of the International Monetary Fund to resume talks on a new financial assistance program for the country, should be completed by the middle of this month after launching the Attorney General's Office an international public tender.

Bloomberg tried to contact the Mozambican PGR spokesman and the Embassy of Sweden in Maputo, but without success. Sweden is part of the group of international donors suspended earlier this year financial aid to Mozambique, following the disclosure of international loans with state guarantee, but were hidden from the IMF and all official institutions. The RMP of Mozambique, the source said Bloomberg, also indicated that the company's selection process that will audit will take a maximum of 90 days, which throws the start of the audit in mid-February, already sticking the deadline appointed by the Ministry Finance a presentation of the financial inability of the country, made in London in late October. Conducting an audit of accounts of public companies who have contracted international loans guaranteed by the state in the amount of 1.4 billion dollars (almost EUR 1.3 billion), and the process that led to the conversion of the Company's obligations Mozambican Tuna (Ematum) in government bonds is one of the requirements IMF to prepare a new financial aid program.

The other technical requirement of the IMF involves the assessment of public finances of the country, which is currently in 'debt distress', ie with debt stress or problems, which makes financial aid - to assess this debt the IMF uses to five indicators.

"Currently, Mozambique sticks all five indicators to assess debt sustainability", assumes the document presented to international investors, who therefore proposes a set of meetings with the creditors of SOEs Mozambique assett Management and Proindicus to outline the next steps.The main objective now is "resuming relations with the IMF to stabilize the economy and restore the confidence of the international community," but the government assumes that "discussions can only start if Mozambique is no longer in the country category with 'debt in effort '[debt distress in the original in English], which implies that the finances and public debt must be on a sustainable path, "reads the document.

Define the sustainable path, renegotiating the terms of payment of the debt, it is what the government intends to do with the lenders, and hired financial and legal advice of the British Lazard Frères and White & Case LLP, respectively, which from now on will be the face of the Government in contact with creditors.

The period desired by Mozambique passed by the start of meetings with creditors still in October, then in November to discuss the format of the restructuring of debts, to reach an agreement in December to begin payments in January, the time at the beginning of the next year start negotiations with the IMF on a financial aid package. Over 20 pages, the Finance show the inability to pay the debts of enterprises that have hidden loans, assume that the public debt will reach 130% of GDP this year, and take the opportunity to revise downwards the economic growth forecast to 3 , 7%, also stating bluntly that debt metrics are unsustainable. "The depreciation of the local currency has exacerbated the rising debt volume and the cost of servicing the debt, the level of external public debt and guaranteed by the state exceeds 100% of GDP in 2017, the cost of servicing the public debt and publicly guaranteed including late payments, should reach 826 million dollars, on average, between 2017 and 2021, or roughly 6.9% of GDP per year, "reads the presentation available to creditors.