The Italian Ambassador to Mozambique, Gianni Bardini, advises the country to avoid loans as much as possible and only try to access donations or concessionary credits, so as not to further aggravate the situation in which it finds itself, characterized by an unsustainable public debt.

According to data from the Ministry of Economy and Finance (MEF), Mozambique's public debt is around 70 % of Gross Domestic Product (GDP), and in the first quarter of this year it increased by 2.8% to 999 billion meticais.

Faced with this situation, the Italian diplomat suggests that Mozambique "should reduce its debt levels and seek external financing from concessionary funds or donations". "The debt is limiting the country's ability to find other sources of funding in the international financial markets because its level of external debt is unbearable," said Gianni Bardini, in an interview with AIM.

In the same publication, the Italian diplomat pointed out that 92% of the Mozambican state budget is spent on salaries and debt payments, both external and internal, leaving only 8% of the budget for investment spending, a factor that slows down the country's development at all levels.

"At the moment, international financing is not very available. To reduce debt, Mozambique must reduce its domestic spending. This is the only way to regain the trust of international partners, but it can't be solved overnight," he said.

However, the ambassador estimated that Mozambique will grow economically in the coming years, as a result of the revenues from the gas projects underway in the country, but drew attention to the problem of public debt, which is at high levels, in the order of 70% of GDP.

Regarding terrorism, he assures that the phenomenon that has plagued the northern province of Cabo Delgado since October 2017 does not put the operations of the Italian oil company ENI, which operates the Coral Sul FNLG project, at risk, but recognizes that the situation is worrying because there are other Italian projects stalled in the Rovuma gas industry due to insecurity.

The Coral Sul FLNG project, implemented by the concessionaires in Area 4 of the Rovuma basin, is off the terrorist trail because it is operated offshore, more than 50 kilometers from the coast.

"Safety for ENI is not a problem because ENI's project is offshore. The gas is being extracted and liquefied 60 kilometers from the coast via a floating platform. This platform is at a depth of 2000 meters, so ENI has never been impacted by the insurgency. The problem is with other Italian initiatives involved with TotalEnergies' Mozambique LNG project. At the moment these projects, such as Saipem, have stopped and we hope they will restart," said the Italian Ambassador to Mozambique.

(Photo DR)