Mozambique's President Filipe Nyusi. Photo: Reuters.

INTERNATIONAL – Mozambique’s talks with the International Monetary Fund (IMF) are making “encouraging progress,” as the country seeks to restore access to international financing, President Filipe Nyusi said on Wednesday.

Mozambique has been battling to recover from a debt crisis after admitting in 2016 to $1.4 billion of previously undisclosed lending, prompting the IMF to cut off support and triggering a currency collapse and debt default.

Speaking to Reuters on the sidelines of the Russian-Mozambican Business Forum in Moscow on Wednesday, Nyusi said Mozambique was in touch with the IMF on restoring suspended support to the southern African state.

“We want to establish a good relationship with our partners from financial institutions so that we can continue to access financial resources, and we are doing this with our partner the IMF, and they understand us. There is a hope that better days will come,” Nyusi said.

“We are discussing programmes, of course. Every three months they visit us in Mozambique, we are in contact. There is quite encouraging progress on this.”

Asked about the impact of a ruling by the country’s Constitutional Court that declared a state-run firm’s 2013 Eurobond issue illegal, Nyusi said: “We are following very closely the implications of this decision. But we need to safeguard the sovereign interests of Mozambique and its people”.

Nyusi said in July after the ruling that Mozambique was committed to respecting international law on debt, a view he reiterated on Wednesday, saying this was key to remaining credible with investors.

He declined to say whether the ruling could affect the country’s ability to make repayments.

In June, Mozambique’s finance ministry said the country had reached a restructuring deal in principle with holders of its defaulted 2023 bond.

The IMF welcomed that agreement, but said the heavily indebted country needed a wider-ranging plan to ensure long-term debt sustainability.

Nyusi said talks with creditors were continuing.

“As for public debt, we have been discussing with the creditors to find ways to address this problem. Our aim is to strengthen confidence with our financial partners,” Nyusi said.

Reuters