|May 16, 2002
MOZAMBIQUE: UK forgives US $152 million debt
On Thursday, May 16, Britain announced that it had written off all of
Mozambique’s bilateral debt. The US $152 million was scrapped under the
Heavily Indebted Poor Countries (HIPC) debt relief scheme, British embassy
officials in Maputo said.
Minister for Finance and Planning Luisa Dias Diogo told IRIN: "The
forgiveness is crucial in delivering Mozambique's Action Plan for the
Reduction of Absolute Poverty. The savings will allow us to spend more money
on education, health, infrastructure and rural development. Eighty percent
of the population depend on agriculture as a primary source of income," she
On the other hand, in the beginning of April, Jubilee 2000 co-coordinator of
Economic Justice and External Debt Sector, Gaime Chivite, had said that „the
figures may appear encouraging, but it is too soon to judge if the HIPC
initiative will have any impact on ordinary people. Most Mozambicans remain
poor. In fact the gap between the rich and the poor has widened. Although
the government has increased spending on social welfare, it is negligible as
to make any difference".
The debt relief was signed late Wednesday, May 15, by Britain's Junior
Foreign Minister for Africa, Baroness Valerie Amos, and Mozambican Foreign
Minister Leonardo Simao.
Before qualifying for HIPC, Mozambique, one of the world's poorest
countries, had a staggering foreign debt of more than US $5 billion. Most of
the debt has now been forgiven. Mozambique's debt stands at slightly under
US $1 billion.