IMF says country admits over $1bn hidden debt

April 23, 2016 2:50 PM

An IMF source said the Mozambicans have given the IMF an "avalanche of documents" and admitted to having as much as $1.35 billion of undeclared sovereign borrowing.

The International Monetary Fund (IMF) logo is seen at the IMF headquarters building during the 2013 Spring Meeting of the International Monetary Fund and World Bank in Washington, April 18, 2013. REUTERS/Yuri Gripas

The International Monetary Fund said on Saturday that Mozambique has admitted to having over one billion dollars of undisclosed debt and the two sides were now evaluating the implications of this disclosure.

The IMF learned of the undisclosed borrowing last week but Mozambique's Finance Minister Adriano Meleiane initially dismissed the suggestion, speaking only of "some confusion".

Prime Minister Carlos Agostinho do Rosario then flew to the United States earlier this week to meet with IMF Managing Director Christine Lagarde and a finance ministry team worked with the IMF Mozambique staff to explain the borrowing.

"The authorities acknowledged that an amount in excess of $1 billion of external debt guaranteed by the government had not previously been disclosed to the Fund," IMF mission chief for Mozambique Michel Lazare said in a statement.

"The Fund and Mozambique will continue to work together constructively to evaluate the macroeconomic implications of this disclosure of information and identify steps to consolidate financial stability, debt sustainability and enhance governance,” the IMF's Lazare said.

Mozambican officials were not immediately available for comment.

The loans are in addition to an $850 million 'tuna bond' issued in 2013 and restructured last month because the southeast African nation was struggling to meet repayments.

The extra borrowing pushes Mozambique's foreign debt to $9.64 billion, according to the new tuna bond prospectus - a level now "very close to unsustainability," an IMF source told Reuters on Friday.