Mozambique thus saw S&P's analysis of domestic sovereign issues downgraded by one level, from B- to CCC+, but kept the rating for international issues unchanged, namely Eurobonds, on which there was no delay, and therefore remained at CCC+/C.

"In foreign currency issues, they've had some issues on a bilateral level, but they've continued to pay their commercial debt commitments in full and on time; we assess the capacity and willingness to pay commercial debt, but in the case of bilateral debt, even if they're late, that doesn't imply a change in the rating," explained the analyst.

When asked why the rating had been revised downwards, the analyst argued that the macroeconomic situation had changed since the last assessment.

"We still feel, even though it has been resolved, that there are issues about the payment system that could have been dealt with earlier," he argues, adding that there were other factors: "inflationary pressures increase costs in the system, in salaries and other lines of defense, the authorities are facing a budget squeeze that reduces the amount of money available for debt repayment, even in the domestic market."

Regarding the importance for the economy of the investments in the large natural gas projects in the north of the country, the analyst responsible at S&P assumes that they are fundamental for transforming the Mozambican economy, and therefore concludes that until the projects come into operation and the gas begins to be exported, the country's macroeconomic situation will not change substantially.

"From now on, until we see the big gas projects up and running, budgetary pressures will continue and this will affect the local currency's rating," he concluded. (rtp)