adminPRETORIA. -Major foreign donors have suspended their contributions to Mozambique’s government budget in the wake of revelations that the previous government incurred massive debts without disclosing them. The International Monetary Fund had already announced that it won’t release any more funds to South Africa’s eastern neighbour from the agreed standby credit.
Revelations that the government of Armando Guebuza secretly took on more than $2 billion in debt are creating a deepening economic crisis in Mozambique.
Portugal’s President Marcelo Rebelo de Sousa, visiting Maputo, confirms the Group of 14 support donors have all suspended their contributions that make up 12 percent of the government budget.
Portugal holds the rotating chair of the G14 that’s shrunk from the 19 donor and lender nations.
Economic and Finance Minister Adriano Malian’s announced the first spending cuts. These include a hiring freeze and limits to government travel. He guarantees that health and education will not be sacrificed. – EWN
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