Reacting to reports that the government of Mozambique has announced that it cannot pay its private external debt, Sarah-Jayne Clifton, Director of the Jubilee Debt Campaign, said:
“Mozambique’s unpayable debt is the result of reckless lending and borrowing and the crash in the price of commodities. It is immoral for those who lent the money or bought up debts cheaply to now profit from the crisis. Mozambique needs debt cancelling, and we need urgent legal changes here in the UK to stop hold-out creditors and vulture funds from blocking that process.”
Mozambique’s Ematum bond, and the loans by Credit Suisse and VTB to Proindicus and Mozambique Asset Management, are all owed under English law.
Jubilee Debt Campaign predicted in July 2015 that Mozambique was likely to suffer a new debt crisis based on the scale of lending, current account deficit and dependence on commodities.
For more background on the situation in Mozambique see: ‘Mozambique’s secret loans: A scandal that started in London’